Urban aid accord reached White House, Congress settle on $1.3 billion

June 18, 1992|By New York Times News Service

WASHINGTON -- After a month of hard-nosed bargaining and political posturing, White House and congressional negotiators agreed yesterday on a $1.3 billion urban aid package including loans and grants for summer jobs for youths and disaster relief for people whose homes and businesses were destroyed in the Los Angeles riots.

The compromise fell far short of what the nation's big-city mayors and some Democratic lawmakers were seeking, and it excluded law-enforcement and investment programs that President Bush wanted passed quickly in the aftermath of the riots.

"It's not sufficient from our viewpoint," said Rep. Richard A. Gephardt of Missouri, the Democratic House leader. "But it's something we need to get done now. We need to move forward.

"I think we'll get it passed in both houses, hopefully tomorrow."

Congressional leaders said they hoped that the agreement would mark the beginning of further negotiations to come up with a plan to establish a program that would grant tax relief and other benefits to businesses seeking to locate in the inner cities.

"This action means that the logjam is finally breaking," said Sen. Edward M. Kennedy of Massachusetts, a Democrat who has led the struggle in the Senate for more urban aid.

Putting a positive interpretation on a package that excluded more than $800 million in money for Head Start and other summer youth programs he had sought, Mr. Kennedy added: "It is gratifying that Congress and the administration are also making progress on a further aid package with substantial additional funds for communities with the greatest need."

The compromise package roughly split the difference between a House aid bill providing $822 million in grants and loans to Los Angeles and Chicago, which Mr. Bush supported, and a Senate bill that would have provided an additional $1.5 billion more in aid to 75 cities that the president said was too costly.

A House-Senate conference committee agreed on a version that came close to the Senate language, but the administration said it was too costly and threatened a veto.

The agreement also served as a compromise between two wings of the administration: one led by Treasury Secretary Nicholas F. Brady, which did not want to give an inch to congressional Democrats, and the other led by Housing Secretary Jack F. Kemp, which wanted to grant substantially more aid.

The package, which must still be passed by the House and Senate, includes all the grants and loans to rebuild homes and businesses damaged in the Los Angeles riots as well as property destroyed in an early April flood in downtown Chicago, and adds $500 million for summer jobs around the country.

Mr. Kennedy said 360,000 youths would be put to work in various federal programs, double the number under current programs.

An aide to Mr. Gephardt, who was the chief congressional negotiator, said Democrats were eager to make a deal with the White House now because "the summer youth program is very time-sensitive."

But by cutting off the negotiations now, the Democrats conceded several other summer programs they sorely wanted. For instance, they wanted an additional $175 million for summer jobs, another $250 million for summer Head Start programs and $250 million for summer school programs for disadvantaged elementary and secondary school students.

The administration, in turn, lost $250 million that the Democrats were willing to include for its new program by which SWAT teams and specially trained police officers would have rid neighborhoods of gangs and drug dealers to provide security as new educational and other social programs were instituted.

The monthlong negotiations ran into snags on several occasions, with Democrats and the White House adding new conditions.

The fact that the majority of Americans have given President Bush low marks on domestic policy and his stewardship of the economy has never been far from the minds of those in the White House in this presidential election year.

There is still an outside chance for more setbacks. Normally such compromise agreement would win easy passage, but it could be blocked by an unusual, de facto coalition of rural-state lawmakers who contend it is too generous and urban-state lawmakers who want more aid.

Even if Congress passes the bill and the president signs it, Mr. Bush must declare a budgetary emergency to allow the money to flow. The money would come outside current budget limits by adding to the federal deficit.

In recent days, Democratic and Republican strategists said they worried that the public would punish both parties if they could not agree to some urban aid package.

"It was nothing as climatic as a handshake at the table," the Gephardt aide said, adding that the next phase of negotiations would focus on the program for tax breaks for inner-cities businesses.

Democrats hope to link various investment incentives to the cuts in capital gains that the administration wants to grant to businesses willing to risk locating in impoverished city neighborhoods.

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