Dismantling The Dream

In July 2004, President George W. Bush spoke at a National Urban League Conference in Detroit where he discussed black America's place in the "ownership society" – a major theme of his 2004 re-election campaign.

There, before an audience of prominent black civil rights leaders, the president offered his take on black progress.

"Progress for African Americans and all Americans," he said "depends on more citizens living the dream of owning their own home."

"There's nothing better than somebody saying, welcome to my house; I'm putting out the welcome mat in my piece of property."

He's right. Like gainful employment, the ability to save for the future and access to affordable health care, child care and higher education, home ownership is not only a vital component of the American Dream – it's essential to the stability and growth of the middle class.

Unfortunately, proposals made last week by two Bush administration appointees in the Office of Thrift Supervision and the Federal Deposit Insurance Corporation (FDIC) threaten to make the "ownership society" a myth, rather than a reality, for working-class and middle-class families across the country.

The Community Reinvestment Act (CRA) requires banks with assets of more than $250 million to provide banking services, loans and investments to low- and middle-income residents in the communities in which they are situated. Congress enacted CRA in 1977 and it was strengthened during the Clinton administration.

Over the years, the CRA has been responsible for funneling more than $1.5 trillion into American neighborhoods for housing and commercial enterprises that are essential for building a strong local tax base. Industry giants J.P. Morgan Chase and Bank of America support the current requirements. Small bank owners, however, are insisting that the cost of compliance has made it impossible for them to compete with larger banks. As a result, the Bush administration has supported a proposal to raise the asset threshold of the CRA to $1 billion, up from $250 million, freeing more than 90 percent of the nation's banks from complying with parts of the law.

In cities like New York, where the CRA has been responsible for much of the recent redevelopment of Harlem, the proposed changes would reduce the number of banks required to comply from 81 to 20. In working-class cities like Detroit – which is more than 80 percent black and has fewer major local banks – the result could be far worse.

While 65 percent of all Detroit households consist of families with children, the homeownership rate is only 55 percent – a 10 percent difference. The housing vacancy rate is also 10 percent.

A major focus of the president's initiative to increase minority home ownership and close the ownership gap between blacks and whites has relied onextending tax credits to construction firms and contractors to encourage the building of more affordable housing for working-class and middle-class families in the inner city.

In Detroit, however, as with most of urban America, the problem is not simply a lack of housing for low and middle-income families – it's enabling people to buy those homes. Historically underserved communities rely on banking services, investments and loans to buy a home or start a small business – both of which are critical to black economic progress in urban America. The CRA has made this possible.

Black America – and all of America, for that matter – could benefit from some of the ideas expressed in the president's vision of an "ownership society." But how is that possible while the president is dismantling the very government programs designed to help families achieve the American Dream?

The CRA, like the minimum wage, overtime, Pell Grants, Social Security, Medicaid and Medicare, are examples of progressive legislation created by the government that have encouraged hard work and facilitated economic mobility into America's middle class.