Republican Sen. Ted Cruz criticized the Obama administration’s “regulation epidemic” for harming minorities in the U.S. through excessive costs and convoluted red tape.
“Overregulation harms everyone, but it especially harms those who don’t have the resources or the political connections to get a special exemption, to have a lobbyist, to get a favor from government—and far too often, those are minorities,” Cruz said Tuesday during a Senate Judiciary Oversight Subcommittee hearing.
The Texas senator said a noticeable gap still remains between revenues for minority-owned small businesses and revenues for non-minority-owned small businesses. Despite the former raking in lower profits, he continued, minority business owners are still required to pay between $7,000 and $10,000 per employee in regulatory costs.
“Regulatory costs have a more severe impact on the bottom line of minority businesses than other businesses, making it more difficult for minority businesses to grow and hire more employees,” Cruz said.
He blamed these costs for fueling increased poverty rates among African-Americans since President Barack Obama was elected, along with exacerbating an unemployment rate among the black community that is nearly double the rate for non-minorities—a trend that has remained stagnant for over 50 years.
Further, he noted that there are about 1 million fewer working-aged African-Americans and Hispanics employed today than when the president took office.
Michael Barrera, the national economic prosperity manager at The LIBRE Institute, said those in the Hispanic community he works with to navigate the regulatory system spend so much time attempting to work through federal law that it substantially detracts from the effort they could otherwise pour into running the business.
“It’s become so confusing nowadays that they don’t know which way to turn,” he said.
Democratic Sen. Chris Coons countered Cruz, arguing that federal regulations, like the Civil Rights Act of 1964, prevent discrimination in lending, housing, and education, offering greater economic opportunities for racial minorities.
“The case that regulations harms minorities turns a blind eye to the manifold ways in which regulations have been used to promote equality and justice,” he said.