Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
55280013
label
New Democrats [2]
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
55280013
sourceUrl
contentType
document
title
New Democrats [2]
citationUrl
collections
Records of the Office of Policy Development (Clinton Administration)
Lisa Green's Files
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
55280013
levelOfDescription
fileUnit
otherTitles
42-t-26466288-20120043S-009-011-2017
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
ca053748a33c542f
ocrText
New Markets Initiative
White House National Economic Council
U.S. Small Business Administration
U.S. Department of Housing and Urban Development
U.S. Department of the Treasury
1999
Goals of the
New Markets Initiative:
Provide incentives to stimulate $15 billion
of new private capital investment in
targeted areas;
Build a network of private investment
institutions focused on economic
development in underserved areas; and
Provide the expertise to small businesses
and microenterprises that will allow them
to use new investment to grow.
Elements of the
New Markets Initiative
New Markets Tax Credit
America's Private Investment Companies
(APICs)
SBICs Targeted to New Markets (SBIC-LMI)
New Markets Venture Capital Firms (NMVCs)
Microenterprise Lending and Technical
Assistance
Continued Growth for CDFIs
BusinessLINC
New Markets Initiative
U.S. Small Business Administration
1999
What is an SBIC?
A Private Company
With Private Management
And Private Investors
Formed specifically to invest in small
businesses, generally where equity
participation is a significant component of
the financial return.
How SBICs Work
SMALL BUSINESS
Small
Guaranteed Debt
Business
(Leverage)
1953
Small
Investments
Business
SBA
Small
Investment
Business
Company
Investments
Private
Investors
Equity
Small
Business
Managers
What is an LMI (Low and Moderate
Income)-Focused SBIC?
A Regularly Licensed SBIC
$5 Million Minimum Capital
Up to 3:1 Debenture Leverage
Five Year Deferment of Interest
Formed to invest in LMI areas where 20% of
the population is below poverty level or
median income is less than 80%.
What Is the SBIC/LMI
Target Market?
Growth Small Businesses in Rural Areas,
Inner Cities, or
35% of Employees from LMI Areas
Investments from $150,000 to $1 Million
What is New Markets
Venture Capital (NMVC)?
A Community Based Venture Capital Fund
5 Year Deferment of Interest
Formed to Invest in Companies Requiring
both Equity and Technical Assistance in
LMI Areas
What Is the NMVC
Target Market?
Small Businesses in Rural Areas or Inner
Cities that Require both Equity and
Technical Assistance
Small Business Has Unique Market Niche
Moderate Growth Prospects
Investments from $50,000 to $300,000
New Markets Initiative
U.S. Department of Housing
and Urban Development
1999
Overview: Goals and Need
APIC Adapted from:
SBA's Small Business Investment Companies
APIC Created to:
Expand private investment in large-scale
businesses in LMIs.
Reach untapped markets in urban and rural areas.
Complement HUD's existing programs for large-
scale revitalization.
Enable a wide variety of project types, including
commercial real estate.
APIC: Long-term Capital
Targeted to Development Needs
Direct investments in active businesses
"Patient capital" -- long-term equity and
debt
Eligibility for New Markets Tax Credit
Scale
$36M in credit subsidy leverages $1 billion
in private loans and $500M in private
equity ($1.5 billion per year)
APIC will create large investment
companies (expected $75 - 450M) able to
fund large projects (expected $5 - 50M)
III. How the APICs Will Work
Private
HUD
Investors
w/SBA
Guaranteed Debt
Equity
(Leverage)
Private
Investment
Fund
Company
Manager
Management
(licensed)
Team
Project
Project
Project
Project
The Investors
Broad Array Eligible:
Corporations
Insurance Companies
Banks (eligible for CRA credit)
Pension Funds
"Social Investors"
Other Individual and Institutional Investors
Selecting Experienced
Fund Managers
Team Qualifications:
Proven track record in direct equity
investment and portfolio management
Demonstrated ability to raise capital
from private investors
Experience in community development
settings
APIC: Basic Numbers
Example
$50 Million
Private Equity
Equity
+
$150 Million
& Debt
into
and
$100 Million
Projects
Government
$ $ $
Guaranteed Debt
(Debentures)
Ensuring Financial Soundness
and Rewarding Performance
Financial Soundness Review
Performance Review
Local hiring, quality jobs, other community
benefits target by APICs themselves
High performers eligible for more
favorable financing
New Markets Initiative
U.S. Department of the Treasury
1999
New Markets Tax Credit
"I remember from my time on Wall Street that
there really had been no practical means, even
for professional investors, to invest in inner
cities even if they wished to do so. Hopefully
the creation of CDFI and other vehicles, and this
new tax credit, will interact to make investment
opportunity more readily available and to
provide incentive for such investment."
Robert E. Rubin, U.S. Treasury Secretary
New Markets Tax Credit
"Businesses must have equity capital before they
are considered viable candidates for debt
financing Continued efforts to develop the
markets for private equity investments will be
rewarded by an innovative and productive
business community. This is especially true in
lower income communities, where the weight of
expansive dept obligations on small firms can
severely impede growth prospects..."
Alan Greenspan, Federal Reserve Board Chairman
New Markets Tax Credit
Attract New Equity Capital to Businesses
located in Economically Distressed
Communities
Build the Capacity of Institutions with
Business Development Expertise and
Knowledge of their Local Community
Promote Partnerships between Skilled
Community Development Entities and
Mainstream Sources of Capital
What Community Development Entities
Can Use the New Markets Tax Credit?
A Flexible Approach
The Community Development Entity Must
meet a 3-Part Test:
Primary mission to serve or provide investment
capital for low and moderate-income communities
60% of gross assets invested in qualified investments
or residential property located in low-income
communities
Accountable to residents of low-income communities
Eligible Community
Development Entities
Community Development Financial
Institutions:
Banks, Thrifts, Credit Unions, Venture Funds,
Micro-Enterprises
Community Development Corporations
(for-profit subsidiaries of nonprofits)
Small Business Investment Companies
Primarily Serving Low and Moderate-Income
Communities
Eligible Community
Development Entities
New Market Venture Capital Firms
America's Private Investment Companies
Funds that Invest in Other Community
Development Entities
Funds that Purchase, Pool and Sell Loans
Made by Community Development Entities
Other Targeted Investment Funds
BusinessLINC: Learning, Information,
Networking and Collaboration
In 1998, Vice President Gore launched
Treasury/SBA's BusinessLINC.
It encourages large businesses to work with
small businesses to improve the
competitiveness of firms located in
economically distressed areas.
BusinessLINC: Learning, Information,
Networking and Collaboration
BusinessLINCs help smaller firms gain a
foothold while improving larger firms' bottom
line.
A BusinessLINC website will serve as a national
database to identify business linkages.
New private sector BusinessLINC coalition will
work with local communities to foster more
BusinessLINCs.
New Markets Initiative
White House National Economic Council
U.S. Small Business Administration
U.S. Department of Housing and Urban Development
U.S. Department of the Treasury
1999
[email protected]
07/27/99 11:21:11 AM
Record Type:
Record
To:
See the distribution list at the bottom of this message
CC:
See the distribution list at the bottom of this message
Subject: Finalizing APIC for hill - participating securities -Reply
Date: 07/27/1999 11:15 am (Tuesday)
From: Cliff Kellogg
To: DOM3.DOPO6(BARRM), ex.mail("[email protected]",
"[email protected]", "[email protected]",
"Michael.Barr", "[email protected]")
CC: ex.mail("[email protected]"," "Cliff.Kellogg",
"[email protected]", "[email protected]",
"[email protected]", "[email protected]"),
ex.mail"[email protected]")
Subject: Finalizing APIC for hill - participating securities -Reply
Xav -- I think you're firmly in the realm of legislative strategy, since the
real design work could be done in regs. For reasons of clarity and
legislative strategy, you may choose to omit the PS provisions. Based on
your descriptions of Hill reactions, I'd support your judgment to omit PS.
The fact that the debentures may be deferred interest probably clinches
the deal for me.
It seems that we may need to do what's feasible from a gov't point of
view, rather than optimal from an business point of view. The PS
structure is a better match of sources and uses of funds for the types of
deals APICs seeks to fund, viz., growth businesses and turnarounds.
Moreover, at a time when the credit markets are comparatively flush, an
APICs distinctive niche may well be its ability to do equity-like
participations rather than sub-debt. Deferred interest debentures relieve
some of the cash flow pressures on the APIC, but do not fully substitute
for a funding source that is truly a share-of-the-profits.
Cliff
Message Sent To:
[email protected]
[email protected]
Lisa Green/OPD/EOP
[email protected]
Sarah Rosen Wartell/OPD/EOP
[email protected]
Message Copied To:
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Xavier Briggs <[email protected]>
07/26/99 07:56:49 PM
Record Type:
Record
To:
Sarah Rosen Wartell/OPD/EOP, Lisa Green/OPD/EOP, [email protected],
[email protected]
CC:
See the distribution list at the bottom of this message
Subject: Finalizing APIC for hill - participating securities
like that nifty cathedral in barcelona, this bill may be beautiful but
never done
we have had, for some time, a "reserved," unspecified term--"participating
securities" (PS) in the APIC definition list, though we use the term
nowhere in the bill. we're thinking seriously of dropping it entirely cuz
it doesn't seem important enough or worth the hassle, but mindful of the
fact that that is more or less how IBM described the personal computer
years ago before apple came along, i'd like to hear any views on the matter
as soon as you have a moment. (below is saunder's.)
we think it odd to dangle the bill with an undefined term "reserved" but
never employed. and we meant to come back to this but never did. one reason
is that we ensured that debenture terms could be flexible (with deferred
interest or "zero coupon" features) to do most of what PS do.
another reason we punted earlier, if you recall, is that OMB did not score
APIC with PS in mind. thru this mechanism, HUD would assume greater risk. i
should add that it is my sense, based on 4-5 in-depth discussions of the
bill on the hill, that the simplicity of the debenture model, incl the
defensible low-risk position for govt (solidly behind the equity dollars of
investors), is a major selling point.
i would recommend dropping the term but being prepared to insert language
we like if this became a significant legislative issue this cycle. else
launching the program and letting it evolve a bit before a major,
complicating step--with associated scoring changes--is added.
finally, since we're doing nothing to the body of the bill, i assume that
this deletion would require no special clearance, but i look to the NEC on
that.
xav
[email protected] on 07/26/99 06:51:06 PM
To: Xavier Briggs/PDR/HHQ/HUD
CC: [email protected]
Subject: RE: APIC: credit subsidy, participating sec
Hi Xav -
Here's my personal opinion. I think you should leave PS out. The reason
is
that they will score terribly and be prohibited. Here's why I say this.
In
order for the PS securities model to work, you have to assume that the
players are hell bent for super high unadulterated IRRs.
In the final analysis, this won't be achieved by the majority. Our
model assumes a 20% failure rate, a 21% ROI by 25% of the population, and a
10% ROI by 50% of the population. This has a weighted ROI of 10.75%.
When these numbers were set, it was tough enough agreeing on
something, but at least we had the Venture Economics Benchmark Report of
the
results of the venture industry for 15 or so years. Here, you have nothing
to go by. What will an APIC even look like? Modeling will be very
difficult.
You see, with debentures, the profitability isn't the issue. It's
only a question of whether it is believed there will be defaults and what
the size will be. Of course, defaults also enter into the PS equation.
Finally, for PS to work, you need to assume a large number of SBICs
using it or your risk assumptions are going to have to compentsate for the
fewness of the numbers of players in the pool.
Hope this helps to clarify things.
Saunders
202.205.3646
Message Copied To:
"David S. Kass" <[email protected]>
"Susan M. Wachter" <[email protected]>
"Frederick J. Eggers" <[email protected]>
"Allen I. Polsby" <[email protected]>
[email protected]
[email protected]_At_Internet
[email protected]
Ann C. Hertelendy 07/26/99 05:26:53 PM
Record Type:
Record
To:
See the distribution list at the bottom of this message
CC:
Subject: Meeting on New Markets Legislation Event
Loretta will be holding a meeting tomorrow (Tuesday, July 27) at 1:00pm in her office to discuss the
upcoming New Markets Legislation Event. Please call/e-mail with questions. Thank you.
X62640
Message Sent To:
Thomas D. Janenda/WHO/EOP@EOP
Stephanie A. Cutter/WHO/EOP@EOP
Courtney M. Manning/WHO/EOP@EOP
Joshua S. Gottheimer/WHO/EOP@EOP
Dominique L. Cano/WHO/EOP@EOP
Carolyn T. Wu/WHO/EOP@EOP
Jennifer M. Palmieri/WHO/EOP@EOP
Stephanie S. Streett/WHO/EOP@EOP
Anne Whitworth/WHO/EOP@EOP
Sara M. Latham/WHO/EOP@EOP
Heather L. Davis/WHO/EOP@EOP
Michele Ballantyne/WHO/EOP@EOP
Timothy W. Emrich/WHO/EOP@EOP
Justin L. Coleman/WHO/EOP@EOP
Ruby Shamir/OPD/EOP@EOP
Patrick M. Dorton/OPD/EOP@EOP
Karin Kullman/OPD/EOP@EOP
Erica S. Lepping/WHO/EOP@EOP
Kris M Balderston/WHO/EOP@EOP
Janet Murguia/WHO/EOP@EOP
Mindy E. Myers/WHO/EOP@EOP
Mary E. Cahill/WHO/EOP@EOP
Joseph D. Ratner/WHO/EOP@EOP
Aprill N. Springfield/WHO/EOP@EOP
Rachel A. Redington/WHO/EOP@EOP
Mckenzie K. Davis/WHO/EOP@EOP
John Svare/WHO/EOP@EOP
Nicole R. Rabner/WHO/EOP@EOP
Ruby Shamir/OPD/EOP@EOP
Mark D. Neschis/WHO/EOP@EOP
Lisa Green/OPD/EOP@EOP
Laura A. Graham/WHO/EOP@EOP
Jeffrey A. Shesol/WHO/EOP@EOP
DRAFT
SBA's New Markets Venture Capital Companies
Meeting the Needs of Small Businesses in the 21ˢᵗ Century
The American people are enjoying a time of economic prosperity unprecedented for most
of us. We've got the strongest economy in at least a generation, a record number of new
business starts, the lowest unemployment rate in 29 years, the lowest core inflation rate in
more than 30 years, and the highest homeownership rate in history.
But there remain many untapped, under-invested communities. The New Markets
Venture Capital Companies (NMVCs) will address the unique capital needs of smaller
businesses located in geographical areas that historically have not attracted much private
equity investing. NMVCs will provide a combination of equity venture capital financing
and technical assistance to smaller businesses in these Low and Moderate Income (LMI)
areas. The President's FY 2000 budget seeks to support this important initiative.
NMVCs, with their focus on equity investments for smaller
businesses, coupled with technical assistance, will respond to
the needs of small businesses now and into the 21st century.
" [W]e have an obligation to give every American who is willing to
work for it a chance to walk across the bridge into the 21st century
with us, so we can go forward together, leaving no one behind."
Remarks by President Bill Clinton
on the New Markets Initiative
July 8, 1999
"Continued efforts to develop the markets for private equity
investments will be rewarded by an innovative and productive
business community. This is especially true in lower-income
communities where the weight of expansive debt obligations on
small firms can severely impede growth prospects
Remarks by Chairman Alan Greenspan
Federal Reserve System Research Conference
On Business Access to Capital and Credit
March 9, 1999
SBA's NMVCs will:
Fill equity financing needs not currently being met through existing
public or private financing programs in rural and urban LMI areas.
Open new doors for community development and economic
revitalization.
Features of NMVCs
Investments in smaller businesses located in LMI areas -
focusing on investments ranging between $50,000 and
$300,000 (compared to a typical Small Business Investment
Company (SBIC) investment of $300,000 to $5 million).
Community-based - structured to specifically meet the needs
of the area in which the NMVC invests.
Equity Investments -- An equity investment is an infusion of
capital that can be more patient in terms of repayment than
debt financing.
Matching funds - NMVCs will be privately managed and
funded, with SBA providing matching funds to supplement
the NMVCs' own capital.
Specialized Technical Assistance:
Technical assistance at the investor level - As investors,
NMVCs are committed to the companies in which they
invest. Their objective is to build the businesses. It makes
sense for NMVCs to provide the technical assistance these
companies need to succeed and grow.
Specialized, long-term, hands-on technical assistance - As
investors, NMVCs will have the incentive to devote
specialized staff to provide marketing, sales, accounting,
and management assistance.
SBA will provide matching technical assistance grant
funds to supplement the NMVCs' own technical resources.
NDN: The New Democrat Coalition
http://www.newdem.org/ndc/membership.html
would be united to
New Democrat
Coalition
Membership List
Cal Dooley (20th District, CA)
Jim Moran (8th District, VA)
Tim Roemer (3rd District, IN)
Co-Chair
Co-Chair
Co-Chair
*Jay Inslee (1st District, WA)
*Tom Allen (1st District, ME)
*Darlene Hooley (5th District, OR)
*Silvestre Reyes (16th District, TX)
*Brian Baird (3rd District, WA)
Chris John (7th District, LA)
Steve Rothman (9th District, NJ)
James Barcia (5th District, MI)
*Ron Kind (3rd District, WI)
*Loretta Sanchez (46th District, CA)
Ken Bentsen (25th District, TX)
John LaFalce (29th District, NY)
Max Sandlin (1st District, TX)
*Shelley Berkley (1st District, NV)
Nick Lampson (9th District, TX)
Brad Sherman (24th District, CA)
Marion Berry (1st District, AR)
*John Larson (1st District, CT)
*Ronnie Shows (4th District, MS)
Earl Blumenauer (3rd District, OR)
*Ken Lucas (4th District, KY)
*Adam Smith (9th District, WA)
*Lois Capps (22nd District, CA)
Bill Luther (6th District, MN)
*Vic Snyder (2nd District, AR)
Bob Clement (5th District, TN)
Carolyn Maloney (14th District, NY)
John Spratt (5th District, SC)
Bud Cramer (5th District, AL)
*Jim Maloney (5th District, CT)
*Debbie Stabenow (8th District, MI)
*Jim Davis (11th District, FL)
Bob Matsui (5th District, CA)
*Charles Stenholm (17th District, TX)
Peter Deutsch (20th District, FL)
Karen McCarthy (5th District, MO)
Bart Stupak (1st District, MI)
Anna Eshoo (14th District, CA)
Carolyn McCarthy (4th District, NY)
John Tanner (8th District, TN)
*Bob Etheridge (2nd District, NC)
*Mike McIntyre (7th District, NC)
*Ellen Tauscher (10th District, CA)
Harold Ford, Jr. (9th District, TN)
David Minge (2nd District, MN)
*Mike Thompson (1st District, CA)
Charles Gonzalez (20th District, TX)
*Dennis Moore (3rd District, KS)
*Jim Turner (2nd District, TX)
*Baron Hill (9th District, IN)
*Grace Napolitano (34th District,
* Tom Udall (3rd District, NM)
Ruben Hinojosa (15th District, TX)
CA)
*Robert Wexler (19th District, FL)
*Joe Hoeffel (13th District, PA)
*David Phelps (19th District, IL)
Bob Weygand (2nd District, RI)
Rush Holt (12th District, NJ)
*David Price (4th District, NC)
* David Wu (1st District, OR)
* Supported by NDN in 1996 and/or 1998
Freshman Members in italics
Back to the NDC Page]
1 of 2
7/26/99 8:20 PM
http://thomas.loc.gov/egu-bin/query/D?e106:1:./temp/-c106FYKSVV
THIS SEARCH
THIS DOCUMENT
GO TO
Next Hit
Forward
New Bills Search
Prev Hit
Back
HomePage
Hit List
Best Sections
Help
Doc Contents
H.R.815
American Community Renewal Act of 1999 (Introduced in the House)
HR 815 IH
106th CONGRESS
1st Session
H. R. 815
To amend the Internal Revenue Code of 1986 to provide for the designation of renewal communities, to
provide tax incentives relating to such communities, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
February 24, 1999
Mr. WATTS of Oklahoma (for himself, Mr. DAVIS of Illinois, Mr. TALENT, Mr. CLYBURN, Mr.
ARMEY, Mr. FROST, Mrs. FOWLER, Mr. ENGLISH, Mr. FORD, Ms. PRYCE of Ohio, Mr. KING, Mr.
LIPINSKI, Mrs. BONO, Mr. KOLBE, Mr. DELAY, Mrs. CHRISTIAN-CHRISTENSEN, Mrs.
EMERSON, Mr. KNOLLENBERG, Mr. HAYWORTH, Mrs. CUBIN, Mr. HORN, Mr. HILL of Montana,
Mr. WELDON of Florida, Mr. TERRY, Mr. SOUDER, Mr. BALLENGER, Mr. CHABOT, Mr.
CHAMBLISS, Mr. WELLER, Mr. TANCREDO, Mr. SENSENBRENNER, Mr. NORWOOD, Mr.
METCALF, Mr. DICKEY, Mr. GILLMOR, Mr. GREEN of Wisconsin, Mr. HULSHOF, Mr. LARGENT,
Mr. SCARBOROUGH, Mr. PITTS, Mr. ROHRABACHER, Mr. BURR of North Carolina, Mr. EHLERS,
Mr. BUYER, Mr. LATHAM, Mr. SIMPSON, Mr. MCCOLLUM, Mr. LATOURETTE, Mr.
CUNNINGHAM, Mr. COOK, Mr. LEWIS of Kentucky, Mr. BLUNT, Mr. NEY, Mr. GARY MILLER of
California, Mr. PICKERING, Mr. NETHERCUTT, Mr. MCHUGH, Ms. GRANGER, Mr. FORBES, Mrs.
MYRICK, Mr. SHOWS, Mrs. KELLY, Mr. OWENS, Mr. THOMPSON of Mississippi, and Mr.
COBURN) introduced the following bill; which was referred to the Committee on Ways and Means, and
in addition to the Committees on Banking and Financial Services, Commerce, and the Budget, for a period
to be determined by the Speaker, in each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
A BILL
I of 3
5/5/99 2:33
http://thomas.loc.gov/cgr-bin/query/D?c106:1:./temp/-c106FYRSVNV
To amend the Internal Revenue Code of 1986 to provide for the designation of renewal communities, to
provide tax incentives relating to such communities, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in
Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) SHORT TITLE- This Act may be cited as the "American Community Renewal Act of 1999'.
(b) AMENDMENT OF 1986 CODE- Except as otherwise expressly provided, whenever in this Act
an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other
provision, the reference shall be considered to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) TABLE OF CONTENTS-
Sec. 1. Short title; etc.
TITLE I--DESIGNATION OF AND TAX INCENTIVES FOR RENEWAL
COMMUNITIES
Sec. 101. Designation of and tax incentives for renewal communities.
Sec. 102. Extension of expensing of environmental remediation costs to renewal communities.
Sec. 103. Extension of work opportunity tax credit for renewal communities.
Sec. 104. Conforming and clerical amendments.
Sec. 105. Evaluation and reporting requirements.
Sec. 106. Exclusion of effects of this Act from Paygo scorecard.
TITLE II--ADDITIONAL PROVISIONS
Sec. 201. Transfer of unoccupied and substandard HUD-held housing in renewal communities
to local governments.
Sec. 202. Prevention and treatment of substance abuse; services provided through religious
organizations.
Sec. 203. CRA credit for investments in community development organizations located in
renewal communities.
TITLE I--DESIGNATION OF AND TAX INCENTIVES FOR RENEWAL COMMUNITIES
SEC. 101. DESIGNATION OF AND TAX INCENTIVES FOR RENEWAL
5/5/99 2:33
3 of 3
http://thomas.loc.gov/cgi-bin/query/D?e106:I:./temp/-c106FYRSVM
COMMUNITIES.
(a) IN GENERAL- Chapter I is amended by adding at the end the following new subchapter:
'Subchapter X--Renewal Communities
'Part 1. Designation.
'Part II. Renewal community capital gain; renewal community business.
THIS SEARCH
THIS DOCUMENT
GO TO
Next Hit
Forward
New Bills Search
Prev Hit
Back
HomePage
Hit List
Best Sections
Help
Doc Contents
5/5/99 2:33
3 of 3
July 27, 1999
Bioz
MEMORANDUM FOR: LISA GREEN
FROM: ALEX VEYTSMAN
SUBJECT: NEW DEMOCRAT COALITION MEMBERS
Engital Bldg
WAYS and MEANS COMMITTEE: TAX CREDIT
dropped C steps
Robert T. Matsui (5th district, CA)
HC - 8
John S. Tanner (8th district, TN)
SMALL BUSINESS COMMITTEE: - NMVC Firms A 430
Carolyn McCarthy (4th district, NY; Ranking member on Subcommittee on Tax, Finance, and
Exports)
Ruben Hinojosa (15th district, TX)
Tom Udall (3rd district, NM)
Dennis Moore (3ʳᵈ district, KS)
Charles Gonzalez (20th district, TX)
David Phelps (19th district, IL)
Grace Napolitano (34th district, CA)
Brian Baird (3ʳᵈ district, WA)
Shelley Berkley (1ˢᵗ district, NV)
BANKING and FINANCE COMMITTEE: - APICS
John J. LaFalce (29th district, NY)
Carolyn B. Maloney (14th district, NY)
Ken Bontsen (25th district, TV)
James H. Maloney (5th district, CT)
Darlene Hooley (5th district, OR)
Robert A. Weygand (2ⁿᵈ district, RI)
Brad Sherman (24th district, CA)
Max Sandlin (1ˢᵗ district, TX)
Jay Inslee (1ˢᵗ district, WA)
Dennis Moore (3ʳᵈ district, KA)
Charlie Gonzalez (20th district, TX)
MT.
HT.
31.
ST.
AM
14
2.M
am
02/25/99 02 THU 01:51 01 51 FAX
MEIZANINE
NCIZANINE
SUBWAY TERMINAL
HOUSE
37.8
SENATE WING
HI. HT.
WING
HI.
Hf HI
Hf.
11.
17
ST.
11.
ro
14
HT.12
Hf-
16
20
?
Inc
HT
R
24
HI,
HT
HT. HI
Ht.
HI.
11.
ST
11.
AF.
11.
HI.
HI.
HT.
HI.
HT.
HI-
17
"
119
INT-
HI.
RJ.
11
13
IS
17
"
81.
07.
Bf.
P7-
14
as
40
30
34
18
If
10
20
10
34
36
39
"
HI.
MC
-
HC
SC-0A
as
H1.
MT
WA
HI.12
Mf.
H7-
32
HT.
30
If
"
31
19
11.22
ST.
IT.
"
"
25
19
M
17
"
11
to
HB
ST
U
MT.
MB.
35
10
11
38-
$4
27
29
14
14
x
sc.ro
RI.
MT. #7
HB
H&
Hf.
BO
1B-13
11.
30
13
HB-1
38331
ST.
10
14
HI.
19
NC-8
MC-8
is
73
HI.
He
HE
Ha
58
,
SF.
51
:
-25
20
21
13
17
11.49
"
HI 31
HB-20 20
HJ.
1
1T.
$7.
HI-
M
53
11
$
M.
HB
8
MI.
21
,
IT
51.
50
35
"
41
n
31-36
HI-
MJ
11.
17.
10
57
"
"
84
MB
ME-20
SB-10
HT-
H.
"
11-
ST.
60
19
57
66
X
HI
HI
1149)
ST.
42
$1
1
59
48
JHI
14.61
58-
⑉
61
37.
44
K.
PO
HB-10
H&
HB
a
N
IF
13.0
4
T.78
,
HL
18
18-
BOOK
CONVEYOR
TUNNEL
HD-IA
88-1A
SUB
W
BASEMENT
TOLMAB
4
LIZQA
BASEMENT, TERRACE, AND COURTYARD
Big steps
FLOOR PLAN
SCALL 0 14 " " M FILT
SUBWA
may not have and
TERMINA
TO
TO
AS OF JUNE, 1997 NORTH
assa
R.S.O.A.
a M.S.O.B.
is S
UNITED STATES CAPITOL
002
July 27, 1999
Bioz
MEMORANDUM FOR: LISA GREEN
FROM: ALEX VEYTSMAN
SUBJECT: NEW DEMOCRAT COALITION MEMBERS
Engible Blug
WAYS and MEANS COMMITTEE: TAX CREDIT
Engzed C Step's
Robert T. Matsui (5th district, CA)
COROR
HC 1 8
John S. Tanner (8th district, TN)
SMALL BUSINESS COMMITTEE: NMVC Firms X 430
Carolyn McCarthy (4th district, NY; Ranking member on Subcommittee on Tax, Finance, and
Exports)
Ruben Hinojosa (15th district, TX)
Tom Udall (3rd district, NM)
Dennis Moore (3rd district, KS)
Charles Gonzalez (20th district, TX)
David Phelps (19th district, IL)
Grace Napolitano (34th district, CA)
Brian Baird (3rd district, WA)
Shelley Berkley (1ˢᵗ district, NV)
BANKING and FINANCE COMMITTEE: - APICs
John J. LaFalce (29th district, NY)
Carolyn B. faloncy (14th district. NY)
Kend then 01ᵗʰ d'aut (T)
James H. Maloney (5th district, CT)
Darlene Hooley (5th district, OR)
Robert A. Weygand (2ⁿᵈ district, RI)
Brad Sherman (24th district, CA)
Max Sandlin (1ˢᵗ district, TX)
Jay Inslee (1ˢᵗ district, WA)
Dennis Moore (3rd district, KA)
Charlie Gonzalez (20th district, TX)
Possible Questins
In Small Busines Investment Company
may gel
Third
5 your vs. the year
tredity population us areas
LG Copy
Telfndy Cmth
w/ notes
STREET 1338
THE WHITE HOUSE
WASHINGTON
AMERICA'S NEW MARKETS:
UNTAPPED AREAS FOR
POTENTIAL INVESTMENT
Background on New Markets Initiative
Pages 1-2
Budget Impact of New Markets Initiative
Pages 3-5
Gerald Seib: The Wall Street Journal, July 7,
1999: "Clinton on Tour: Battling Poverty the
'Third Way"
Page 6
Charles Babington: The Washington Post.
July 9, 1999: "Clinton's 'Third Way' to
Beat Poverty"
Page 7
PRESIDENT CLINTON'S CHALLENGE TO THE PRIVATE SECTOR
TO INVEST IN AMERICA'S NEW MARKETS
Presentation to the New Democratic Coalition - August 1999
"I think it important to recognize that this is different, because we don't say the government can
solve all these problems, but we do say the government can no longer ignore them and, in fact,
we 've been working on them for six and a half years, ever since I took office. This is a classic example,
this approach to new markets, of the New Democratic or Third Way philosophy that I articulated
back in 1991 and 1992. That is, government's role is to create conditions for success, give people the
tools they need to succeed, and then, in effect, empower people to make the most of it.
"
-- President Clinton, MSNBC Interview, July 6, 1999
PROMOTING NEW EFFORTS AND AN INITIATIVE TO ATTRACT CAPITAL TO UNDERSERVED AREAS.
As part of a bipartisan focus on underserved urban and rural areas, President Clinton is seeking ways to
expand current community development and investment efforts. President Clinton's New Markets
Initiative will build upon these existing programs and help create the conditions for economically
successful investment in underserved inner city and rural areas. Included among the elements of the
plan are:
The New Markets Tax Credit. To help spur $6 billion in equity capital for investment in
America's new markets, President Clinton and Vice President Gore have proposed a tax credit
worth 25 percent for investments in a wide range of vehicles. Eligible investment companies
include community development banks, venture funds and corporations, and the new
investment company programs created by this initiative.
America's Private Investment Companies (APICs). Just as America's support for the
Overseas Private Investment Corporation helps promote growth in emerging markets abroad,
APIC will encourage private investment in this country's untapped markets. HUD and SBA
will guarantee loans up to $200 million, creating investment funds as large as $300 million to
invest in new development projects and larger businesses that are expanding or relocating in
inner city and rural areas. Under the financing structure, the private investors' funds are at risk
ahead of the government
New Markets Venture Capital (NMVC) Firms. NMVC firms will make both capital and
expert guidance available to small business entrepreneurs in inner-city and rural areas. Ten to
twenty NMVC firms are planned. SBA will match the equity and technical assistance of
private investors.
SBIC's Targeted to New Markets. For more than 40 years, SBA's Small Business
Investment Company (SBIC) program has provided roughly $20 billion in equity and debt
financing to more than 85,000 different companies, helping them to grow from small
businesses to household names, like AOL and Staples. However, too little of the capital
invested has benefited economically distressed communities. The New Markets Initiative
includes proposed regulatory changes, that will enable SBA to offer more flexibility and new
financing terms for Small Business Investment Companies (SBICs) that invest in underserved
areas.
PRESIDENT CLINTON'S TRIP TO NEW MARKETS AND MOBILIZATION OF THE PRIVATE SECTOR.
From July 5-8, President Clinton led a delegation on an unprecedented trip of untapped markets
throughout the nation, making stops in several impoverished communities including areas of
Appalachia, a native American reservation and the Mississippi Delta. The trip was modeled after the
type of trade missions that Cabinet Secretaries and CEOs often take overseas to identify markets,
which - through trade and commercial agreements - can help to create jobs and expand economic
development. As part of the trip, President Clinton mobilized a broad array of private-sector
investments and announced several hundred million dollars in new commitments and innovative
programs developed by companies, community leaders, non-profit organizations and investment firms
around the country.
A RECORD TO BUILD ON. President Clinton's effort expands on the innovative approach to
community empowerment that he and the Vice President have pioneered for nearly seven years.
Creating the CDFI Fund. In 1994, President Clinton proposed and signed into law the CDFI
Fund which, through grants, loans, and equity investments, is helping to create a network of
community development financial institutions in distressed areas across the United States.
Reforming CRA. In 1995, the Clinton Administration reformed the CRA regulations to
emphasize performance. The private sector has pledged more than $1 trillion going forward in
loans to distressed communities - and more than 95% of these financial commitments have
been made since 1992. (NCRC)
Creating the Empowerment Zones. President Clinton and Vice President Gore proposed and
signed Empowerment Zone legislation in 1993 establishing 105 EZs and ECs across the
country. The EZ/EC effort has generated billions of dollars in new private sector investment
in community development activities.
Brownfields and Second Round of EZs. The Administration's Brownfields action agenda
has marshaled funds to clean up and redevelop up to 5,000 properties, leveraging billions of
dollars in private investment and creating and supporting 196,000 jobs. The President has also
signed into law a second round of EZs - 15 new urban and 5 new rural zones.
Youth Opportunity Initiative and GEAR-UP. In addition to expanding the Earned Income
Tax Credit and raising the minimum wage, President Clinton has focused on bringing economic
opportunity to young people through the Youth Opportunity initiative and GEAR-UP program.
The Youth Opportunity initiative provides skills training leading to job opportunities for out-of-
school youth aged 16-24. GEAR-UP helps disadvantaged high-school students prepare for
college through mentoring and other forms of assistance.
NEXT STEPS AND FOLLOWUP TO THE NEW MARKETS TRIP. This month, the President will announce
a New Markets legislative proposal that - through new tax incentives and investment tools -- will make
it more attractive for corporate America to search for opportunities in places where they have rarely
looked before. There are also several events being planned by Cabinet members to amplify and build
upon the new private sector commitments announced as part of the President's New Markets trip.
Lastly, the President will take a second New Markets tour later this year to once again focus the
nation's attention on America's economically distressed communities and to mobilize new private
sector investment.
2
THE NEW MARKETS INITIATIVE: BUDGET IMPACT
The New Markets initiative will prompt approximately $15 billion in new investment in urban
and rural areas over five years through:
The New Markets Tax Credit --To help spur $6 billion in new equity capital for investment in
Americas New Markets, the New Markets Tax Credit will be worth up to 25 percent for
investments in a wide range of vehicles serving these communities, including community
development banks, venture funds and corporations, new investment company programs
(targeted SBICs, NMVC firms, and APICs -- see descriptions below), and other targeted
investment funds. Credits would be allocated to the targeted investment vehicles which could
use the tax credits to attract investors. The investment funds would make their own decisions
about what investments or loans to make to help create and grow businesses in the New Markets.
A wide range of businesses could be financed by these investment funds, including small
technology firms, inner-city shopping centers, manufacturers with hundreds of employees, and
retail stores.
Budget Impact:
The New Markets Tax Credit will cost approximately $980 million over
five years.
America's Private Investment Companies (APICs). For years, America has supported OPIC,
the Overseas Private Investment Corporation, to promote growth in emerging markets abroad.
Now we must do the same thing in America's New Markets. Under this program, investors will
put equity into new private investment partnerships to be known as America's Private
Investment Companies (APICs). HUD and SBA working together will provide up two times the
private capital in loan guarantees for each. APICs will make equity investments in larger
businesses that are expanding or relocating in inner cities and rural areas. Under the financing
structure, the private investors' funds are at risk ahead of the government.
Budget impact:
APICs will cost $36 million in credit subsidy (at a rate of 3.6%, allowing
up to $1 billion in government guarantees) and $1 million for HUD's
administrative costs.
SBICs Targeted to New Markets. Over 40 years, the SBA's small business investment
company (SBIC) program has provided roughly $20 billion in equity and debt financing to more
than 85,000 different companies, helping them at a critical stage to grow from small businesses
to household names, like AOL and Staples. However, too little of the capital invested has
benefited our cities and rural distressed communities. Last summer, the Vice President
challenged the SBA to find ways to meet better the needs of minority firms and underserved
markets. In response, SBA determined that, under existing legislation, the Agency can offer
more flexibility and new financing terms to make it more attractive for SBICs to invest in
3
businesses in low and moderate income (LMI) areas. Specifically, SBICs making LMI
investments will be eligible for a new type of federally guaranteed loan to augment their capital
for business investment. Interest on the guaranteed funding will be deferred for the first five
years of the 10-year term to give SBICs more time to nurture their investments in small
businesses before they must produce a return. In addition, SBA will conduct an aggressive
outreach campaign around the country to promote LMI investments.
Budget impact:
No new loan subsidy budget authority is required for this initiative as
the SBIC debentures program has a 0% credit subsidy rate. However,
the commitment level for the SBIC debenture program must be
increased (from $640 million in FY 99 to $800 million in FY 2000) in
order to ensure that the new targeted activity does not crowd out activity
by traditional SBICs.
New Markets Venture Capital Firms (NMVCs). There are thousands of inner-city and rural
entrepreneurs who need both capital and expert guidance to transform their small businesses and
great ideas into thriving companies. SBA will select ten-to-twenty NMVC firms whose
management has successful records in community-based venture capital. The equity funds of
private investors will be matched with loan guarantees of up to $10 million per NMVC, with
interest on the debt deferred. Investors must also provide at least $1.5 million in technical
assistance over five years to the target firms, matching SBA's grants of technical assistance. The
program should provide long-term, patient growth capital and facilitate critically needed
technology and management skills development for smaller businesses in new markets.
Budget impact:
The NMVC firms will cost $15 million in credit subsidy for loan
guarantees (at a credit subsidy rate of 15%, allowing $100 million in
government guarantees) and $30 million for technical assistance grants.
New Markets Lending Companies (NMLC). For the first time in many years, SBA will
approve approximately 10 new non-bank lenders -- firms authorized to originate loans under
SBA's largest loan program -- the 7(a) General Business Loan Guaranty program. Under the
7(a) program, SBA guarantees up to 80% of a loan that is made by a lender to a creditworthy
small business that cannot otherwise secure financing on reasonable terms. The firms selected
must have a strategy to target their lending to underserved areas.
Budget Impact:
No additional budget authority is necessary to license these new non-
bank lenders.
Continued Growth for CDFIs. Community Development Financial Institutions (CDFIs),
locally-based institutions with expertise in lending and investment in underserved areas,
represent an important vehicle for greater investment in new markets. The federal contribution to
building these institutions must continue to grow.
4
Budget impact:
The CDFI Fund will cost $125 million in FY 2000, including $15
million for new microenterprise activities under the Program for
Investments in Microentrepenuers (PRIME) Act (now pending with
bipartisan support before Congress) and an increase of $15 million over
FY 99 levels.
Microenterprise Lending and Technical Assistance. Microenterprise initiatives in the FY
2000 budget include: (1) PRIME, under which the CDFI Fund will provide microenterprise
technical assistance and capacity building program to award grants on a competitive basis to
microenterprise development organizations and programs that focus on low-income
entrepreneurs; (2) doubling support for technical assistance in SBA's Microloan Program, which
links loans entrepreneurs with the provision of training and technical assistance; (3) doubling
support for SBA lending to leverage over $75 million in new microlending; (4) doubling funding
for Individual Development Accounts (IDAs), to empower lower-income individuals to start a
new business, invest in a first home, or save for post-secondary education; and (5) tripling
funding for SBA's One-Stop Capital Shops, which offer microenterprise development (including
direct access to microlenders), personal finance, and even credit repair services in Empowerment
Zones.
Budget impact:
(1) As described above, PRIME will cost $15 million in FY 2000; (2)
SBA's microloan technical assistance and training will cost $ 32 million
in FY 2000 (up from $16 million in FY 99); (3) SBA's microlending will
cost $5 million in credit subsidy (up from $3 million in FY 99); (4) IDAs
will cost $20 million in FY 2000 (up from $10 million in FY 99); and (5)
One-Stop Capital Shops will cost $10 million in FY 2000 up from $3.1
million in FY 99.
BusinessLINC. The President's budget provides resources to expand BusinessLINC -- an
innovative public-private partnership launched by Vice President Gore and led by Treasury
Secretary Rubin and SBA Administrator Alvarez --to new markets in economically distressed
communities. BusinessLINC (Learning, Information, Networking and Collaboration) is
designed to encourage large businesses to work with small business owners and entrepreneurs in
order to improve the economic competitiveness of smaller firms located in distressed areas, both
urban and rural. The funds will be used to leverage private sector efforts to spur new
BusinessLINC partnerships at the national and local level.
Budget Impact:
BusinessLINC will cost $3 million in FY 2000.
Specialized Small Business Investment Companies (SSBICs). The President's budget will
expand current tax incentives to increase the amount of equity capital available to economically
disadvantaged people by making it easier for Specialized Small Business Investment Companies
(SSBICs) to qualify as tax-favored regulated investment companies.
Budget Impact:
This change to tax rules will have a negligible budget impact.
5
CAPITAL JOURNAL
I
TS CLASSIC NEW Democrat think
ing: Marshal public resources to cre-
By GERALD F. SEM
ate private-sector growth that gives
an opportunity (but no guarantees) to
Clinton on Tour:
people who help themselves. And it's de-
signed for political advantage: It appeals
to liberals by taking on a pet cause.
Battling Poverty
poverty, and to conservatives by finding
the answer in the marketplace.
"I believe basically that this ought to
The "Third Way'
be something the Republicans would
love. because It
uses tax incentives
A
S HE TALKED by phone from the
to leverage pri-
sweltering Mississippi Delta yes-
vate-sector invest-
terday. it was clear that President
ment in places
Clinton was reveling in a return to his
where they decide
roots.
whether they will
Not his Southern roots, but his roots
make money or
as a New Democrat pushing a "third
not," Mr. Clinton
way" of using gov.
said. The initiative
ernment that lies
got a good start
somewhere be-
yesterday. when
tween traditional
Bank of America
liberalism and tra-
Bill Clinton
Corp. announced
ditional conser-
that It is creating 1
vatism. Mr. Clin-
$500 million equity-investment fund for
ton is in the midst
distressed areas.
of a four-day New
If nothing else, the president's initia-
Markets Tour of
tive shines a light on the changing nature
the country. an-
of poverty in America. Those longstand-
nouncing new tax
ing stereotypes of economic depression-
incentives and gov-
Harlem. Detroit, Watts, the Bronx-have
ernment-backed
to be revised. Such places still have
loans designed to
poverty, of course. but the list of commu-
generate venture capital for launching
nities left behind in today's economic
businesses in the nation's pockets of
boom runs more toward small to mid-
poverty.
sized cities.
There are plenty of reasons to be skep-
"I think that the restructuring of the
tical. even cynical. about another federal
American economy has tended to favor
effort to battle poverty. But whatever its
the renaissance of the large cities." Mr.
ultimate effectiveness. this initiative rep-
Clinton said. "A lot of these small and
resents a nearly pure example of the kind
midsized cities, depending on their phys-
of New Democrat thinking Mr. Clinton
tcal location and the nature of the pre-ex-
promised when he entered office-and
isting economic network. haven't gotten
the kind he would bequeath to the Demo-
the new jobs to replace the old."
cratic Party.
"In some ways it's the perfect embod-
iment of the third-way philosophy," Mr.
A
RECENT REPORT by the Depart-
ment of Housing and Urban Devel-
Clinton said in an interview. "What
opment on distressed cities lists a
we're doing basically is using the gov-
strikingly diverse array of names not
ernment to facilitate a public-private
hormally associated with poverty and un-
partnership at the grass-roots level. It's
employment: Fresno, Calif.: Yakima.
not government alone, it's not private
Wash.: Beaumont, Texas; Lake Charles,
sector alone, but it's a partnership. and I
La "A lot of the small and mid-sized
think It will genuinely change the land-
cities were dependent on elements of the
scape."
economy that are no longer thriving. and
That, of course. remains to be seen.
were relatively heavily dependent on a
For starters. the legislation implement-
given factory, for example," Mr. Clinton
ing his initiative still has to be passed
said.
by a Republican Congress that may not
The promise of this week's initiative
be seized by anti-poverty programs at a
isn't to recreate those old businesses. but
time of economic boom and 4.3% unem-
to provide seed money for new ones. Con-
ployment. But if Congress goes along.
gress and the administration already
the initiative would allow both small
have done some of this by creating "em-
and some large venture-capital firms
powerment tones" to give tax breaks for
that invest in low-income areas to qual-
investments in some specific areas. Yet
ify for $2 in government-guaranteed
many troubled towns "may never get an
loans for every $1 they raise privately.
empowerment zone, even If Congress
Interest payments could be deferred for
gives me 20 or 30 more," Mr. Clinton
five years. and entrepreneurs could get
noted. The new incentives, by contrast,
technical help. Investors would get a
could apply to any troubled city.
25% tax credit for investments in new
Mr. Clinton's final appeal to the busi-
ventures or community development
ness community is a practical one. In-
banks.
vestors have been worrying for months
where the economy would find the work-
ers and capacity to keep economic growth
THE WALL STREET JOURNAL
humming without inflation. The answer,
he suggests, lies in the spots America's
6
WEDNESDAY. JULY 7. 1999
boom has left behind.
Clinton's "Third Way' to Beat Poverty
President Touts Blend of Left and Right in Tour of Poor Areas
By CHARLES BABINGTON
youth training at Southwest Col-
center's vice president for econom-
Washington Post Staff Writer
lege in Los Angeles. Those sharing
ic research. She added, however,
the stage included the chief execu-
that declaring a depressed area as
LOS ANGELES, July 8-In
tives of United Parcel Service Inc.
an "empowerment zone" can back-
stumping the nation this week to
and Toyota Motor Sales USA as
fire if businesses need to expand
bring jobs and hope to impover-
well as Rep. Maxine Waters (D-
and relocate to suburban areas for
ished regions, President Clinton
Calif.), an outspoken liberal It was
transportation purposes. Such
has mixed a dash of liberalism's old
typical of the entourages Clinton
firms would lose their tax benefits,
War on Poverty with a pinch of
brought to Appalachia, the Missis-
she said, even though research
conservatism's laissez-faire philos-
sippi Delta and the other stops on
shows they still would hire mostly
ophy, yielding his latest recipe for
his tour.
minority employees.
centrist solutions to society's chal-
Every event featured announce-
Al From, head of the Democratic
lenges.
ments of government incentives
Leadership Council and a champi-
At all six stops on his "New
and corporate pledges meant to
on of Third Way thinking, joined
Markets" tour, which ended today
create jobs, improve housing, stim-
Clinton for most of this week's
with visits to job-training pro-
ulate investment or boost employ-
tour. He said the "New Markets"
grams in this city's Watts and
ee training. Today's announce-
program "isn't a government solu-
South Central neighborhoods,
ments included $250 million in
tion."
Clinton has flanked himself with
Labor Department grants for the
It's a way to use government
corporate titans and staunch social
"Youth Opportunities" program.
resources effectively to leverage
liberals. His message: Hard-
which targets low-income, out-of-
capital investment in these mar-
pressed areas need private invest-
school youths for job training. Al-
kets that have been left behind."
ments to recover economically. but
so, Lucent Technologies and other
From said.
corporations won't spend their
corporations pledged $8 million to
money there without increased
create "information technology
Clinton summed up his thinking
academies" to provide computer
in an interview with CNBC during
government incentives, such as tax
training that could help such
Tuesday's stop in Clarksdale,
credits and loan guarantees.
The president calls it a classic
youths launch careera.
Miss. "This is a classic example,
example of the "Third Way" ap-
Many advocates for the poor
this approach to new markets, of
proach. The touchstone of "New
have saluted Clinton's trip, even if
the New Democratic or Third Way
Democrats," it holds that neither
they privately complain that it has
philosophy that I articulated back
solidly liberal nor solidly conserva-
come late in his administration.
in 1991 and 1992," be said. That
tive strategies will work, but a
Some conservatives, meanwhile,
is, government's role is to create
politically massaged blend of the
say that pumping more money into
the conditions for success, give
deeply depressed areas-even if it
people the tools they need to suc-
two can.
Not surprisingly, some critics
is both public and private funds—
ceed and then, in effect, empower
from the left and right deride the
won't overcome entrenched behav-
people to make the most of it."
Third Way as wishy-washy com-
ioral patterns that tie people to
In an interview published last
promise. Clinton, however, has
Friday in the Los Angeles Times,
poverty.
ridden the philosophy from the
The general rule in the United
Clinton suggested that Texas Gov.
Arkansas statehouse to the White
States is that people move to eco-
George W. Bush-the leading
House, convincing millions of vot-
nomic success, economic success
GOP candidate for president-is
ers that the smartest path lies
doesn't move to them." said Robert
copying Clinton-Gore administra-
somewhere between Ronald Rea-
Rector of the Heritage Foundation.
tion policies, especially in Third
gan's tax breaks for the wealthy
Pouring investments into the Mis-
Way areas.
and Lyndon B. Johnson's govern-
sissippi Delta, be said, will not
He said Bush's campaign is
ment-driven Great Society.
dramatically increase jobs there
"very flattering in a way because it
The president summarized his
because "that's not a good industri-
replicates the rhetoric" that Clin-
thoughts in a speech Tuesday in
al area, it's a good cotton area"-
ton has used in emphasizing
economically depressed East St.
and cotton no longer requires
themes such as linking opportunity
Louis, III. at the midpoint of his
many workers.
and responsibility. He said Bush's
four-day tour. In the 1992 cam-
Even though Congress and Clin-
"compassionate conservatism"
paign, be began, T said that we
ton have reduced welfare benefits,
might be a ruse to allow congres-
ought to have a new role for
Rector said, the government con-
sional Republicans to pursue a
government, that government
tinues to "reward non-work and
more conservative agenda if Bush
couldn't solve all the problems, but
non-marriage." Until that changes,
gets elected in November 2000.
walking away from them did not
be said, high rates of joblessness,
Asked whether Bush's lead in
work very well, either.
In the
crime and illegitimacy will prevail
the polls over Vice President Gore
inner cities and the rural areas of
in the areas Clinton visited this
indicates a public desire for
our country, lines have divided
week.
change, the president said: "I think
those who worked hard [but] had
But the more liberal Joint Cen-
there is a constant desire for
no money, and those who had
ter for Political and Economic
change. But I think what you will
plenty of money but didn't believe
Study praises Clinton's approach
see by next year is that the vice
it could be very well spent in the
on poverty. T think the general
president will be the candidate of
inner city or in rural areas."
idea is certainly a useful combina-
change. People will have to decide
He underscored his message to-
tion of public and private partner-
If they want the change going on
day in a round-table discussion on
ship," said Margaret Simms, the
[now]."
7
The Washington Post
FRIDAY. JULY 9. 1999
THE WHITE HOUSE
WASHINGTON
AMERICA'S NEW MARKETS:
UNTAPPED AREAS FOR
POTENTIAL INVESTMENT
Background on New Markets Initiative
Pages 1-2
Budget Impact of New Markets Initiative
Pages 3-5
Gerald Seib: The Wall Street Journal, July 7,
1999: "Clinton on Tour: Battling Poverty the
'Third Way"
Page 6
Charles Babington: The Washington Post,
July 9, 1999: "Clinton's 'Third Way' to
Beat Poverty"
Page 7
PRESIDENT CLINTON'S CHALLENGE TO THE PRIVATE SECTOR
TO INVEST IN AMERICA'S NEW MARKETS
Presentation to the New Democratic Coalition - August 3, 1999
"I think it important to recognize that this is different, because we don it say the government can
solve all these problems, but we do say the government can no longer ignore them and, in fact,
we 've been working on them for six and a half years, ever since I took office. This is a classic example,
this approach to new markets, of the New Democratic or Third Way philosophy that I articulated
back in 1991 and 1992. That is, government's role is to create conditions for success, give people the
tools they need to succeed, and then, in effect, empower people to make the most of it.
"
-- President Clinton, MSNBC Interview, July 6, 1999
PROMOTING NEW EFFORTS AND AN INITIATIVE TO ATTRACT CAPITAL TO UNDERSERVED AREAS.
As part of a bipartisan focus on underserved urban and rural areas, President Clinton is seeking ways to
expand current community development and investment efforts. President Clinton's New Markets
Initiative will build upon these existing programs and help create the conditions for economically
successful investment in underserved inner city and rural areas. Included among the elements of the
plan are:
The New Markets Tax Credit. To help spur $6 billion in equity capital for investment in
America's new markets, President Clinton and Vice President Gore have proposed a tax credit
worth 25 percent for investments in a wide range of vehicles. Eligible investment companies
include community development banks, venture funds and corporations, and the new
investment company programs created by this initiative.
America's Private Investment Companies (APICs). Just as America's support for the
Overseas Private Investment Corporation helps promote growth in emerging markets abroad,
APIC will encourage private investment in this country's untapped markets. HUD and SBA
will guarantee loans up to $200 million, creating investment funds as large as $300 million to
invest in new development projects and larger businesses that are expanding or relocating in
inner city and rural areas. Under the financing structure, the private investors' funds are at risk
ahead of the government
New Markets Venture Capital (NMVC) Firms. NMVC firms will make both capital and
expert guidance available to small business entrepreneurs in inner-city and rural areas. Ten to
twenty NMVC firms are planned. SBA will match the equity and technical assistance of
private investors.
SBIC's Targeted to New Markets. For more than 40 years, SBA's Small Business
Investment Company (SBIC) program has provided roughly $20 billion in equity and debt
financing to more than 85,000 different companies, helping them to grow from small
businesses to household names, like AOL and Staples. However, too little of the capital
invested has benefited economically distressed communities. The New Markets Initiative
includes proposed regulatory changes, that will enable SBA to offer more flexibility and new
financing terms for Small Business Investment Companies (SBICs) that invest in underserved
areas.
PRESIDENT CLINTON'S TRIP TO NEW MARKETS AND MOBILIZATION OF THE PRIVATE SECTOR.
From July 5-8, President Clinton led a delegation on an unprecedented trip of untapped markets
throughout the nation, making stops in several impoverished communities including areas of
Appalachia, a native American reservation and the Mississippi Delta. The trip was modeled after the
type of trade missions that Cabinet Secretaries and CEOs often take overseas to identify markets,
which - through trade and commercial agreements - can help to create jobs and expand economic
development. As part of the trip, President Clinton mobilized a broad array of private-sector
investments and announced several hundred million dollars in new commitments and innovative
programs developed by companies, community leaders, non-profit organizations and investment firms
around the country.
A RECORD TO BUILD ON. President Clinton's effort expands on the innovative approach to
community empowerment that he and the Vice President have pioneered for nearly seven years.
Creating the CDFI Fund. In 1994, President Clinton proposed and signed into law the CDFI
Fund which, through grants, loans, and equity investments, is helping to create a network of
community development financial institutions in distressed areas across the United States.
Reforming CRA. In 1995, the Clinton Administration reformed the CRA regulations to
emphasize performance. The private sector has pledged more than $1 trillion going forward in
loans to distressed communities - and more than 95% of these financial commitments have
been made since 1992. (NCRC)
Creating the Empowerment Zones. President Clinton and Vice President Gore proposed and
signed Empowerment Zone legislation in 1993 establishing 105 EZs and ECs across the
country. The EZ/EC effort has generated billions of dollars in new private sector investment
in community development activities.
Brownfields and Second Round of EZs. The Administration's Brownfields action agenda
has marshaled funds to clean up and redevelop up to 5,000 properties, leveraging billions of
dollars in private investment and creating and supporting 196,000 jobs. The President has also
signed into law a second round of EZs - 15 new urban and 5 new rural zones.
Youth Opportunity Initiative and GEAR-UP. In addition to expanding the Earned Income
Tax Credit and raising the minimum wage, President Clinton has focused on bringing economic
opportunity to young people through the Youth Opportunity initiative and GEAR-UP program.
The Youth Opportunity initiative provides skills training leading to job opportunities for out-of-
school youth aged 16-24. GEAR-UP helps disadvantaged high-school students prepare for
college through mentoring and other forms of assistance.
NEXT STEPS AND FOLLOWUP TO THE NEW MARKETS TRIP. This month, the President will announce
a New Markets legislative proposal that - through new tax incentives and investment tools -- will make
it more attractive for corporate America to search for opportunities in places where they have rarely
looked before. There are also several events being planned by Cabinet members to amplify and build
upon the new private sector commitments announced as part of the President's New Markets trip.
Lastly, the President will take a second New Markets tour later this year to once again focus the
nation's attention on America's economically distressed communities and to mobilize new private
sector investment.
2
THE NEW MARKETS INITIATIVE: BUDGET IMPACT
The New Markets initiative will prompt approximately $15 billion in new investment in urban
and rural areas over five years through:
The New Markets Tax Credit --To help spur $6 billion in new equity capital for investment in
Americas New Markets, the New Markets Tax Credit will be worth up to 25 percent for
investments in a wide range of vehicles serving these communities, including community
development banks, venture funds and corporations, new investment company programs
(targeted SBICs, NMVC firms, and APICs -- see descriptions below), and other targeted
investment funds. Credits would be allocated to the targeted investment vehicles which could
use the tax credits to attract investors. The investment funds would make their own decisions
about what investments or loans to make to help create and grow businesses in the New Markets.
A wide range of businesses could be financed by these investment funds, including small
technology firms, inner-city shopping centers, manufacturers with hundreds of employees, and
retail stores.
Budget Impact:
The New Markets Tax Credit will cost approximately $980 million over
five years.
America's Private Investment Companies (APICs). For years, America has supported OPIC,
the Overseas Private Investment Corporation, to promote growth in emerging markets abroad.
Now we must do the same thing in America's New Markets. Under this program, investors will
put equity into new private investment partnerships to be known as America' S Private
Investment Companies (APICs). HUD and SBA working together will provide up two times the
private capital in loan guarantees for each. APICs will make equity investments in larger
businesses that are expanding or relocating in inner cities and rural areas. Under the financing
structure, the private investors' funds are at risk ahead of the government.
Budget impact:
APICs will cost $36 million in credit subsidy (at a rate of 3.6%, allowing
up to $1 billion in government guarantees) and $1 million for HUD's
administrative costs.
SBICs Targeted to New Markets. Over 40 years, the SBA's small business investment
company (SBIC) program has provided roughly $20 billion in equity and debt financing to more
than 85,000 different companies, helping them at a critical stage to grow from small businesses
to household names, like AOL and Staples. However, too little of the capital invested has
benefited our cities and rural distressed communities. Last summer, the Vice President
challenged the SBA to find ways to meet better the needs of minority firms and underserved
markets. In response, SBA determined that, under existing legislation, the Agency can offer
more flexibility and new financing terms to make it more attractive for SBICs to invest in
3
businesses in low and moderate income (LMI) areas. Specifically, SBICs making LMI
investments will be eligible for a new type of federally guaranteed loan to augment their capital
for business investment. Interest on the guaranteed funding will be deferred for the first five
years of the 10-year term to give SBICs more time to nurture their investments in small
businesses before they must produce a return. In addition, SBA will conduct an aggressive
outreach campaign around the country to promote LMI investments.
Budget impact:
No new loan subsidy budget authority is required for this initiative as
the SBIC debentures program has a 0% credit subsidy rate. However,
the commitment level for the SBIC debenture program must be
increased (from $640 million in FY 99 to $800 million in FY 2000) in
order to ensure that the new targeted activity does not crowd out activity
by traditional SBICs.
New Markets Venture Capital Firms (NMVCs). There are thousands of inner-city and rural
entrepreneurs who need both capital and expert guidance to transform their small businesses and
great ideas into thriving companies. SBA will select ten-to-twenty NMVC firms whose
management has successful records in community-based venture capital. The equity funds of
private investors will be matched with loan guarantees of up to $10 million per NMVC, with
interest on the debt deferred. Investors must also provide at least $1.5 million in technical
assistance over five years to the target firms, matching SBA's grants of technical assistance. The
program should provide long-term, patient growth capital and facilitate critically needed
technology and management skills development for smaller businesses in new markets.
Budget impact:
The NMVC firms will cost $15 million in credit subsidy for loan
guarantees (at a credit subsidy rate of 15%, allowing $100 million in
government guarantees) and $30 million for technical assistance grants.
New Markets Lending Companies (NMLC). For the first time in many years, SBA will
approve approximately 10 new non-bank lenders -- firms authorized to originate loans under
SBA's largest loan program -- the 7(a) General Business Loan Guaranty program. Under the
7(a) program, SBA guarantees up to 80% of a loan that is made by a lender to a creditworthy
small business that cannot otherwise secure financing on reasonable terms. The firms selected
must have a strategy to target their lending to underserved areas.
Budget Impact:
No additional budget authority is necessary to license these new non-
bank lenders.
Continued Growth for CDFIs. Community Development Financial Institutions (CDFIs),
locally-based institutions with expertise in lending and investment in underserved areas,
represent an important vehicle for greater investment in new markets. The federal contribution to
building these institutions must continue to grow.
4
Budget impact:
The CDFI Fund will cost $125 million in FY 2000, including $15
million for new microenterprise activities under the Program for
Investments in Microentrepenuers (PRIME) Act (now pending with
bipartisan support before Congress) and an increase of $15 million over
FY 99 levels.
Microenterprise Lending and Technical Assistance. Microenterprise initiatives in the FY
2000 budget include: (1) PRIME, under which the CDFI Fund will provide microenterprise
technical assistance and capacity building program to award grants on a competitive basis to
microenterprise development organizations and programs that focus on low-income
entrepreneurs; (2) doubling support for technical assistance in SBA's Microloan Program, which
links loans entrepreneurs with the provision of training and technical assistance; (3) doubling
support for SBA lending to leverage over $75 million in new microlending; (4) doubling funding
for Individual Development Accounts (IDAs), to empower lower-income individuals to start a
new business, invest in a first home, or save for post-secondary education; and (5) tripling
funding for SBA's One-Stop Capital Shops, which offer microenterprise development (including
direct access to microlenders), personal finance, and even credit repair services in Empowerment
Zones.
Budget impact:
(1) As described above, PRIME will cost $15 million in FY 2000; (2)
SBA's microloan technical assistance and training will cost $ 32 million
in FY 2000 (up from $16 million in FY 99); (3) SBA's microlending will
cost $5 million in credit subsidy (up from $3 million in FY 99); (4) IDAs
will cost $20 million in FY 2000 (up from $10 million in FY 99); and (5)
One-Stop Capital Shops will cost $10 million in FY 2000 up from $3.1
million in FY 99.
BusinessLINC. The President's budget provides resources to expand BusinessLINC -- an
innovative public-private partnership launched by Vice President Gore and led by Treasury
Secretary Rubin and SBA Administrator Alvarez --to new markets in economically distressed
communities. BusinessLINC (Learning, Information, Networking and Collaboration) is
designed to encourage large businesses to work with small business owners and entrepreneurs in
order to improve the economic competitiveness of smaller firms located in distressed areas, both
urban and rural. The funds will be used to leverage private sector efforts to spur new
BusinessLINC partnerships at the national and local level.
Budget Impact:
BusinessLINC will cost $3 million in FY 2000.
Specialized Small Business Investment Companies (SSBICs). The President's budget will
expand current tax incentives to increase the amount of equity capital available to economically
disadvantaged people by making it easier for Specialized Small Business Investment Companies
(SSBICs) to qualify as tax-favored regulated investment companies.
Budget Impact:
This change to tax rules will have a negligible budget impact.
5
CAPITAL JOURNAL
I.
TS CLASSIC NEW Democrat think-
BY GERALD F. SEM
ing: Marshal public resources to cre-
ate private-sector growth that gives
an opportunity (but no guarantees) to
Clinton on Tour:
people who help themselves. And it's de
signed for political advantage: It appeals
to liberals by taking on a pet cause.
Battling Poverty
poverty, and to conservatives by finding
the answer in the marketplace.
"I believe basically that this ought to
The "Third Way'
be something the Republicans would
love. because It
uses tax incentives
A
S HE TALKED by phone from the
to leverage pri-
sweltering Mississippi Delta yes-
vate-sector invest-
terday. it was clear that President
ment in places
Clinton was reveling in a return to his
where they decide
roots.
whether they will
Not his Southern roots, but his roots
make money or
as a New Democrat pushing a "third
not," Mr. Clinton
way" of using gov-
said. The initiative
ernment that lies
got a good start
somewhere be-
yesterday. when
tween traditional
Bank of America
liberalism and tra-
Bill Clinton
Corp. announced
ditional conser-
that it is creating a
vatism. Mr. Clin-
$500 million equity-investment fund for
ton is in the midst
distressed areas.
of a four-day New
If nothing else, the president's initia-
Markets Tour of
tive shines a light on the changing nature
the country. an-
of poverty in America. Those longstand-
nouncing new tax
ing stereotypes of economic depression-
incentives and gov-
Harlem. Detroit, Watts, the Bronx-have
ernment-backed
to be revised. Such places still have
loans designed to
poverty, of course. but the list of commu-
generate venture capital for launching
nities left behind in today's economic
businesses in the nation's pockets of
boom runs more toward small to mid-
poverty.
sized cities.
There are plenty of reasons to be skep-
"I think that the restructuring of the
tical. even cynical. about another federal
American economy has tended to favor
effort to battle poverty. But whatever its
the renaissance of the large cities," Mr.
ultimate effectiveness. this initiative rep-
Clinton said. "A lot of these small and
resents a nearly pure example of the kind
midsized cities. depending on their phys-
of New Democrat thinking Mr. Clinton
ical location and the nature of the pre-ex-
promised when he entered office-and
isting economic network, haven't gotten
the kind he would bequeath to the Demo-
the new jobs to replace the old."
cratic Party.
"In some ways it's the perfect embod-
iment of the third-way philosophy," Mr.
A
RECENT REPORT by the Depart-
ment of Housing and Urban Devel-
Clinton said in an interview. "What
opment on distressed cities lists &
we're doing basically is using the gov-
strikingly diverse array of names not
ernment to facilitate a public-private
hormally associated with poverty and un-
partnership at the grass-roots level. It's
employment: Fresno, Calif.: Yakima.
not government alone, it's not private
Wash: Beaumont, Texas: Lake Charles,
sector alone, but it's 8 partnership. and I
"A lot of the small and mid-sized
think It will genuinely change the land-
cities were dependent on elements of the
scape."
economy that are no longer thriving. and
That, of course. remains to be seen.
were relatively heavily dependent on a
For starters, the legislation implement-
given factory for example." Mr. Clinton
ing his initiative still has to be passed
said.
by a Republican Congress that may not
The promise of this week's initiative
be seized by anti-poverty programs at a
isn't to recreate those old businesses, but
time of economic boom and 4.3% unem-
to provide seed money for new ones. Con-
ployment. But if Congress goes along.
gress and the administration already
the initiative would allow both small
have done some of this by creating "em-
and some large venture-capital firms
powerment zones" to give tax breaks for
that invest in low-income areas to qual-
investments in some specific areas. Yet
ify for $2 in government-guaranteed
many troubled towns "may never get an
loans for every $1 they raise privately.
empowerment zone, even if Congress
Interest payments could be deferred for
gives me 20 or 30 more," Mr. Clinton
five years. and entrepreneurs could get
noted. The new incentives, by contrast,
technical help. Investors would get a
could apply to any troubled city.
25% tax credit for investments in new
Mr. Clinton's final appeal to the busi-
ventures or community development
ness community is a practical one. In-
banks.
vestors have been worrying for months
where the economy would find the work-
ers and capacity to keep economic growth
THE WALL STREET JOURNAL
humming without inflation. The answer.
he suggests. lies in the spots America's
6
WEDNESDAY. JULY 7. 1999
boom has left behind.
Clinton's "Third Way' to Beat Poverty
President Touts Blend of Left and Right in Tour of Poor Areas
By CHARLES BABINGTON
youth training at Southwest Col-
center's vice president for econom-
Washington Post Swff Writer
lege in Los Angeles. Those sharing
ic research. She added, however,
the stage included the chief execu-
that declaring a depressed area as
LOS ANGELES, July 8-In
tives of United Parcel Service Inc.
an "empowerment zone" can back-
stumping the nation this week to
and Toyota Motor Sales USA as
fire if businesses need to expand
bring jobs and hope to impover-
well as Rep. Maxine Waters (D-
and relocate to suburban areas for
ished regions, President Clinton
Calif.). an outspoken liberal. It was
transportation purposes. Such
has mixed a dash of liberalism's old
typical of the entourages Clinton
firms would lose their tax benefits,
War on Poverty with a pinch of
brought to Appalachia, the Missis-
she said, even though research
conservatism's laissez-faire philos-
sippi Delta and the other stops on
shows they still would hire mostly
ophy. yielding his latest recipe for
his tour.
minority employees.
centrist solutions to society's chal-
Every event featured announce-
Al From. head of the Democratic
lenges.
ments of government incentives
Leadership Council and a champi-
At all six stops on his "New
and corporate pledges meant to
on of Third Way thinking, joined
Markets" tour, which ended today
create jobs, improve housing, stim-
Clinton for most of this week's
with visits to job-training pro-
ulate investment or boost employ-
tour. He said the "New Markets"
grams in this city's Watts and
ee training. Today's announce-
program "isn't a government solu-
South Central neighborhoods,
ments included $250 million in
tion."
Clinton has flanked himself with
Labor Department grants for the
"It's a way to use government
corporate titans and staunch social
"Youth Opportunities" program,
resources effectively to leverage
liberals. His message: Hard-
which targets low-income, out-of-
capital investment in these mar-
pressed areas need private invest-
school youths for job training. Al-
kets that have been left behind."
ments to recover economically, but
so, Lucent Technologies and other
From said.
corporations won't spend their
corporations pledged $8 million to
money there without increased
create "information technology
Clinton summed up his thinking
academies" to provide computer
in an interview with CNBC during
government incentives, such as tax
training that could help such
Tuesday's stop in Clarksdale,
credits and loan guarantees.
The president calls it a classic
youths launch careers.
Miss. This is a classic example,
example of the "Third Way" ap-
Many advocates for the poor
this approach to new markets, of
proach. The touchstone of "New
have saluted Clinton's trip, even if
the New Democratic or Third Way
Democrats," it holds that neither
they privately complain that it has
philosophy that I articulated back
solidly liberal nor solidly conserva-
come late in his administration.
in 1991 and 1992," he said. That
tive strategies will work, but a
Some conservatives, meanwhile,
is, government's role is to create
politically massaged blend of the
say that pumping more money into
the conditions for success, give
deeply depressed areas-even if it
people the tools they need to suc-
two can.
Not surprisingly, some critics
is both public and private funds—
ceed and then, in effect, empower
from the left and right deride the
won't overcome entrenched behav-
people to make the most of it."
Third Way as wishy-washy com-
ioral patterns that tie people to
In an interview published last
promise. Clinton, however, has
poverty.
Friday in the Los Angeles Times,
ridden the philosophy from the
The general rule in the United
Clinton suggested that Texas Gov.
Arkansas statehouse to the White
States is that people move to eco-
George W. Bush-the leading
House, convincing millions of vot-
nomic success, economic success
GOP candidate for president-is
ers that the smartest path lies
doesn't move to them." said Robert
copying Clinton-Gore administra-
somewhere between Ronald Rea-
Rector of the Heritage Foundation.
tion policies, especially in Third
gan's tax breaks for the wealthy
Pouring investments into the Mis-
Way areas.
and Lyndon B. Johnson's govern-
sissippi Delta, be said, will not
He said Bush's campaign is
ment-driven Great Society.
dramatically increase jobs there
"very flattering in a way because it
The president summarized his
because "that's not a good industri-
replicates the rhetoric" that Clin-
thoughts in a speech Tuesday in
al area, it's a good cotton area"-
ton has used in emphasizing
economically depressed East St
and cotton no longer requires
themes such as linking opportunity
Louis, III. at the midpoint of his
many workers.
and responsibility. He said Bush's
four-day tour. In the 1992 cam-
Even though Congress and Clin-
"compassionate conservatism"
paign, be began, I said that we
ton have reduced welfare benefits,
might be a ruse to allow congres-
ought to have a new role for
Rector said, the government con-
sional Republicans to pursue a
government, that government
tinues to "reward non-work and
more conservative agenda if Bush
couldn't solve all the problems, but
non-marriage." Until that changes,
gets elected in November 2000.
walking away from them did not
be said, high rates of joblessness,
Asked whether Bush's lead in
work very well. either.
In
the
crime and illegitimacy will prevail
the polls over Vice President Gore
inner cities and the rural areas of
in the areas Clinton visited this
indicates a public desire for
our country, lines have divided
week.
change, the president said: T think
those who worked hard [but] had
But the more liberal Joint Cen-
there is a constant desire for
no money, and those who had
ter for Political and Economic
change. But I think what you will
plenty of money but didn't believe
Study praises Clinton's approach
see by next year is that the vice
it could be very well spent in the
on poverty. I think the general
president will be the candidate of
inner city or in rural areas."
idea is certainly a useful combina-
change. People will have to decide
He underscored his message to-
tion of public and private partner-
if they want the change going on
day in a round-table discussion on
ship," said Margaret Simms, the
[now]."
7
The Washington Post
FRIDAY. JULY 9. 1999