Addressing the Racial Wealth Gap through the Federal Budget

Transcript

good afternoon everyone thank you for attending our webinar this afternoon my name is Ena Messi emo and I am program associate of Economic Security here at the center for Global policy Solutions our webinar today the economic imperative to address the racial wealth Gap through the federal budget will hopefully answer some of your questions and linging concerns regarding communities of color and the federal asset budget this webinar is one in the series of webinars hosted by the closing the racial wealth Gap initiative the initiative is a national collaboration between the center for Global policy Solutions in Washington DC and the Insight Center for Community Economic Development our goal is to build awareness and support for efforts to address the structural factors that contribute to the racial and ethnic wealth inequalities so why this webinar why does this webinar matter today well everyone who's been in this field knows that economic inequality is a growing problem in the United States President Obama recently spoke at the center of American progress discussing at length how critical it is to the American eony economy as well as the serious problem excuse me and how serious a problem this actually is we all know that economic inequality is holding back households from realizing their American dream and he made a call to action to address this problem while economic inequality hurts every everyone it especially hurts communities of color as communities of color face higher rates of unemployment debt low wages and are less likely to attend and complete College compared to their white counterparts one of the largest and most obvious forms of inequality between the two groups is in the area of wealth research from the urban Institute this year highlights that in 2010 white households has had six times the wealth compared to Black and Latino households to put that in perspective for every $6 that a white household had black and Latino households had just $1 in wealth in addition new research published by the National Institute of retirement security found that 62% of black households and 69% of Latino households have no assets in a retirement account compared to just 37 % of their white counterparts so why does this matter as we all know in a few short decades minority households will make up a majority of our nation's population and you have to ask yourself given the high levels of economic insecurity that these households face what will our 21st century Workforce look like what will become of our nation's racial and ethnic seniors when they have virtually no retirement savings given the national debate on the future of Social Security and cuts to Federal programs and pension benefits as we just learned today in fact from the House and Senate budget committees and their recent cuts to address the sequester across the board there needs to be a serious conversation by helping households of color who rely on Social Security and pensions at a higher rate than their white households ensuring that the economic mobility of these households is in place for the 21st century is critical for the US economy and while economic insecurity is created by policy it can also be corrected through policy it's important that policy makers and advocates in order to close the racial wealth Gap have a solid understanding what the racial wealth Gap actually is how we got here and current challenges facing communities of color so our agenda to today what is the racial wealth Gap what's it history how do we get here and what current challenges are facing communities of color in addition we'll give you a breakdown of the wealth building Federal asset budget and what can be done about it our discussion today will be done by today's speakers James Carr and Justin King Congressman Ellison could not participate due to a SK scheduling conflict he sent his regards our first Speaker who will go into the racial wealth Gap is James Carr senior fellow for the center of American progress and board member of Center for Global policy Solutions James Carr is a Housing Finance Banking and urban policy consultant who who also serves as the senior policy of with the opportunity agenda previously he served as Chief business officer for the national Community reinvestment Coalition where he managed minority and women-owned business centers that assisted their clients to access $1.8 billion in financing and three and $350 million in federal contracts during his tenure at the CBO Jim has published extensively and testified frequently before the United States Congress on issues related to the economy housing markets Financial system regulatory reform wealth and income inequality and economic mobility and he has also appeared on most of the nation's capable news networks including CNN CNBC Bloomberg Fox News and MSNBC and with that I'll turn over to you Jim all right thank you very much good afternoon everyone I'm honored to have been asked to share some thoughts with you today I'm going to talk for about 10 minutes on the um Foundation issue of the racial wealth Gap and then I'll conclude with some thoughts on how the federal government contributes to or uh can address this issue um and then there will be a further more detailed conversation on the asset budget when I'm finished um so let me just dive into the racial wealth Gap uh we know that not only is there a racial wealth Gap but that that Gap is growing and as was just mentioned um uh there was a study that just released yesterday I Believe by the National Institute on retirement security have found that blacks and Latinos benefit little from the tax breaks uh in the in the tax code uh aimed at retirement um outside of those benefits directly provided by employers because blacks and Latinos generally have so little dollars to actually contribute to things like Ira um also mentioned was a recent study by the urban Institute um again it's almost every other day or every other month we hear another study being released a a research previous to the urban Institute was done by the Pew Research Center that found that the racial wealth Gap had actually doubled as a result just of the Great Depression and so for the last 20 almost 30 years we had a racial wealth gap between blacks and whites of 10 to one and after the Great Recession it had jumped to 20 to one uh and a very uh similar dismal statistic for Latinos 18 to1 according to Pew the Great Recession uh resulted in an enormous Lo loss of wealth 2third the wealth of Latino households 54% of the wealth for Asian households and 53% for uh African-Americans but other research and it was either earlier this year or late last year Tom Shapiro um produced a study that I thought was particularly meaningful because he followed the same set of households over a 25-year period and his study showed know that from 1984 to 2009 the racial wealth Gap tripled from $85,000 in 1984 to 237,000 in 2009 what was really interesting about his study and particularly uh useful for per for purposes of understanding the racial wealth Gap is that he was able to identify individual drivers of the Gap and so five big ones uh were the years of home ownership which was interesting because it wasn't just home ownership it was also how many years and you found that because wies are able to access home ownership earlier uh in their younger years um their home ownership is different for that of blacks Latinos of course household income was important unemployment was also a uh a significant factor and what's interesting about that is that often when we think about the wealth Gap we don't think about unemployment but Unemployment uh causes African-Americans to have to draw down on savings so it is definitely a significant factor in explaining the wealth Gap a lack of uh access to college education and of course inheritance and then the final point which I thought was another really reving piece of his study was equal achievement such as income gains do not equal the same in terms of what an individual household is able to do with those gains in terms of Building Wealth and so he concluded that for every gain of uh $1 in wag whites were able to increase their wealth by a full $5 while blacks were able to increase their wealth by just 69 and one of the things that he pointed out in that study again really revealing is that not all jobs for example are created the same and so to the extent that blacks are actually occupying jobs that pay fewer uh benefits such as uh more lucrative Health Care uh maybe parking and or Transportation subsidies in the like those things really do so it's so we have to get Beyond just looking at the wage increases we have to look at the full panoply of things that go along with good a solid employment and he also pointed out because of higher debt a lower home appreciation and other factors more broad factors that even contributions in terms of inheritance are not the same so for $1 of inheritance for a white families their uh wealth grew by 90 cents but uh $1 of inheritance by black resulted in only a 20 C increase in wealth again I say that to sum up these studies and particularly Tom Shapiro's work what it really shows is that uh is that wealth is a result of many many factors and so focusing on only one or two of those factors is not sufficient in terms of fully addressing the wealth Gap and then a final study that I'll point out was I just find these studies to be some of them really intriguing found that uh that when um African-Americans file for bankruptcy um they are uh systematically in the most expensive and least successful bankruptcy procedure and so even after going to bankruptcy the ability to actually repair one's credit and get back on your feet um is different for blacks versus white having said that it should not be meant to suggest that there aren't interventions that could significantly help to close the a racial wealth Gap and it does not mean that everything has to be addressed all at once there are three items that tie directly back to the federal budget that I'd like to discuss just very briefly the first is home ownership currently the conventional Market is all but closed to people of color with loans to African-Americans and Latinos down by More than 70% since uh before the housing crisis and Home Ownership rates for both groups have summited and this home ownership loss is the largest source of the increase in the wealth Gap since the Great Recession an interesting thing related to the federal budget is that Fanny and Freddy are charging uh guarantee and other fees uh directly to pay to offset the cost of some federal spending so one of the most ironic is the extension of unemployment benefits the irony here is that African-Americans and Latinos are over represented in the rank of the long-term unemployed and so funding long-term unemployment disproportionately helps black and Latinos But the irony is that it comes at a cost by raising the co raising the fees to access conventional lending and so the housing market entities Fanny and Freddy should really be focused on the mortgage market and rebuilding the firsttime home ownership market and creating accessible loans for people of color as well as young people uh and other firsttime home buyers and not funding the federal budget the second is employment the US is suffering from a lack of aggregate demand as was the case during the Great Depression the federal government could and should stimulate economic uh an economic recovery uh due to the lack of consumer purchasing but the federal budget discussions as all of us are aware are focused almost exclusively on deficit reduction in fact the budget that was just agreed to increases spending only modestly to compensate for some across the board cuts that would have taken place without the agreement an interesting book Ira cat Nelson's brilliant 2006 book title when affirmative action was white highlights how affirmative action didn't really have its roots in the late 1960s with African-Americans as many uh like to think but rather it started back in the 1930s um he focuses on things like uh Social Security uh and the GI Bill both of those programs when they were launched specifically uh had Provisions that excluded the full participation of African-Americans and in fact some of the programs that were launched during the Great Depression to help white households actually included Provisions directly to harm uh communities of color take for example the homeowners loan corporation that was established during the Great Depression to help white families avoid unnecessary foreclosures that institution institutionalized redlining which ultimately was adopted in some form by every Federal housing agency and although it had been outlawed by the 1960s it continued in practice until the 1990s and was only replaced by what is now referred to often as green lining which was subprime Reckless fraudulent um unregulated mortgage lending President Obama has repeatedly called for the need to invest in the nation's infrastructure but today there's no meaningful discussion occurring on Capitol Hill regarding economic stimulus the final piece is retirement savings key changes to uh programs such as Social Security can and should be made that would increase benefits to populations that are more in need and decrease the financial burdens on workers with marginal incomes and few savings there are also a range of ways in which the tax code could be amended to make saving by lowincome households more of an opportunity and for that matter one of the big areas is the tax code as it relates to home ownership which does not offer credit but offers only deductions which are not accessible by lower wealth households which are disproportionately people of color African-Americans many Asian subgroups um Latinos Native Americans and Pacific Islanders let me conclude with a few thoughts on on uh issues that should be front and center on debates and conversations among Advocates and others who are promoting uh a more Equitable um economic society when discussing the budget one of the things that's important to point out is not just the historic role of the Federal Government in creating the racial wealth Gap by programs that help white while denying the same opportunities to people of color but it's also to recognize that right now the federal government has two sets of of of policy arms one of which is almost invisible to most conversations around the racial wealth Gap and that is we tend to focus on the federal budget which is the fiscal side of the house spending and taxes and that's important but we rarely focus on monetary policy but monetary policy is enormously important because the programs offered by the Federal Reserve offer extraordinary support stimulus and subsidies to the nation's largest financial institutions and help the large corporations and by extension their Executives and as a result Federal Reserve policies stimulate the racial wealth Gap a good example of that is to look and see how extraordinarily Stellar the stock market has been doing over the course of the last year with GDP bumping along at less than 2% but the stock market hitting new highs almost every other month that is not a result of the Invisible Hand of Adam Smith but it is a result of the very visible hand of federal erve policies such as 0% interest rates that encourage and in fact are in part uh designed to drive investment into the stock market that again bolsters those who are wealthy enough to own stock the reason this is important to mention is that when we are talking uh to uh policy makers about trying to bring fairness to Federal policies that affect the economy it's important to point out that there is this sort of lever that is often not focused on in fact University of California Professor Emanuel s estimates that in the first full year of recovery that was 2010 fully 93% of the entire national income gain went to the top 1% that 1% are not people of color and of course it drives a great uh disparity in wealth between the middle class and the super wealthy but it drives an even greater one between people of color and everyone else in fact the Federal Reserve has estimated that since the end of the Great Recession more than 90% of the amount of wealth that was lost during the Great Recession has been recovered but the Federal Reserve points out that has not been evenly evenly distributed they point out that the wealthy have fully recovered from the losses but that the middle of the uh typical household has recovered less than half of their wealth and of course African-Americans Latinos and other people of color who've lost wealth have done anywhere as near let me just close by saying that one of the final arguments that's important for us to keep in mind when we're talking about the racial wealth Gap and the budget and why we need to rep prioritize in a way that helps to close that Gap is that already today uh children under the age of one are majority of children in America uh under the age of one are now children of color and so as those children mature to be adults in America is a country whose adult working population are majority people of color issues relating to the racial wealth Gap will become less about social equity and more about America's International economic competitiveness and our nation's National Security we need to go strongly with those arguments about International competitiveness and National Security uh because those are real issues that America not only will face in the future but it's facing today and the budgets should reflect that as of this time thank you very much thank you Jim and uh just for our callers on the um listening on the computers uh any questions you may have feel free to submit them via chat and we'll answer them at the end of both our speakers presentation moving along uh let me introd is Justin King policy director of the asset building program at the new America Foundation uh his work at new America um aims to promote policies and ideas that significantly broaden access to economic resources through increased savings and asset ownership especially among lowincome families he leads the asset building program's efforts to communicate with policy makers and the public Justin spent over six years as a Legislative Assistant to former US senator James Jeffords independent from Vermont he worked extensively on both the Senate finance and health education labor and pensions committees and worked on legislation reauthorizing Tannis Head Start the elementary and secondary Education Act and the individuals with disabilities Education Act and with that I'll turn it over to Justin thank you enam uh let me begin just by thanking uh Center for Global policy Solutions and the Insight Center and the the closing closing the racial wealth Gap initiative uh for having me here today you know our work in the asset building program at at the new America Foundation is uh is dedicated uh very closely on on answering some of these questions about how we can uh better allow and encourage uh savings and wealth development for low and moderate income families and um you know the the good news out of the crisis of the past few years is that there is a much greater awareness um of how Stark uh the divides in wealth um are uh among uh among different different uh communities in in the United States and so uh this is really an integral part of our work there's a lot more focus on it now and having the opportunity to uh to to share a little bit of information with you on this webinar today is a is a great privilege um uh and and as as Jim and enim both I think highlighted you know it's not merely a desire for equality or a sense of fairness that guides this work it's an understanding that the ability to build wealth and to build assets is very clearly tied to economic Mobility to educational outcomes um and it's a critical part of the American dream and we've seen it uh slipping further and further away for several decades now um so as we go about our work of trying to design a policy solu Solutions uh that will address some of these problems and provide greater greater access to wealth building opportunities for communities of color and disadvantaged communities Across the Nation uh it's it's very important for us to to examine what the rules are that are in place uh and and and in particular where the government is spending money already um these are uh as Jim highlighted uh very discouraging times from a federal budgetary perspective there's uh no talk about uh new Investments which are badly needed um and uh one of the things that we can look towards with a little bit of hope uh is the thought that uh in the absence of new money perhaps we could uh reorganize the money that's already spent uh so that we get better results more bang for our buck um and so the federal budget is a critical critical piece to examine um and and we publish a report on the wealth building uh portions of the federal budget um our latest projection is from 2012 and that year we estimated that the federal government was set to spend 548 billion dollar promoting wealth development uh and that's more than half a trillion dollars each year uh it's truly an incredible sum of money and now you can look at this uh in different ways different analysts have studied this question and have come to marginally different conclusions the corporation for Enterprise development uh published an examination of the federal asset building budget in 2010 they called that report upside down uh and their conclusion was that the overall size of this uh this commitment was more than $400 billion a year uh gan sterley from the urban Institute uh calls his analysis in this area the mobility budget uh and and he pegs that current federal spending uh at almost $750 billion uh each year uh so while different analysts might look at this question uh and and make some different decisions about what belongs in in the bucket and what doesn't the bottom line is uh there's very broad agreement that there's an incredible amount of money expended on wealth development by the federal government each and every year uh and so how and where do we spend that money uh there there really we've identified four main areas where the government currently spends what we call Asset asset building funds uh Jim rightly uh uh talked about home ownership uh you know the federal government's commitment to to to promoting housing and Home Ownership uh just from a from a budgetary perspective each year is almost $200 billion um promoting retirement savings is $165 billion uh uh promoting savings and investment broadly is $15 billion a year um and then there are various mechanisms that the government uses to promote uh education uh we count some of these and not others uh for the grand total of about $67 billion each and every year and now what are specific examples of policies that drive those sort of astronomically large numbers you know the big one in the housing Arena of course is is the mortgage interest deduction um $100 billion a year $72 billion promoting 401ks uh 63 billion uh uh reducing the capital gains rate um and then and then smaller amounts of money on the education side $670 million on the American Opportunity tax credit the the consistent theme I I I wanted to point out to people in choosing these examples uh is that the big dollar figures here are really delivered uh through tax credits they're delivered through the tax code uh and this this pattern repeats itself over and over again through the wealth building budget federal spending geared towards supporting wealth development is delivered through the tax code and Via tax credits and this has a couple of big impacts uh first it it restricts access to these supports to those that file taxes uh and especially to those that itemize their deductions broadly speaking that means they're restricted to Upper income filers and this disproportionately excludes communities of color second the impact of the credits themselves is upside down the wealthy you the wealthier you are not only are you more likely to benefit but your benefit is bigger than a middle- income filer's benefit or or the or the benefit of a low-income Filer and so the sum impact of Mo of these policies is to work to make wealthy people wealthier uh and let me give some some specific examples of this this is a chart that uh we pulled together um in our in our budgetary analysis that looks at the impact of the mortgage interest interest deduction um it's a little a little fuzzy on the webinar here but but I think it comes through fairly well on the Le hand side you can see the number of tax returns that are filed uh in a given year uh that claim the mortgage interest deduction and as income goes up uh the likelihood that that your household claims the mortgage interest deduction goes up there are uh almost 19 million claims made uh on the mortgage interest deduction by families making more than $100,000 a year uh and there's about 7.5 million returns uh making the same claim uh among families that are around uh the median income which is around $50,000 a year uh and there are vastly more families that make $50,000 a year than there are families that make more than $100,000 a year uh but those families that make more money are more likely to claim and benefit from this from this credit so access is much more prevalent among wealthier people uh even though there are fewer of them they dominate in terms of who's using uh the mortgage interest deduction on the right hand side of the of the of the chart you'll see that the average value of the deduction uh as as income Rises uh the benefit grows as you climb the income ladder a median income family making around $50,000 a year can expect $700 to $1,200 in benefits each year uh a family making more than $200,000 a year can expect about five times the benefit uh communities color are much less likely to have access to the deduction and when they do benefit they're likely to be among those that receive a smaller benef benefit and so this pattern of inequal access and inequal benefits extends uh across the wealth building budget of the federal government Jim talked about retirement uh uh very very rightly so uh employee participation uh access to a retirement plan uh sponsored by your employer uh is heavily dependent on your income uh almost 70% of employees in the top 25% of the income distribution have a retirement plan and participate but only 28% of the bottom cortile have access to a plan and participate uh and and and uh as that as the often cited even though it's only two days old national in uh National Institute for retirement security uh report said yesterday uh workers of color in particular Latinos are significantly less likely than white workers to be covered by an employ sponsored retirement plan whether a 401k or a defined benefit pension only 54% of black and Asian employees and 38% of Latino employees uh in their Prime working years work for an employer that sponsors a retirement plan compared to 62% of white employees uh and so that that's the case for Access uh but we also subsidize uh the accumulation of retirement savings through the tax code we spend about $160 billion each year uh supporting retirement savings but 80% of those benefits go to the wealthiest 20% of income earners uh the bottom 60% of earners split just 8% of those benefits that's $130 billion that pads the retirement accounts of the wealthiest 20% of the country and the bottom 80% scrap over $30 billion so this pattern repeats itself over and over throughout the tax code uh and that's one of the reasons why when we look at the federal budget we really need to focus uh on our system of Taxation and tax credits actual programs that spend money supporting savings and wealth development for ordinary Americans are very rare and when they do exist uh they tend to be tiny um some of you on the call may be familiar with the individual development account program which is a very popular very well studied program in the uh in the asset building field uh and it's about 20 million uh dollars each year and it used to be 25 um so you know it's a it's a it's a a rounding error in comparison with these other expenditures um so consistently we see a pattern of of policies that support wealth building uh but they do that best for those that are already wealthy this worsens wealth inequality and the racial wealth Gap uh and and it and it really shouldn't be the focus of federal policy polish should policy should either take a hypocritic approach uh a first Do no harm uh approach uh or expressly provide greater opportunities to those who are striving to succeed I I look at these numbers and and I I um I often think of one of my favorite political cartoons this is uh Barry Deutsch uh from I think 2007 or or 2008 it's called a concise history of black white relations in the United States uh you know typically I prefer my cartoons to be funny but this one has always struck me as as very very poignant and when I look at patterns of federal spending uh uh in the budget and through the tax code uh we see that the way that this this cartoon is in accurate uh is that in reality the guy who's already made it to the top uh is continuing uh to pull away and is pulling up the ladder behind him uh as he goes um there are things that that we can do about this I I think Jim was absolutely right uh to talk about to focus on employment uh as I was designing my thought uh I I lined up with with Jim's other recommendations home ownership and retirement savings are the two big drivers of wealth um in ordinary American families in ordinary American families the truth of the matter is uh home ownership right now is really the only thing that matters uh so as we think about how to how to support wealth development in the future we need to think about supporting uh home ownership uh uh and we need to think about uh uh diversifying wealth for ordinary families um and we need to educate policy makers President Obama has given has shown a tremendous level of awareness of the impact of these problems um this is is a a long-term effort uh and we need to make sure that policy makers are aware that the status quo favors the wealthy uh with public dollars and that that's an unacceptable situation that needs to be remedied uh it is a long-term effort um the work is is happening now there's been a lot of discussion the last several years about tax reform uh everybody loves tax reform because it's an empty vessel uh uh that that uh they fill with their their biggest hopes and dreams um but I've become convinced that not in the near term not this year but over the course of the next several years we are going to see a major effort towards tax reform uh and the work uh for people who care about the racial wealth Gap uh I is going to be is going to be difficult but necessary uh because uh the folks that benefit from the status quo are heavily invested in maintaining the status quo and making changes uh to the distribution of resources through the federal tax code uh and through the budget is going to be uh a very difficult job uh but it is it is possible and and to do that we need to begin by educating policy makers about the reality of life on the ground for so many the possibilities offered uh through uh a more equal system uh of supporting uh wealth and asset development um and and I think that we have a hard road ahead uh but some exciting possibilities and and with that I will uh close up uh most of my report most of my webinar presentation here is U drawn from uh an infographic that we built uh it's available on the new America website and of course afterwards I'm happy to uh answer any questions that folks have have about uh how we arrived at these numbers and the methodology but uh I will turn it back over to enum great Justin thank you so much uh for those who are watching the webinar from their computers if you would like to now submit questions via chat please feel free to do so the first question I'm going to ask I'm going to give to Jim uh oftentimes Advocates run into the issue of finding ways to bring race into the conversation whether it's regarding Economic Security or education or microenterprise what have you and there's a number of factors as to why it's so difficult to discuss race one of them being that Americans truly believe the sort of narrative that if you work hard you will be rewarded for it regardless of the color your skin or your racial background but research shows that unfortunately this is just not the case for many Americans particularly communities of color uh so Jim given that this is such a sensitive subject for Americans how do you suggest that Advocates start talking about the raal wealth gaps without potentially alienating any audiences I think that's an excellent question and I think the answer lies in U motivation in other words I think that when a lot of people are pushing back and talking about individual responsibility um it really is a defensive uh uh response in other words individuals are saying to themselves even though they may not necessarily be explicitly stating why should you get something if I don't get something or why do you deserve something that I don't have and that gets into a me versus you as opposed to a conversation that gets into a we are all together the fact of the matter is that the US is you know we've been talking for decades now about the fact that the US econom that the US is quickly becoming a country that will have a uh the largest share of its population will be people of color I think if we focus on issues of national security and economic competitiveness and particularly that national security issue I think that that becomes sort of one of the the banners to get people to Rally around to understand that regardless of why there are these wealth gaps in other words we don't have to explain the wealth gaps we simply point out that we have the wealth gaps that we have these gaps in income that we have these uh gaps in in access to opportunity and that it's in the it's in the good of the country to uh to address I think that we need better research around these issues about you know that do sort of a projection fast forward another 40 years into the future what will the US economy look like if in fact the people who are are fast retiring non-h Hispanic whs are older but much better educated doctors lawyers accountants and others and they're being replaced with people who flip burgers at at a at a at a McDonald's those that kind of economy in the future will not pay for a lot of these defense contractors we're used to a lot of big contract uh defense contracts so I'm suggesting that we that we change the um we change the Paradigm that we reach out to non-traditional audiences to get support like the defense industry like big defense contractors to do research and studies on the viability of the US economy uh and what needs to happen in order to ensure that we have a rich robust strong um economic infrastructure and part of that will mean that we have to improve outcomes for people of color to me that's the way I would approach it in a sort of a National Security International competitiveness and not one that starts with did you know there's a racial wealth Gap and that and it's important to resolve that Gap by the following saying all right great thanks for that Jim uh one of the questions that came in was from forgive me if I mispronounce your name alvenia McQueen are there any studies available that you know of that addressed the wealth Gap from the standpoint of Health disparities that plague minorities particularly African-Americans and I'll give that to either of you um this is Justin you know there there is some some really interesting work that's been done uh in this area some out in California the American Psychological Association had a study uh earlier this year that came out that I thought was very impactful I you know I think when you hear President Obama talk about inequality um one of the things that he likes to talk about is the fact that uh the Affordable Care Act uh will have uh major positive impacts uh for communities of color uh and for for traditionally disadvantaged Americans uh by uh working uh to uh close some of the the health coverage gaps uh which should reduce medical bankruptcy and help build Financial Security in the long run so I think that that there is a a strong link there and I think that's one of the areas where we can say uh we're hopeful that we're seeing progress through the implementation of the Affordable Care Act um but I don't think that um uh without without sort of further dedicated attention uh we're going to see those disparities disappear um in the in the near future great thanks uh this question is from Tamara Parker how does lowincome tax credit how does the low-income tax credit or low-income tax credits compare with mortgage interest mortgage deduction credit and does US provide wealth to minorities I'll give that to both of you uh this is Justin again I I I assume that uh uh the Earned Income Tax Credit is uh is what we're uh talking about here and and there's no doubt the Earned Income Tax Credit is a is a tremendous uh anti-poverty tool it's it's one of our best um you know it it it it does not compare um in terms of size uh to the the enormity uh you know it's not half a trillion dollar each year um but it is a a very important tool for building Financial Security and one of the things we've focused on uh in our work in the asset building program is this the mechanics of the way the Earned Income Tax Credit are delivered um mind you uh you know the average Earned Income Tax Credit claim is about $1,500 so it's it's a meaningful sum of money but it's not an enormous sum of money um but but people uh plan their finances around the Earned Income Tax Credit arriving uh and filling holes that have developed over time so by the time that that um that check arrives uh it's already been spent by folks and by and large it's been spent on Necessities um or or reducing debt and one of the things we need to think about going forward with the Earned Income Tax Credit is how do we use uh the tax filing moment uh and the prospect of receiving a large check uh for a struggling family uh how do we turn that into a moment to consider saving for the long term I think there's a lot of work that we can do there to improve that the the Earned Income Tax Credit is incredibly important um but if you're weighing up the scales between uh eitc uh and and the vast majority of wealth building assistance that's out there uh that that tends towards upper income families um it's not a fair fight and I thought the question also asked about lwi income housing tax credit was that correct no the question uh specifically says how does just low-income tax credit compared to the mortgage deduction credit oh okay uh this is a comment from Dave Baldridge he encourages everyone to be as inclusive as possible in addressing racial income inequalities some American Indian communities experience support socioeconomic status in the nation yet their needs are seldom addressed in our n National dialogue uh I think this is an excellent comment uh American Indian communities do suffer uh in some places the poorest uh socioeconomic statuses in the nation um for a number of factors and yet they aren't addressed as uh often as they should be in a national conversation around income and wealth inequality uh I would say that uh there's a number of reasons for this one of which being that Advocates rely on the research that's out there to make their arguments and unfortunately just isn't enough data uh being there isn't enough research being done with uh around American Indian communities because the data set is rather small uh for many of these organizations doing this work uh James Justin if you have any comments around that around American Indian communities well I don't think there's any doubt that the comment is is absolutely right on and I think one of the things about the frame that Jim suggested earlier as as useful for people uh is is um that you know there's real value in grabbing on to Universal themes and I and I think is I think uh the thing I would really second is is a focus on opportunity and I would add Mobility um as uh really sort of universal themes that capture the imagination of a lot of Americans broadly speaking uh people want to see uh greater Financial Security they they're in support of government measures to help people uh build Financial Security uh and they are in favor of promoting opportunity and promoting mobility and and one of the things about those Universal themes is it allows you to uh to connect uh broadly to to all communities um and and there's no question that uh Native American communities have been left out too often and you're absolutely right about uh about data problems there but um uh but but there's more that can be done there's a lot uh a lot in the way of boosting opportunity um uh among all communities uh across the country and especially Native American communities and I think that I think that whole line of conversations is actually really good because it goes back to the first question which was how do we build the support to close the AAL wealth Gap uh and we don't have to focus on all of the strategies in terms of they will help people of color per se if we're using Universal strategies for example that bolster uh employment for moderate income workers we will have a disproportionate impact on people of color if we focus on things aimed at the um long-term unemployed or people who have dropped out of the labor market training programs they will disproportionately assist people of color so I think it's a very powerful point to remember that if we focus on sort of trying to motivate people to understand it's in the best interest of America uh heard long-term National Security and economic competitiveness to have programs that help create economic Mobility for everyone those programs uh their very design uh can be shaped to uh support and promote people of color without us having to uh focus on it and make it seem like Us Versus Them paradigm great thank you uh our last well my last question and this is for Justin and Jim uh it's actually quite timely that we have this webinar today given the release of the prop the two-year budget agreement from both the House and Senate budget committees which includes cuts to Social Security and federal pension benefits which commun of color rely on at higher rates for retirement security I just wanted to know for um from both of you what your thoughts were on this and how do you think it would play out going forward well when you say play outs going forward I'm I'm not sure the context I think that um all of these programs that are cutting back on benefits um are a detriment to trying to close the racial wealth Gap and in fact they will increase the racial wealth Gap and so you look at things like the dis proportionate share of people of color in government jobs the cutbacks on federal benefits are just a mirror image of the cutbacks on state local benefits which uh disproportionately um are helpful to the retirement of people of color so I think again as I said at the top of my um of my earlier comment the federal government in my view the budget is going in the absolute wrong direction because it's focused on deficit reduction and it's focusing on deficit reduction at a time when the economy really is struggling and if it weren't for a lot of the economic stimulus support by the Federal Reserve this economy would flatten out and for anyone who has any doubts about that just look to see what happened to the economy when the FED announced that they would just begin to taper on some of their economic stimulus programs back in April and the FED had to re uh reverse course in September because interest rates spiked GDP dropped uh new hirings fell and it was clear that the FED plays in a critical role in stimulating economy but again the tools available to the FED are not the tools that are flowing through to middle-income households and so we really need to find a way to get the fiscal side of the house to focus on the fact that that side of the house needs an economic stimulus as well and if we don't do it I just unfortunately foresee a really dismal in a continuing increase in both the wealth gap between the super wealthy and the rest and among people of color uh and non-hispanic whites yeah I I don't I don't have a lot to disagree with with Jim there I you know the if you want to say there's good news coming out of this um so you know specifically the the the the cuts to federal pension plans are are troubling uh you know this is one of the few stable pieces of the uh retirement structure that's left and we're making it less stable especially for communities of color uh that's not good news um you know the good news in the near term is that you know maybe we're um moving away from uh committing a series of of massive self-inflicted wounds in the economy um and maybe this is this is creating an opening for us to talk about um ISS Beyond deficit reduction um but you know it's it's hard to be enthusiastic about this deal um on on on any terms other than it provides a window for crisis avoidance uh you know the the the conventional wisdom has become that the right thing to do uh is to cut spending uh and Jim is absolutely right this is the wrong approach now it's been the wrong approach for several years uh and it has become The New Normal uh and so we are taking money out of the economy and taking money uh out of the hands of uh of families in need um uh at exactly the wrong time and we're going to pay the price for that uh for for many many years to come and uh it's it's it's hard to see um uh uh a bright and shiny path forward on a lot of this uh on a lot of a lot of the bigger issues we care about when the near-term picture uh is so very dark thanks Justin our final question comes from Pamela Larson um how can we continue to encourage more involvement by communities of color in these important policies that ensure all work and their families and either of you could answer so that that's a that's a challenging question and um I think probably you know we need better on the ground organizing and um one of the CH challenges I think is that we have when I say we I mean communities of color in whole I'm talking about Native Americans african- Americans asian-americans and others um we have a lot of organizations that represent our economic interest but we don't seem to really uh have you know sort of a um an advocacy see conversation between us that's really motivated and focused and National and still with local tentacles and I believe that organizing um at a local level and across these National organizations is really uh one of the key uh points of Salvation on public policy and I believe if we don't find a way to get into organizing better that I don't think that that we're going to see the Seas change because we've been through the worst recession since the Great depression and there is no change at all in the direction of federal policy whatsoever it's more muddle along and that muddling along is is further destroying the wealth and further fueling the racial wealth Gap one of the things I'm I'm constantly focused on uh is and particularly you know in a week during the the loss of Nelson Mandela is look back to the United States during the 1960s and we had so much um advocacy work we had so work in the streets we had so much local Grassroots work and that's what resulted in the sea change in laws from the Civil Rights Act the Voting Rights Act the fair housing act and other laws to try and create a more Equitable society and if you look around today they're just none of that and I believe that you know I don't have the secret sauce for how to get there but I know that we have to somehow get there if we help any hope of changing the direction of federal policy and the budget policy is the biggest forth of Economic Opportunity that we need to that we need to better stear great thank you I think that was a very uh strong and powerful close for our presentation today I would like to thank both of our speakers Jim Carr and Justin King for participating today and I like to thank all of our regist for signing up and joining in on this important conversation our presentation has been recorded and it will be available to all those who signed up uh later on this week and with that I like to say thank you and I hope you enjoy your afternoon