In a continuing effort to woo Hispanic voters, President Reagan Saturday is expected to announce a package of federal assistance for communities along the economically depressed U.S.-Mexican border. The towns and cities have been devastated by devaluation of the peso.
The president is not expected to propose new programs that would add to the federal budget deficit. Instead he is likely to call for the acceleration of scheduled public works projects and ask a number of federal agencies to direct more aid toward the hard-hit communities along the border, where unemployment is close to 30 percent in some places.
Reagan met with the Cabinet on Tuesday to discuss the recommendations of a federal task force that he established last May to study the border economy. Since then White House advisers have been going over final recommendations, which are not expected to include details of the cost or the specific projects the administration has in mind.
White House spokesmen Larry Speakes told reporters aboard Air Force One en route to El Paso that Reagan will announce the formation of an "interagency action group" that will be assigned to implement the recommendations of the task force. Speakes did not say what the recommendations were.
The White House has been under pressure since last winter to take action to alleviate economic problems along the border, not only from Texas Gov. Mark White (D), but also from Sen. John G. Tower (R-Tex.). Tower is up for reelection in 1984, and has been concerned that the failure of the federal government to stimulate the border economy could cost him crucial Hispanic votes.
Reagan's advisers also are concerned that he demonstrate an interest in the problems of Hispanics for his anticipated reelection bid.
One administration official described the border aid package as "a triumph of electoral politics."
Reagan is expected to make the announcement Saturday in a speech to the American GI Forum, a group of Hispanic veterans holding its annual convention here.
In an unusual gesture, Reagan planned tonight to meet in his hotel suite here with the leaders of major Hispanic organizations. Hispanic leaders have been complaining about their lack of access to Reagan and other top officials in the White House.
Among those expected to attend the closed-door session are leaders of the American GI Forum, the League of United Latin American Citizens, the Mexican American Legal Defense and Educational Fund, the National Council of La Raza, the Hispanic Bishops of the U.S. Catholic Conference and the Southwest Voter Registration and Education Project. Raul Yzaguirre, president of the National Council of La Raza, said here today that the Hispanic leaders requested the meeting to detail their concerns about the Reagan administration's domestic policies in such areas as bilingual education, job training and housing, and to complain that the White House has been slipping "backward" in making Hispanic appointments to key posts.
To help stimulate the border economy, Reagan is expected to turn to such programs as the Commerce Department's economic development grants, the Housing and Urban Development Department's urban development action grants, Small Business Administration loans and possibly Farmers Home Administration loans.
Tower's office has been seeking expedited approval of foreign trade zones for Brownsville and several other communities, which are designed to improve the long-term economic climate on the border. That, too, could be included, according to aides to Tower.
The purpose of the package--in addition to demonstrating the administration's interest in the problem--would be to create jobs as quickly as possible along the border, while attempting to lay a foundation for a border economy less dependent on Mexico.
Economic conditions along the border have worsened since the Mexican government devalued the peso last year in response to its own deteriorating economy. The effect was to shut off the flow of customers who daily cross the border to shop in U.S. cities. Not only did this hurt business, it immediately increased unemployment.
Retail merchants have felt the most dramatic impact, watching thriving businesses decline and in some cases go bankrupt. Sales tax receipts are down 47 percent in Eagle Pass, Tex., 45 percent in Laredo and about 35 percent in both Brownsville and McAllen over the past 12 months.
The latest figures for El Paso paint a brighter picture, but only because its retail merchants were already in trouble, according to Texas officials. Merchants in the downtown section of the city who once catered to the walk-in trade from Mexico complain that they are now barely able to stay in business.
Thousands of businesses have closed, according to figures supplied by White's office. Between January, 1981, and May, 1983, 2,004 firms went out of business in the Brownsville area, 2,500 around McAllen and more than 1,000 in Laredo. Many failures were tied to the peso devaluation, though the problems of the national economy compounded the situation.
But retail merchants are not the only ones affected.
Everyone from bankers with loans in Mexico to doctors who rely on Mexican customers to private schools whose enrollments include Mexican children have felt the pains of the peso devaluation.
As a result, unemployment has risen sharply, even for a section of Texas that historically has been plagued by high jobless rates. In May, Laredo had the highest unemployment rate of any metropolitan area in the United States, with 27 percent of all workers idled. Other border communities now have unemployment rates of 16 to 18 percent.
The continuing nature of the problem is underscored by another statistic gathered by White's office: 1,800 people a month are exhausting their unemployment benefits in the Laredo area.
There are other problems along the border. The number of persons apprehended trying to enter the country illegally is up sharply, although that does not have a direct economic impact on the border cities because many of the undocumented workers are heading for cities farther north, where they think the economic picture is brighter.
In addition, the peso devaluation created a black market in currency trading that some border city officials have tried to stop, with little success.
The most recent statistics indicate that the recession in the border economy may have bottomed out, but there is little prospect for a rapid turnaround as long as Mexico's economy remains troubled.
"The trend looks up,but it's a very flat looking trend," said John Moore, a spokesman for the state comptroller's office.
Border officials have been seeking aid from the administration for months, and the White House responded earlier this year with a $200 million loan package guaranteed by the Small Business Administration. But only about 15 percent of the money was used, primarily because the merchants have so little business they cannot service the debt.
Shortly after taking office last January, Gov. White went to Washington to seek help for border communities, but the administration did not respond. Only when Tower, whose reelection prospects depend heavily on his ability to hold the share of the Hispanic vote he has received in the past, began to apply pressure did the White House begin to respond.
During a trip to Texas in May, Reagan announced the creation of a 15-member task force to study the problems and make recommendations within 45 days. The group, headed by Robert Dederick, under secretary of commerce for economic affairs, held a series of hearings along the border in June and sent its recommendations to the White House last month.
The problem presented the administration with a choice between politics and ideology. In the past it has recommended elimination of the types of economic development programs Reagan is now expected to use to help the border.