Commerce Secretary Philip M. Klutznick, reacting to proposals by black congressional leaders for emergency aid to minority business, said yesterday the current situation is not an emergency.
"What is needed is not necessarily an emergency plan," Klutznick told reporters following his luncheon address before a black business development group. But when an emergency situation arises, "We'll need emergency funds," he said.
One of the emergency proposals presented to Vice President Walter Mondale during a special meeting yesterday with Rep. Parren Mitchell (D-Md.), the Congressional Black Caucus and a group of minority business owners would provide a one-year interest and principal moratorium on all direct loans to minority business from the Small Business Administration and the Commerce Department's Economic Development Administration.
Lkutznick said he didn't know whether such a plan is "possible or necessary" but promised to examine it.
Klutznick said that the Commerce Department regularly reviews hardship cases of loan participants. "We do it all the time on a case-by-case basis," he said.
When asked what he considered an emergency situation, Klutznick said it is partly up to Congress to determine through the approval of emergency funds when such a situation exists.
Some of the other parts of the emergency plan proposed by the black leaders would:
Create a special $1 billion emergency loan fund within the MBDA at Commerce. Loans from the fund would be made at 2 percent interest over a maximum of 15 years.
Increase SBA loans to minority businesses by 30 percent.
Increase funding for minority business development under the SBA from $16 million to $100 million.
Defer payment of some tax withholdings for a year with no penalty or interest charges.
Establish an executive order requiring 40 percent of all defense procurement to be performed in labor surplus areas.
A spokesman for the group said that Mondale reacted "very faborably" toward the proposals and he plans to meet with the group again. One problem, however, is President Carter's call to balance the federal budget this year as a means of stemming inflation.
Klutznick said in his address before the Chicago Economic Development Corp. that "minority groups -- blacks in particular -- still bear a disproportionate share of the hardship that accompanies inflation and recession. The widening of the income gap between blacks and whites in recent years and the chronic high rate of black unemployment are but two measures that indicate the extent of the economic hardships confronted on a daily basis. Minority-owned businesses share in these hardships."
Klutznick said that the Carter administration has developed a strategy to help minority-owned businesses during the 1980s.