By Robbi Jones and Eric Chatman
Forty-six million Americans live in poverty. From distressed inner-cities, to poor rural towns, millions of people live in areas with substandard housing, crumbling infrastructure and where economic opportunity is scarce. While these citizens are from different racial backgrounds, geographies, and political parties, they share a common experience and need for jobs and affordable housing.
Although we share a belief in economic opportunity and fairness, as the owner of an investment banking firm, and as a former quasi-state agency official, we sometimes disagree. However, we agree that more must be done to rebuild our most impoverished communities, especially African-American communities. While many problems cannot be cured by government, leaders can shift resources back to communities that truly need assistance, like Baltimore, Gary, Indiana, Youngstown, Ohio, Redding, California, and Albany, Georgia.
For example, homeownership rates, and the associated wealth building opportunities, in African American communities are well below rates in majority communities. In no state, metropolitan area, or county can a worker earning minimum wage afford to rent a two-bedroom apartment, according to a recent report. We need more innovative solutions to address these, and other, employment and infrastructure challenges.
For this reason, we commend the bi-partisan collaboration between Congressional Black Caucus Member, Representative William “Lacy” Clay, Jr. (D-Missouri), and conservative Republicans Representative Mike Kelly (R–Pennsylvania), and Representative Ted Budd (R-North Carolina), and their recently introduced legislation. The Generating American Income and Infrastructure Now (GAIIN) Act will fund needed infrastructure investments without new taxes. The Act requires the Department of Agriculture to sell distressed assets, with 50% of the proceeds going to infrastructure projects in poor communities and 50% going to reduce the national debt.
As currently written, the Act also includes protections for existing debtors and states that local residents are employed on these projects. The legislation will provide substantial resources to support affordable housing and other infrastructure needs, while creating jobs in chronically high unemployment areas. If successful, the pilot could expand to all federal agencies, representing more than $2 trillion in assets.
In 1986, President Reagan and the Democratic-controlled Congress faced a similar dilemma when they passed his historic tax overhaul. At that time, Congress turned to a bipartisan plan that required federal agencies to monetize their debt to reduce the federal deficit. The core model is viable today and provides an opportunity for all people to come together and deliver results for working class Americans, regardless of their political or racial backgrounds.
While there are philosophical differences regarding the size and scope of government, any proposal to build an economy that creates wealth and opportunity for all Americans must start with state-of-the-art infrastructure, including affordable housing, world-class airports, broadband, highways, and railways.
By creating housing, highways and byways near factories, farms and the inner cities, we can begin the process of ensuring that all Americans are given an opportunity to succeed.
Through the collaboration shown by Representatives Clay, Kelley, and Budd, as well as the tireless efforts by the firm, United by Interest, we now have another opportunity to put away our political differences for the forgotten men, women, and children who have been ignored for too long.
Robbi Jones is the founder and President of Kipling Jones & Co., an investment banking firm specializing in public finance. Eric Chatman is CFO of an affordable housing social enterprise collaborative and former senior official at the Iowa Finance and Connecticut Housing Finance Authorities. They are both graduates of the University of Chicago Booth School of Business.