April 6, 2001

Breaking Rank With Latino Allies,
USHCC Endorses Bush Tax Plan

By James E. Garcia

WASHINGTON — In an era of sea changes for the Latino community, the U.S. Hispanic Chamber of Commerce is starting to make waves.

The organization recently announced - somewhat unexpectedly — that it would enthusiastically support President Bush's proposed $1.6 trillion tax cut.

Since making that announcement, George Herrera, president and CEO of the USHCC, has described the unanimous decision by his group's board of directors as bold and "non-traditional."

The move is considered brash and out of the ordinary because the USHCC's position is at direct political odds with virtually every major Latino advocacy group in the country.

Two of the nation's most influential Hispanic advocacy groups, the National Council of La Raza and the Mexican American Legal Defense and Educational Fund, for instance, strongly oppose the Bush tax plan. These groups say the president's plan provides no direct tax relief for more than 50 percent of Hispanic families nationwide. And they add that Bush's budget proposal does not provide enough money for federal programs that benefit low-income and working class Hispanics, including housing, health care and small business development.

Earlier this week at a legislative conference organized by the USHCC, Herrera and other chamber officials vigorously defended their stance on the Bush tax cut and admitted that it marks a clear political shift to the right, at least when compared to the organization's traditionally more moderate to liberal agenda. The organization, for instance, remains an adamant defender of affirmative action.

Herrera says the leadership of his organization buy Bush's argument that lowering income taxpayer rates across the board will stimulate the sluggish economy by encouraging consumer spending and business investment. Critics say that while all tax rates will be lowered, it is the nation's wealthiest Americans who stand to reap the greatest benefit.

USHCC Board Member J. R. Gonzalez, commenting on his group's stance, said, "Was it out of character? Yes. Was it a good decision? Yes. Is it good for business? Yes."

Gonzalez took part in a panel discussion at the USHCC's 11th Annual Legislative Forum on Tuesday. The panel was titled "Political Empowerment Equals Economic Empowerment."

He noted that the USHCC has "tended to ride the fence" when it came to government policy initiatives that appeared to favor Latino business interests over the overall interests of the Latino community. But in recent years the organization's leadership, said Gonzalez and other USHCC members, has come to regard that split allegiance as stifling, especially with regard to exercising its political influence.

Herrera said his group's stance on the Bush tax plan "shows (Latinos) are not a monolithic community." And, he added, "I think it's really about time."

NCLR Spokesperson Lisa Navarette agrees that the USHCC announcement is further proof that today's Latinos are not politically homogenous, and she predicts that this is not likely to be the last time the USHCC and NCLR will disagree on Republican.

"I think the chamber looked at this from the point of view of their constituency," said Navarette. "We did the same thing by looking at it from the point of view of the situation and how it affects the Latino community as a whole. The bigger issue for us is that we believe investments to shore up Medicare and Social Security, and making other investments in our community, is much more prudent than a large tax cut."

Former USHCC Chairman Ray Arvizu disagrees. Arvizu owns an advertising agency in Phoenix. He said the Arizona Hispanic Chamber of Commerce is expected to announce its support for the Bush tax plan this week because they believe that what's good for Hispanic business owners is good for the entire Hispanic community.

"Cutting the top tax rate from 39 percent to 33 percent," as Bush has proposed, "puts money in my pocket," Arvizu said. "I think the tax cut is good for all Hispanics. It doesn't matter if you're a Democrat or a Republican."

Arvizu, who is a Democrat, adds the USHCC needed to make it clear where it stands on the tax cut because "standing on the sidelines means we compromise our business."

As for concerns by groups like NCLR that most Latinos will not benefit from the Bush tax plan and many may even suffer under the president's budget proposals, Arvizu and other USHCC members say their group is moving in a "new direction." Meaning, they said, that its members interests come before the interests of other national Latino advocacy groups. To do otherwise, they said, will leave them politically weak and vulnerable.

Ruben Ramos, chairman of the Arizona Hispanic chamber, said the group's more conservative shift also reflects the growing economic clout of Latinos businesses nationwide. "We're now emerging and maturing from an organization of small businesses to larger and middle market companies," he said.

Still, some critics regard the USHCC stance on the tax cut as not just self-serving, but as downright selfish and ultimately harmful to the most Latinos, especially low-income Latinos.

"If you look at the budget proposal as a whole, it's going to affect many other issues that are important to Hispanics, not just business," said a Hispanic Congressional aide involved in promoting the Democrats more modest, tax cut proposal. The aide, who asked not to be identified, said, "By supporting the Bush tax cut (the USHCC) is just looking out for themselves" at the expense of Latinos living at the other end of the economic spectrum.

In a speech to USHCC members on Tuesday morning, the chairman of the Congressional Hispanic Caucus — whose 20 members are all Democrats — stopped short of directly criticizing the chamber's decision, though he spent most of speech condemning the Bush proposal.

Rep. Silvestre Reyes, D-Texas, said he strongly disagrees with the Bush plan, but he also thinks the USHCC has the right to serve the interests of its members.

"I'm not going to criticize what they did," said Reyes. "I think, fundamentally, they're responding to perhaps not all of the (pertinent) information."

Asked if he thought the USHCC has shifted to a more conservative stance, Reyes said, "As a DemocratÖI think it's important that we have Latinos in both parties. Because we're only going to be able to influence the policies that are so detrimental to Latino business, to Latino communities, to Latino issues from the inside."

Garcia is editor and publisher of PoliticoMagazine.com. E-mail Politico1@aol.com.

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