Politico 50: Sean Parker & Tim Scott
Tim Scott is used to making the best of bad situations. The product of poverty-stricken North Charleston, South Carolina, he excelled—on the football field, in business and in politics, becoming the first African-American to serve in both chambers of Congress. Scott is also the GOP’s de facto spokesman on race—no easy task in the Trump era. True to form, however, Scott turned a low point of Republican history into the crowning achievement of his own career. After he rebuked President Trump for equivocating in response to the white supremacist demonstration in Charlottesville, Virginia, last year, Scott found himself face-to-face with the president discussing race in America. Trump asked Scott, “What can I do to be helpful?” The senator replied: “You can support the Investing in Opportunity Act.”
Trump agreed, endorsing Scott’s legislation the next day and remaining loyal until it became law as part of the GOP’s tax-reform package. It was a little-noticed provision, never debated by lawmakers in either chamber, that now stands as a genuine example of policy entrepreneurship, and one that could have enormous implications.
The guidelines, still being fine-tuned by the Treasury Department, offer incentives for venture capitalists and entrepreneurs to invest in “opportunity zones”—blighted areas, determined by poverty level and median household income, that desperately need economic renewal. “You can now make a long-term investment in distressed communities where 50 million Americans live,” Scott says, noting that both urban and rural areas will benefit.
It was Sean Parker, the Napster co-founder and original Facebook president, who conceived of the idea for opportunity zones, after observing a pair of seemingly unrelated problems—a staggering amount of capital sitting on the sidelines of the economy, and an uneven recovery in which investments rarely found their way to needy communities. “U.S. investors currently hold a stockpile of over $6 trillion in unrealized capital gains,” Parker says. “If we could give investors a powerful enough reason to reinvest even a small portion of that in opportunity zones, we can create the most significant community investment effort in history.” Parker recruited backers on both sides of the aisle, led by Scott and Senator Cory Booker of New Jersey, who co-sponsored the Senate bill—and ultimately delivered one of the few significant bipartisan triumphs of the Trump era.