Joe Biden’s campaign announced a series of steps Tuesday designed to bridge racial economic gaps in the U.S. and promised he would work toward a more diverse Federal Reserve Board that would help minorities access funds and economic development.
Biden’s plan calls for an amendment to the Federal Reserve Act that would “require the Fed to regularly report on current data and trends in racial economic gaps — and what actions the Fed is taking through its monetary and regulatory policies to close these gaps.”
The Democratic presidential nominee also backs the Fed’s previously announced shift toward a real-time payment system, which would make it possible for low-income people to have instant access to the money they are owed.
A Biden aide said that diversity would be an important factor in all his administration’s personnel decisions, which would include nominating members of the Federal Reserve Board of Governors and, eventually, a board chair.
All of the current governors are White. There are currently two vacancies on the seven-member board. President Trump’s nominees to fill those positions have been awaiting confirmation in the Senate.
Biden will discuss his proposals, which make up the fourth and final part of an economic plan he has been rolling out over the month, at a speech later Tuesday.
“We need to make bold, practical investments to recover from the economic mess we’re in, and to rebuild for the economic future our country deserves,” Biden will say, according to excerpts of his prepared remarks released by his campaign.
The racial equity plank not only rounds out his economic plan, but serves to address voters’ attention on the economic gap between Black and white Americans that was heightened by the economic crash, the virus pandemic and the protests against police brutality.
Biden has overwhelming support from Black voters, but there are concerns about whether he inspires younger African-Americans enough to come out and vote for him over Trump.
In the past, Fed officials have focused on the impact of their monetary policy choices on the overall economy while paying less attention to the disparate impacts on minorities. Under Janet Yellen’s leadership, U.S. central bankers began highlighting such gaps at their regular policy meetings and including information on them in reports to Congress —a practice that has continued under the current Fed chair, Jerome Powell.
Powell has said, however, that the Fed’s policies “
The unemployment rate for Black and Latino adults has been persistently high, often twice the level of the overall U.S. rate.
Biden’s proposals are embedded in the $3.475 trillion in new spending he proposed to help the U.S. recover from the coronavirus crisis and resulting economic downturn. His campaign said new taxes, including a new real estate tax that he detailed last week, would pay for the proposals.
Biden’s plan includes $30 billion in federal investment in a Small Business Opportunity Fund, which could be used to leverage $5 of private sector investment for every $1 of federal spending, meaning that the fund would begin with $150 billion in funding. The money to seed the fund would come from the $300 billion support for innovation that Biden outlined in early July.
Biden would also take steps to promote diversity in leadership at the financial regulatory agencies and would create a new role within the White House Council of Economic Advisers to focus on racial equity, including income and wealth gaps. His administration would also work with Congress and the courts to create best-practices for ensuring diversity among interns, clerks and staffers.
Biden’s campaign did not say he supports reparations for Black Americans, as some have advocated, but did say he backs a longer term study on the issue, an official said.
