In a rare sign of accommodation between the White House and Congress, President Clinton and House Speaker J. Dennis Hastert plan to meet in Chicago on Friday to announce a compromise plan for luring new investments to financially struggling regions.
The unexpected reconciliation comes amid signs that the administration and congressional leaders are making headway on broader budget issues, which have triggered sharp partisan sniping for weeks. Negotiators tonight resolved differences in the funding bill for foreign aid, one of several sticking points that have prevented completion of a federal budget plan for the fiscal year that began five weeks ago. [Details, Page A13.]
"The American people need to see even though we're having the battle over the budget, there's also things we can work together on," Hastert (R-Ill.) said in an interview today. "At least it's a softening of the partisanship people hear all the time."
Gene Sperling, Clinton's chief economic adviser, said Hastert's agreement to meet Friday "is a big deal for us. . . . I think the American people would like to know we're capable of putting our differences aside."
For months, Clinton and congressional Republicans have often talked of the same goal--using tax incentives and other means of attracting new businesses, jobs and training to hard-hit areas--but they disagreed on how to achieve it. Hastert and Clinton plan to appear late Friday in Chicago's Englewood neighborhood to announce an agreement on general strategies, borrowing from both the GOP and Democratic versions.
Clinton highlighted his proposal, called "New Markets," in a four-day, seven-stop tour in July. He launched a second New Markets tour today, in this city and Hartford, Conn., and was scheduled to wrap it up Friday with stops in Arkansas and Chicago.
The stop here was meant to link America's sports enthusiasm to the New Markets agenda. The owners of the New Jersey Nets basketball team are pumping millions of dollars into Newark's hard-pressed community, largely in the form of scholarships and youth league programs.
Clinton cited the work of team co-owners Ray Chambers and Lewis Katz as evidence "that a sports team can not only thrill people while the game is going on, but actually share the rewards of their popular support with the communities in which they live."
Back in Washington, Hastert agreed to work with Clinton in coming up with a compromise initiative to help struggling communities. Since Hastert became speaker in January, the two men have made little apparent effort to work together, and the Republican-controlled Congress has gone out of its way to work on the budget with little input from the administration.
Until yesterday's announcement of a Hastert-Clinton meeting in Chicago, Congress had also shown little sign of interest in Clinton's New Markets agenda.
Sperling said Clinton a few weeks ago sent Hastert "a personal, hand-delivered message" expressing interest in seeking a compromise on the New Markets legislation. On Oct. 19, when Hastert and other congressional leaders met in the White House on budget matters, the speaker pulled the president aside and said he was willing to negotiate.
Clinton's proposals vary from House plans in several respects, with Republicans emphasizing tax incentives and the administration focusing more on promoting lending from government agencies. The administration would provide a tax credit worth 25 percent for venture funds, corporations and community development banks that make investments and loans in low-income areas.
The GOP bill sponsored by Reps. J.C. Watts (R-Okla.), James M. Talent (R-Mo.) and Danny K. Davis (D-Ill.), by contrast, calls for eliminating capital gains taxes on proceeds from the sale of property or other assets in a designated "renewal community." It also would provide a tax credit of as much as 20 percent for renovating nonresidential buildings in renewal communities and a wage credit for companies hiring workers in the area.
Under the administration plan, the Small Business Administration would select 10 to 20 firms investing in low-income neighborhoods to receive matched government debt guarantees of as much as $10 million. The House bill would allow financial institutions to fulfill federal requirements under the Community Reinvestment Act by making investments or loans in renewal communities.
Clinton's initiative would create a new agency to issue equity investments for businesses locating in poor areas, provide $3 million to encourage large businesses to help small businesses in those neighborhoods, defer some small business loans from five to 10 years, make it easier for specialized small business investment companies to receive favorable tax treatment, and add $55 million to a program that gives awards to community development organizations.
The House plan does not have comparable provisions, but it would instead permit companies to expense costs they incurred in cleaning up polluted industrial sites in the renewal communities. It would also allow faith-based alcohol and drug treatment programs to compete for federal grants.
CAPTION: The president shakes hands at Malcolm X Shabazz High School in Newark. He praised professional sports teams for making contributions to urban areas.