Much of the stimulus money will be distributed through state departments and funnel down to local or city governments, says be Board of Economists member Thomas Boston, who is also CEO of EuQuant, an Atlanta-based consulting firm, and a professor of economics at Georgia Tech. So, it will be up to individual municipalities to make sure that minority business owners get their fair share. Minority businesses need to act fast, he adds.
Some funding expires within 120 days so there may be a limited window of opportunity. For weekly updates on how minority suppliers are accessing the stimulus money, go to blackenterprise.com.
OBAMA’S ALPHABET SOUP
As part of his New Deal in the 1930s, FDR created a series of agencies to help move the country out of the Great Depression. Some of these regulatory bodies and programs such as the Federal Housing Administration (FHA), Securities and Exchange Commission (SEC), and Tennessee Valley Authority (TVA) have become long-standing institutions within the federal government. Collectively, pundits of the time called them the “alphabet agencies.” More than 65 years later, President Obama has created his own group of initiatives for today’s tough economic times. Here’s a glossary of some programs his administration has modified, enacted, or proposed thus far:
ARRA (American Recovery and Reinvestment Act of 2009), also referred to as the economic stimulus bill or package, is federal legislation that includes a mixed bag of tax cuts, benefits for the unemployed and disadvantaged families, and government spending on education, healthcare, infrastructure, science, and energy to push the nation toward recovery.
CBLI (Consumer and Business Lending Initiative) is a program designed by the U.S. Department of the Treasury and the Federal Reserve to provide an initial $200 billion in financing to private investors to help unfreeze credit markets and lower interest rates for students, small businesses, and consumers. The program is expected to have the potential to unlock $1 trillion of new lending.
EESA (Emergency Economic Stabilization Act of 2008) referred to as the financial bailout and spearheaded by the Bush administration, is a law authorizing the U.S. Treasury to spend $700 billion to purchase distressed assets, namely mortgaged-backed securities—bond collateralized by home loans—and to fund both domestic and foreign banks. The act established the TARP, Troubled Asset Relief Program which provided funds to weakened financial institutions and domestic automakers. The Obama administration gained oversight of the remaining $350 billion in funds when it came into power.
FSOB (Federal Stability Oversight Board) is a regulatory body comprised of the treasury secretary, chairman of the Board of Governors of the Federal Reserve System, Housing and Urban Development secretary, SEC chair, and Federal Housing Finance Agency director to oversee TARP policies and financial commitments and EESA’s broader goals and objectives.
MHA (Making Home Affordable) program is designed by the Obama administration to help 5 million “responsible” homeowners gain refinancing to keep their mortgages affordable as well as create a $75 billion loan modification program to enable up to 4 million families to avoid foreclosure.
PPIP (Public-Private Investment Program) was the apparatus created by the Treasury, FDIC, and the Fed to give government help to buy loans and “legacy securities”—mortgage- and asset-backed securities that were originally rated AAA—as part of an effort to repair the balance sheets of financial institutions and ensure credit is available to households and businesses.