Clinton seeks initiative to boost urban, rural areas

NEW YORK -- President Clinton wants the government to offer financial incentives worth hundreds of millions of dollars to Wall Street firms and small businesses to resurrect the economies of underserved rural and urban areas from Appalachia to Harlem.

The president is to announce the proposals today at an economic conference organized by the Wall Street Project, an initiative of Jesse Jackson's Rainbow/PUSH Coalition. The project's mission is to expand business opportunities for minorities and women.

The proposals, which will be included in Clinton's budget plan, are the culmination of talks Clinton has had with Congress, federal agencies, community groups, finance experts and Jackson, who has been pushing for them. Jackson particularly wants to see agencies created that offer the same kinds of incentives the government now offers U.S. businesses going overseas. In an interview, he cited, among other agencies, the Overseas Private Investment Corp., an arm of the government that finances U.S. businesses overseas. The corporation offers loans and loan guarantees and secures private investment funds while insuring overseas investments against political risks. "We need a domestic version of these vehicles," Jackson said. "Whether it's the Ozarks, East L.A. or Harlem, there must be vehicles... to transport capital to people who need it." Jim Hill, state treasurer of Oregon and president of the National Association of State Treasurers, praised the concept Thursday at the conference. "It makes sense to me to use the same ideas to serve underserved people, he said. Margaret Cheap, president of South Shore Bank in Chicago, a leading investor in underserved neighborhoods, said the programs would work if the government creates sustainable institutions in communities as opposed to one-shot efforts. This is Jackson's second annual Wall Street conference, a two-day affair whose sponsors include a number of blue chip companies such as Citigroup, Coca-Cola, Ford and General Motors. At the first conference, the president said it was in the United States' interest to invest where the strong economy had not reached, bringing together "the gleaming office tower and the dark shadows." At the time he offered no plans, but this year he will get specific. "Some of it is taking from existing programs and... funding them better as well as trying to propose some new initiatives," said Gene Sperling, chairman of President Clinton's National Economic Council, who declined to be more specific. White House sources and others who spoke on the condition of anonymity said the initiatives would be worth hundreds of millions of dollars. The initiatives seek investment bankers to place capital, with guarantees, in the nation's underserved areas. Studies have shown that inner city dwellers both white and non-white have millions of dollars in disposable income but nowhere to spend them. Blacks, Latinos and Asians have an estimated $1 trillion in disposable income that could be tapped. "What the administration has come up with, and I've been working with them around the clock, is to use the tax codes to invest in these types of communities and to (have investors) receive tax credits for the amount of monies they invest," said U.S. Rep. Charles Rangel, D-N.Y. Jackson's Wall Street Project thus far achieved small, but measurable goals. For instance, he intervened in a discrimination dispute involving workers and Con Edison, the big New York City utility, convincing the workers to enter a mediation program. Con Ed also hired three minority firms to help manage its pension portfolio, an example that was followed Thursday by the telecommunications companies Bell Atlantic and GTE, which plan to do the same.

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