President Carter yesterday unveiled an $8.3 billion urban aid plan that he said commits the federal government "to the long-term goal of making America's cities more attractive places in which to work and to live."
The plan is designed primarily to help financially troubled central cities and second to promote rational growth and fiscal health in urban areas generally.
Carter called it a "tough, no-nonsense program based on efficiency, effectiveness and cooperation" with states and localities and the private sector.
Initial reaction tended to be cautious, with some groups praising Carter as the first president to come up with a comprehensive urban policy but criticizing him for what they said was inadequate funding.
Several key senators and representatives were out of town and unavailable for comment yesterday, but Kenneth A. MCLean, staff director of the Senate Banking Committee, said he was not sure the committee would have time this year to consider a key part of the Carter plan -- a national development bank to aid businesses willing to locate in depressed areas, both rural and urban.
Carter asked Congress to authorize $4.4 billion in new spending for several programs designed to create jobs and spur business development.
He also recommended $1.5 billion in tax credits for companies that hire long-term unemployed young people from 18 to 24 years old and $200 million in tax credits for firms that invest in depressed areas, either urban or rural.
Another $2.2 billion of the package would be in loan guarantees from the development bank in the next fiscal year. They would not require authorization of new spending.
Additional outlays in the 1979 fiscal year, which begins Oct. 1, would total $742 million but could change depending on how quickly localities take advantage of the programs offered.
For instance, Carter is seeking authority to spend $1 billion a year for the next three years to put 300,000 people, at least half of them referred by the government's comprehensive training program, to work on maintenance projects like the repair of streets and municipal buildings.
But the Office of Management and Budget estimates that only $100 million to $300 million would actually be spent in fiscal 1979 because of the time it takes to get the so-called "soft public works" projects started.
Carter's plan would add about $2.44 billion to the $60.6 billion deficit his 1979 budget projected in January.
Prospects for the plan are uncertain. Rep. Robert N. GIaimo (D-Conn.), chairman of the House Budget Committee, could not be reached for comment. He has predicted Congress will not approve much more than $2 billion in additional urban spending.
The development bank, which may be the most innovative element in the urban plan, faces trouble in the House, which is expected to consider it this year. Rep. Thomas L. AShley (D-Ohio), chairman of the Housing and Community Development Sub-committee of the House Banking Committee, has predicted it would not pass and is said to feel it is not needed. He was in Stockholm yesterday and could not be reached.
The bank would guarantee $11 billion worth of loans over a three-year period and would work with the Departments of Commerce and of Housing and Urban Development in recommending grants to businesses wanting to build plants in troubled areas. (For details see Page D-8.)
Carter finessed a turf fight between the departments for control of the bank by recommending that it be headed by a tripartite directorate of the HUD, COmmerce, and Treasury secretaries.
Under one of Carter's tax proposals, businesses would get a $2,000 tax credit for each out-of-work young person they hire in the first year of the program, and a $1,500 credit for each hired in the second year.
The other tax proposal would give a 15 percent credit to companies that build or expand in financially troubled areas. Carter has already proposed a 10 percent tax credit for businesses that build new structures or rehabilitate old ones. Those doing so in the depressed areas would get the extra 5 percent.
Carter also recommended continuing countercyclical federal aid, which is due to expire in October, but with a new design. He would halt such funds to states, which now get a third of the anti recession money, and give all of it -- $1 billion already sought in the 1979 budget -- to communities with jobless rates above the national average.
He asked for $200 million to give states incentives to provide hard-hit cities with extra funds or with greater taxing or annexation power.
He promised better coordination of federal programs through a new committee consisting of assistant secretaries of various agencies that deal with urban areas. The committee is expected to be headed by a White House staffer.
And he revealed that a large part of his program consists, not of new programs, but of more than 150 changes proposed in programs that already exist. Most can be made without legislation, he said. They stem from a year-long review of 38 programs in nine agencies that dispense about 80 percent of federal grants to cities. For instance, certain housing, sewer and highway programs are being redesigned to discourage sprawl and help cities grow.
Other initiatives in the urban plan include:
$400 million for job-training subsidies. in 50 or 60 communities, business councils consisting of labor and industry representatives would work with states and localities sponsoring local Comprehensive Employment and Training Act projects. The firms, using the subsidies, would hire about 100,000 "hard-core unemployed" people and train them on the job.
Increased procurement of goods and services from minority-owned businesses. The federal government's procurement from such firms would go from $1 billion to $2 billion or $3 billion in two years. Also, firms getting grants from any federal agency would be required to set goals and timetables for hiring minority workers.
$200 million in extra funding for local community development corporations like one in the Bedford-Stuyvesant section of New York City.
A proposal to lower air-quality standards and let communities that cut back air pollution by, say, closing down a trash-burning plant, use that reduction as an offset in order to attract a new industry that would add to pollution. Carter is also seeking $25 million to give planning grants to cities in polluted areas so they could help businesses find new ways to offset pollution.
Carter also called for extra money for inner cities. There would be $150 million extra for social services such as day care for children and meals-on-wheels for the elderly ($200 million is already proposed in the 1979 budget for such services). And there would be $50 million for health centers.
The plan seeks $150 million for parks, basketball courts, recreation halls and neighborhood swimming pools; $20 million for community cultural projects; $15 million to help cities that lack space for garbage dumps build plants to dispose of the waste, and $15 million for neighborhood self-help projects.
It requests an extra $150 million for low-interest, long-term loans to rehabilitate housing, and $200 million to help cities link up their subway lines with bus routes.
Carter also asked for $40 million for Action, the federal service agency, to give small grants to community groups for tree planting and fix-up campaigns and to set up an Urban Volunteer Corps that would work with local service groups on such projects.
The president proposed $10 million in addition to the $30 million he is already seeking for a community crime-fighting program sponsored by Action and the Law Enforcement Assistance Administration. The program would include services to watch houses when the occupants are away and to escort the elderly on shopping trips.
He also recommended $12.5 million for community development credit unions that would make loans to high-risk borrowers.
The U.S. COnference of Mayors said it was pleased that Carter has evolved an urban proposal, adding that "the exercise that the federal government has gone through in the past year is significant in itself, no matter what the result."
But it criticized his proposals to fund states and neighborhood projects directly "at what we perceive to be the expense of local governments."
It supported the countercyclical aid, development bank and "soft public works" proposals but said Carter had not given "enough attention to the critical national problems of unemployment, housing and transportation, which are concentrated in cities."
Jerry Wurf, president of the American Federation of State, County and Municipal Employes, said of the plan: "In philosophical terms, it's marvelous. But as an economic program, it's inadequate. Unfortunately, urban America is mainly in need of economic stimulation, not philosophy."
Vernon E. Jordan, president of the National Urban League, said, "Given the expectations raised by the year-long effort to come up with a national urea policy, the results are disheartening.
"The plan involves a welcome inase in assistance to distressed cities and constitutes a significant first step toward mobilizing national concern. But it falls far short of being the domestic urban Marshall Plan the nation needs." The Marshall Plan was America's post-World War II effort to help rebuild Europe.
Govs. William G. Milliken of Michigan and Michael S. Dukakis of Massachusetts, speaking for the National Governors Association, criticized the funding proposed for state incentives but added:
We are pleased that the president has recognized the crucial importance of a central state role in assisting our hard-pressed communities. The president's endorsement of our proposal for a true state-federal partnership represents a significant break with past federal policies."
State Sen. Douglas Bereuter of Nebraska, speaking for the National Conference of State Legislatures, also praised Carter's recognition of a state role in urban growth but said he did not include the states in his CETA and development bank proposals.