"This is the right way to help our cities. It is not a handout. It will bring new credit, new jobs and new hope to the people," Clinton told U.S. mayors gathered at the White House in announcing his "community empowerment fund."
The White House said the $400 million could leverage an estimated $2 billion in private-sector loans and support an estimated 280,000 jobs when projects are completed.
Clinton said the proposed fund would give businesses an incentive to invest in places they have previously avoided. "It will provide capital for businesses who recognize the potential and the possibilities of the inner city," he said.
The fund would be run by the Department of Housing and Urban Development to help local governments attract more businesses and jobs to poor neighborhoods, Clinton said.
Clinton is scheduled next week to release his budget for fiscal 1999 which starts Oct. 1 and has said the budget would be balanced for the first time in three decades.
Republicans, however, have chastised Clinton for proposing a "laundry list" of new spending programs at a time when the budget deficit has almost disappeared.
The president's announcement on Friday again showed he was taking a business-as-usual approach despite the sex scandal surrounding him over allegations he had an affair with a former White House intern.
In his State of the Union speech on Tuesday, Clinton called for increasing the minimum wage, hiring 100,000 new public school teachers and passing tobacco legislation that would raise the price of cigarettes by $1.50 a pack over 10 years in hopes of discouraging teen-age smoking.
White House officials told Senate and House Democrats this week that all the president's proposals would be funded by some means and would not exceed spending limits set in last year's budget agreement for fiscal years 1998-2002.
Some Republicans are worried members of their own party may be inclined toward testing the spending limits with a push to increase highway funding, popular because it would touch virtually every congressional district in an election year.
"If you feel strongly about highways or the National Institutes of Health, or whatever it is, that's great, but just cut something else," House Budget Committee Chairman John Kasich of Ohio said this week.
Clinton's new budget will also include a program to hire as many as 1,000 new community prosecutors, $28 million to crack down on illegal gun traffickers and more than $17 billion to fund a national drug strategy, the White House said.
Republicans have estimated the price tag on Clinton's new spending programs outlined in the State of the Union would be anywhere from $40 billion to more than $100 billion.
"We cautioned the administration people about maintaining the (spending) caps and they're in full agreement on that," Sen. Frank Lautenberg of New Jersey, the senior Democrat on the Senate Budget Committee, said.
Franklin Raines, White House budget director, briefed Democratic members of the House and Senate budget committees on Thursday. "They (the White House) are not talking about cuts in any of the programs at this juncture," Lautenberg said afterward.
White House Office of Management and Budget (OMB) economic forecasts would be "pretty close" to those released by the Congressional Budget Office (CBO) earlier this month, Raines told Reuters.
CBO has projected economic growth of 2.7 percent in 1998, slowing to 2.0 percent in 1999 and 1.9 percent in 2000.
The administration echoed Federal Reserve Chairman Alan Greenspan's caution that the Asian financial crisis may slow the U.S. economy.
Asked whether OMB's upcoming economic forecasts took the Asian crisis into account, Raines said: "We think our forecast is still a good forecast, but most of it was put together before the Asian crisis manifested itself."
Source: Newswire
Friday January 30, 1998