How The Biden Administration Put Race at the Center of Government Spending

(Anna Moneymaker/Getty Images)
January 8, 2024

The residents of Gillette, Wyoming, once enjoyed economic gains almost unheard of in rural communities thanks to a single commodity: coal.

The city’s deposits account for more than a third of the nation’s coal production, and a vast majority of Gillette residents work in coal-related industries. Income grew nearly 720 percent between 1970 and 2018. By comparison, Detroit’s metropolitan area saw its per capita personal income grow by roughly 150 percent over the same period.

But Gillette is no boomtown. With an average family income of just over $83,000, the local economy is fragile and almost entirely dependent on mining. As President Joe Biden and the Environmental Protection Agency push through regulations aimed at shuttering domestic coal production by 2035, Gillette has looked to the federal government for help.

Two of Biden’s landmark bills—the Inflation Reduction Act and Infrastructure Investment and Jobs Act, which together account for roughly $1.3 trillion in federal spending—were meant to, in the president’s words, "create new well-paying jobs" for workers who "helped build this country."

Former Gillette County commissioner Rusty Bell, who now works at a state agency dedicated to applying for federal grants, thought his city was a perfect match for one of the hundreds of federal grants up for grabs: more than $100 million to clean up and repurpose abandoned mines.

"These grants looked like they were written for our area," he told the Washington Free Beacon.

And yet, Gillette wasn’t chosen. "We weren’t even a finalist," Bell says.

He suspects it is in part because the town is more than 90 percent white, a factor that makes it hard to secure federal aid under a little-known federal initiative established in one of Biden’s first executive orders.

The program, Justice40, which the White House describes as a "whole of government effort," decreed that 40 percent of the beneficiaries of federal climate and environmental programs must come from "underserved communities."

The White House stops short of saying that those communities are defined by race, and that benefits like federal infrastructure grants are likely to be doled out on the basis of a community’s racial composition rather than a community’s needs.

But others are saying the quiet part out loud.

The same executive order that established the Justice40 initiative also created the White House Environmental Justice Advisory Council, which, according to the White House, provides "independent advice and recommendations on how to address current and historic environmental injustice."

Among the council’s tasks was providing recommendations to the White House about how to define a "disadvantaged community." In May 2021, it outlined 13 criteria. The first is that a "disadvantaged community" be "majority minority."  Another section of the document instructs agencies to "Be Actively Anti-Racist" and "reverse racial inequities."

The Biden administration is also leaning on a cottage industry of nonprofits that have sprung up to assist communities applying for grants. They explicitly define Justice40 in racial terms.

The Justice40 Accelerator, for example, hails Biden’s executive order as a way to remedy "centuries of structural racism." The group, which says it directed $8 million dollars in federal funding to applicants last year, says "Black, Indigenous, and/or People of Color" who serve "BIPOC-majority communities" should apply for grant assistance. And academics at the University of California, Los Angeles partnered with the George Soros-backed New Venture Fund in 2021 to create The Justice 40, which works to ensure "an accountability framework" for the Biden administration "centered on racial justice and equity guides."

The Inflation Reduction Act set aside $200 million for nonprofit groups to help provide "technical assistance" for the bill’s implementation. Only "community-based nonprofit organizations," similar to the Justice40 Accelerator, are eligible for that money.

Because federal climate programs now include everything from affordable housing to infrastructure projects, hundreds of billions of dollars are probably out of reach for communities like Gillette.

The result, according to Patrick McIlheran, policy director at the Wisconsin-based Badger Institute, is that bureaucrats responsible for doling out grants are no longer focused on "how to best spend this money."

"They’re injecting these unrelated ethnic and racial and justice criteria into all of this," McIlheran told the Free Beacon. "We should have a technocratic discussion as to where things such as bridges should best go, and instead, they’re doing something else."

Although relatively unknown, Justice40 could prove to be one of the largest transformations in federal spending since the 20th century.

According to Manhattan Institute senior fellow James Meigs, the executive order is part of an ideological movement that seeks to "fundamentally change our underlying political and economic systems" by requiring federal agencies to pursue policies focused on racial equity alongside infrastructure improvements, goals that are often in conflict.

Even early applications of Justice40 reveal how the program is changing the federal infrastructure grant process.

Now, only a two-square mile area of Neenah, Wisconsin, a manufacturing hub with an average family income of $77,229—where the bulk of the city’s small black population lives—is considered "disadvantaged," according to a White House screening tool, because it is situated within five kilometers of a certain type of factory.

An adjacent neighborhood that is also considered "low-income" is, under the White House’s criteria, less eligible for the money because it is not categorized by federal authorities as "disadvantaged."

Bureaucrats responsible for disbursing federal grants are already straining under Justice40’s mandates, according to a senior career civil servant who spoke with the Free Beacon.

At the Department of Transportation, political appointees, who get the final say on grant awards, are using Justice40 to reject qualified grant applications, according to sources who spoke with the Free Beacon.

"What’s happening is we’re going through all these grant applications, a lot of them are really good, and the senior political appointees are saying there aren’t enough disadvantaged communities," a senior DOT official, who spoke on the condition of anonymity, told the Free Beacon.

The official recalled one instance where Biden appointees clashed with career staff over a grant to build an electric vehicle charging station. The staffers wanted the money to go to an affluent Washington, D.C., suburb, whose residents would likely make use of the station, given Biden’s focus on ramping up electric vehicle usage. But political appointees pushed back, urging the staffers to consider awarding the grant to a town with more "disadvantaged communities," rates of EV use notwithstanding.

"A lot of career folks are like, ‘why the hell are we doing all these reviews if political appointees are just going to choose the ‘disadvantaged communities’?’" the staffer said. "We don’t understand how the agency is even going to get through an independent audit at this point."

Even grants to improve infrastructure used by the general population will have to meet Justice40’s community standards. The $40 billion Bridge Investment Program, for example, offers funding for towns and municipalities "to reduce the overall number of bridges in poor condition."

A year ago, the grant application form contained no reference to Justice40. Now, the application states in a footnote that the Department of Transportation "will apply the definition of ‘disadvantaged communities’" to Bridge Investment Program grants.

Those are the kind of federal standards Americans can expect under regulations like Justice40, Meigs says.

"There is no evidence and no research behind this environmental justice stuff. It’s just kind of crossing your fingers and hoping for the best."