WASHINGTON, D.C. — Three Democratic lawmakers are demanding urgent answers from Commerce Secretary Howard Lutnick after reports emerged that the Trump administration has effectively shuttered the Minority Business Development Agency (MBDA)—an agency with a decades-long mandate to empower minority entrepreneurs and strengthen economic opportunity across the country.
In a letter sent April 17, Senators Maria Cantwell (D-WA), Tammy Baldwin (D-WI), and Lisa Blunt Rochester (D-DE) called for transparency and a full accounting of a reported reduction-in-force (RIF) that eliminated nearly all of the MBDA’s staff, potentially in violation of federal law. The senators accuse Lutnick of contradicting his own sworn testimony and dismantling a congressionally authorized agency without legislative approval.
“If true, this action would not only prevent MBDA from successfully carrying out its congressionally mandated programs and duties; it would appear to contradict the testimony you provided during your confirmation hearing,” the lawmakers wrote.
The MBDA is the only federal agency exclusively focused on promoting the growth, competitiveness, and sustainability of minority-owned businesses—a sector that represents more than 12 million U.S. firms and generates over $1.8 trillion in annual economic output. Since its creation by President Richard Nixon in 1969, the agency has played a crucial role in addressing systemic barriers faced by entrepreneurs of color.
In Fiscal Year 2024, the MBDA helped businesses access $1.5 billion in capital, facilitated contracts, and supported the creation or retention of approximately 23,000 jobs, according to federal data. Its nationwide network of business centers provides tailored assistance, including help with securing capital, navigating federal contracts, and building strategic partnerships.
From Testimony to Turmoil
Secretary Lutnick, a former Wall Street executive, testified during his January 2025 confirmation hearing that he did not support dismantling the MBDA. His nomination moved forward, in part, on the basis of those assurances. Yet just weeks later, President Trump issued a sweeping executive order titled “Continuing the Reduction of the Federal Bureaucracy,” directing Cabinet agencies to streamline or eliminate programs.
That order required all federal departments to report back within seven days with compliance plans, including any agency components that could be eliminated. Lawmakers and external watchdogs now say the Commerce Department’s implementation of that order has gone far beyond what Congress intended—and may have violated federal statute.
“Alarmingly, information provided to our offices makes clear the RIF your Department initiated at the MBDA was even more sweeping than we had feared, leaving the agency with effectively no staff,” the senators wrote. “It is unclear to whom, if anyone, MBDA Business Centers are reporting or who is currently implementing MBDA’s congressionally mandated programs and duties.”
The senators are demanding that Secretary Lutnick respond to a series of questions and provide all documentation by May 1, including:
• The number of MBDA staff placed on administrative leave or issued RIF notices
• Copies of those notices
• Internal documents showing compliance with Trump’s March 14 order
• A legal explanation for how the actions align with the Minority Business Development Act of 2021, which codified the agency into law
• Clarification on how the actions square with Lutnick’s testimony
Dismantling by Executive Order
The March 14 executive order has become a flashpoint for Democrats and economic equity advocates who say it is being used to sidestep Congress and unilaterally dismantle programs that don’t align with the administration’s political priorities.
While President Trump has defended the move as a necessary measure to “reduce bureaucratic waste,” critics argue that the MBDA’s elimination is ideological—and deeply damaging.
“This is not bureaucracy; this is targeted harm to one of the few federal entities designed to serve communities of color in business,” said a former MBDA official, who asked to remain anonymous. “Congress spoke clearly in 2021 when it codified this agency. The administration is now acting in open defiance of that law.”
The Minority Business Development Act of 2021, part of the bipartisan Infrastructure Investment and Jobs Act (P.L. 117-58), was a landmark legislative achievement. It not only formally authorized the MBDA for the first time in its history, but expanded its mandate, increased funding, and established a Senate-confirmed director position to ensure long-term institutional stability.
Lawmakers argue that this congressional intent is now being flagrantly ignored.
Economic Stakes and National Backlash
The stakes of MBDA’s closure are significant. Minority-owned businesses have historically faced limited access to capital, credit, and procurement opportunities—a disparity that the MBDA was specifically designed to help remedy.
Without the MBDA’s support, thousands of entrepreneurs may lose access to federal contracting pipelines and technical assistance that are critical to survival and growth—particularly in rural, suburban, and urban communities still recovering from the pandemic and inflation-related economic pressure.
“This is the worst possible time to abandon minority entrepreneurs,” said Sen. Cantwell, Ranking Member of the Senate Committee on Commerce, Science, and Transportation. “These businesses are job creators. They are innovators. And Congress made it clear: we expect the MBDA to continue doing this vital work.”
What Happens Next
The senators’ oversight request sets the stage for a likely confrontation between the White House and Congress over agency authority and executive overreach. The Senate Commerce Committee may call hearings or move to introduce legislation preventing further reductions at MBDA or similar agencies.
Meanwhile, advocates say the broader concern is whether statutory protections can hold in an environment where the executive branch disregards the will of Congress.
“Simply put, such a move would reflect the exact type of ‘dismantling’ of the MBDA that you promised not to carry out,” the lawmakers concluded in their letter. “We urge you to stay true to your testimony.”
With less than two weeks until the May 1 deadline, attention now turns to whether Secretary Lutnick will comply—and what recourse lawmakers may take if he does not.
Source: Seattle Medium
