Killing the MBDA will weaken America

“We must also provide an expanded opportunity to participate in the free enterprise system at all levels--not only to share the economic benefits of the free enterprise system more broadly, but also to encourage pride, dignity, and a sense of independence. In order to do this, we need to remove commercial obstacles which have too often stood in the way of minority group members  – obstacles such as the unavailability of credit, insurance, and technical assistance. Involvement in business has always been a major route toward participation in the mainstream of American life. Our aim is to open that route to potentially successful persons who have not had access to it before.” ”

– President Richard M. Nixon

The Trump administration’s efforts to rewrite American history under the guise of fighting a mythical “anti-White” racism took a dangerous turn last week as the White House issued an executive order effectively gutting the Minority Business Development Agency (MBDA).

Since President Nixon established it more than 50 years ago, the MBDA has provided government financing and contracting opportunities that have fueled the growth of minority-owned businesses and strengthened our communities.

The National Urban League waged a decade-long fight to elevate the MBDA to a statutory agency because its role in driving economic equity and closing the racial wealth gap is irreplaceable. In fiscal year 2023 alone, the agency facilitated $1.2 billion in capital, secured $1.6 billion in contracts, and generated or saved more than 14,000 jobs.

Dismantling the MBDA is the latest example of right-wing extremists rolling back hard-won civil rights victories that have helped level the economic playing field. Under the pretense of race neutrality, they are actively working to erase policies that acknowledge and address systemic disparities.

In March 2024, a federal judge in Texas appointed by Donald Trump, ruled in favor of a lawsuit brought by White entrepreneurs, arguing that the MBDA’s mission of supporting minority business owners amounted to unconstitutional racial discrimination. While the judge acknowledged that racial minorities face greater challenges in accessing capital—including lower loan approval rates, smaller funding amounts, and higher interest rates—his astonishing ruling was that there was insufficient evidence that government policies contributed to these disparities.

This ruling, coupled with the administration’s actions, threatens to undo decades of economic progress. Eliminating race-conscious programs under the false premise of equality ignores the stark realities of systemic discrimination and denies communities of color access to resources essential for closing the racial wealth gap.

The administration’s decision is not just unlawful and unjust—it is an economic disaster in the making. Minority-owned businesses contribute trillions to the U.S. economy and employ millions of workers. Stripping them of vital federal support will stifle job creation, weaken local economies, and widen the wealth divide.

At a time when economic inequality remains one of the nation’s most pressing challenges, the federal government should be expanding opportunities for underserved businesses, not eliminating them. This is not just a policy fight—it is a battle for economic justice, and we cannot afford to lose.

Marc H. Morial is the president and Chief Executive Officer of the National Urban League, the nation’s largest civil rights organization.