Framers of the Carter administration's new urban policy are running into great skepticism about the proposed centerpiece of his program - a government-funded bank to spur center-city economic development projects.
Patricia Roberts Harris, the Secretary of Housing and Urban Development and head of the President's task force on urban policy, acknowledged in a New York speech on Friday that many people regard the so-called Urbank plan as "a slogan in search of a program."
Nonetheless, she said, such a "concept" is almost certain to be part of the program the administration sends Congress next year.
Confirming this judgement, other administration officials said that President Carter is under strong political pressure from his urban constituency to come up with what look like new approaches to big-city untax cut next year severly limit the employment and fiscal problems. But budget constraints and plans for a big new spending he can propose for public service employment and direct fiscal relief to the cities.
Urbank offers him one of hid few escape routes, and despite the doubts expressed in the administration and Congress about the usefulness of the project, it is likely to be a publicized part of the Carter package.
Interviews with administration officials working on the urban policy statement and comments at a New York meeting on the same subject, sponsored by the National Democratic Forum, cast a clear light on some of the dilemmas facing Carter in this area:
The task force is likely to recommend a further expansion of direct public-employment programs to chip away at the hard-core joblessness that reached up to 40 per cent among center-city minority youths. But those programs were increased markedly this past year and any further expansion would run up budget totals at a time when the administration wants to hold down spending and push through a major tax cut.
The measures for fiscal relief some mayors of hard-pressed cities most desire - such as a total federal takeover of the local share of welfare and Medicaid - have already been ruled out by Carter for next year.
Proposals for further federal sid to cities are complicated by the fact that such aid was increased sharply this past year by administration anti-recession measures. Many in the administration believe Carter will have his hands full just preventing a cut-back in the flow of funds to the cities, as Congress looks skeptically at renewing such measures as counter-cylical revenue-sharing.
Other strategies the urban policy task force will recommend - such as better targeting and coordination of federal programs to the neediest cities and stimulus of state and suburban efforts to help the cities - either face formidable political problems or are likely to be slow in demonstrating visible effects.
So the pressure is strong for something - like Urbank - which can be advertised as a Carter solution to the problem of the big cities.
Harris herself has been wrestling with the draft of the urban policy statement prepared by an interdepartmental committee. Serious discussions with the Office of Management and Budget on the program are expected to begin this week and a proposal is supposed to be ready for the President's consideration by Dec. 13.
However, major issues remain to be settled, even about the Urbank proposal. At the New York forum and in Washington interviews, Assistant Treasury Secretary Roger Altman said "Urbank is a misnomer." What is really under discussion, he said, is "a program of grants, loans and perhaps tax incentives" for the creation of private jobs in area of high unemployment.
The grants and loans would enable developers to assemble land and put up buildings that would add to the dwindling job supply in areas of high unemployment.
Altman outlined a Treasury version that would provide federal grants for 15 per cent, or the first $3 million of capital costs for such project, and low-interest loans for 75 per cent of the remainder - a package that would still require about 20 per cent private financing. Along with expanded "secondary market" financing and an increase in the limits on industrial bonds from $5 million to $20 million for such areas, the Treasury proposal is the most specific to surface publicly so far.
But Altman conceded that the possible role of tax incentives in the proposal was not been settled and he warned that Urbank would have "a relatively long lead-time" in terms of visible results.
Harris, in her comments, was much more guarded, saying that the Treasury plan was really only one of three alternatives under consideration, and that none of them was "the holy grail of urban finance." Harris even left open the possibility that no new lending institution would be created and that the loans and grants would be arranged cooperatively by HUD, the Commerce Department and the Small Business Administration.
In addition to the vagueness of the proposal, there is great skepticism even among urban specilists about it usefulness. Rep Henry S. Reuss (D-Wis.), chairman of the House Banking, Finance and Urban Committee, which would handle such legislation, gives it low priority. He told the New York forum he would favor an Urbank "only if it's sharply focused on areas of real need."
Frank Morris, president of the Federal Reserve Bank of Boston, told the same forum that "Urbank is not the answer" to the declining industrial and commercial base of the older Eastern cities.
Morris said industry and business are leaving those cities for new locations because "the costs of doing business in the city are too high."
He said he was referring both to economic costs of transportation, energy and labor and such non-economic factors as the fear of crime and the lack of amenities.
"We don't have alot of companies eager to invest in cities and just lacking the investment capital," Morris said. "The problem is the lack of incentive to invest in the cities."
Morris' views are shared by at least some of the White House staff members who will be shaping the final urban policy proposal. They agree with him, too, that a greater economic effect could be achieved by increasing the investment tax credit for businesses that locate in high-unemployment center-cities than could be achieved by an equivalent expenditure of federal funds in Urbank loans.
They are particularly dubious that business will rush to accept the Urbank loans if there are many social conditions tied to them - such as hiring their work-force from the hardcore unemployed.
"Most businessmen," said one presidential aide, "don't want to deal with a federal subsidy program which has a lot of social conditions attached."
Yet the betting at this point is that Carter is likely to make Urbank the centerpiece of his promised urban package, if only because he lacks any other innovative proposals.