President Clinton begins a four-day, six-state tour to some of the nation's most impoverished areas today, saying that the government and private sector should do more to bring the benefits of a booming economy to regions that continue to struggle.
The president--who regularly touts the economy's bright spots from Silicon Valley to Wall Street--will focus attention on places synonymous with persistent poverty and high unemployment: Appalachia, the Mississippi Delta, the Watts area in Los Angeles and an Indian reservation. With several corporate executives and members of Congress in tow, Clinton will promote new government incentives to lure investors and companies to such places. He says these "new markets" hold greater economic potential than many people realize.
Some of his proposals are expansions of familiar themes, such as tax credits and loan guarantees for investments in impoverished regions. Clinton hopes to trigger new enthusiasm for such programs by modeling his four-day mission after foreign trade trips, which are popular with many legislators and corporate executives.
"Our thought was, 'Why not do an economic mission to the United States?' " said Gene Sperling, director of the National Economic Council. "We're going to challenge corporate business America [and] community leaders to look in these places for new potential, for new profits, for new opportunity. . . . [We are] trying to encourage people to take a little more risk in some areas where we think there is potential to be developed."
Clinton's proposals, some of which would require congressional approval, would expand the Small Business Investment Companies program. His legislative package would allow up to $1.5 million in technical assistance--in addition to existing federal loan guarantees--for venture capitalists willing to invest in targeted regions. His "new markets tax credit" would allow a 25 percent tax credit for those who invest in community development banks or similar institutions designed to help firms get started or expand in low-employment communities.
Equally important, administration officials say, this week's mission will acquaint potential investors with community leaders and aspiring entrepreneurs in areas that could provide more employees and consumers than many people in corporate America realize.
"Often it's simply just a lack of relationships," Sperling said last week, alluding to low investment rates in struggling regions. "People simply do not have the relationships with the people in under-served communities that they may in other parts of the country and of the world."
Some skeptics question why Clinton has waited until the seventh year of his administration to place such an emphasis on impoverished regions.
Sen. Paul D. Wellstone (D-Minn.), who made his own tour of impoverished regions while decrying welfare cuts two years ago, said Clinton lacks the "bold agenda" needed to cut poverty significantly, especially among children. "We have to be careful that we're not doing symbolic politics or photo-op politics," he told reporters last week.
But Andrew M. Cuomo, secretary of the Department of Housing and Urban Development, said Clinton's first priority was to bolster the overall economy, and he is focusing on impoverished areas "because he can do it now." Some political advisers urged Clinton not to make the trip, Cuomo said yesterday, because poor people lack political power. "This is personally important to the president," he said.
Those traveling with Clinton include Cuomo and Jesse L. Jackson, an advocate of greater investments in poor neighborhoods. Scheduled stops and key topics are: Hazard, Ky., regarding investment incentives in a coal-mining region; Clarksdale, Miss., for a round-table talk on reviving commercial enterprises; East St. Louis, Ill., regarding investment incentives in an "empowerment zone;" the Pine Ridge Indian Reservation in South Dakota, regarding increased government aid for basic needs, such as housing and water and phone service; Phoenix, focusing on small business investments in a largely Hispanic neighborhood; and Los Angeles, targeting job training efforts.
The Census Bureau's recent annual report on poverty found that in 1997, the latest year for which statistics are available, the overall U.S. poverty rate fell from 13.7 percent to 13.3 percent. But that still left 35.6 million Americans in the "poor" category. The poverty rate for Indians living on reservations was 31 percent, for Hispanics 27.1 percent and for African Americans 26.5 percent--all more than twice that of non-Hispanic whites.
CAPTION: Geraldine Blue Bird with grandson at Pine Ridge (S.D.) Indian Reservation.