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CUOMO SAYS PRESIDENT CLINTON WILL PROPOSE FUND TO INVEST $750 MILLION IN INNER CITIES AND CREATE AND RETAIN 100,000 JOBS
WASHINGTON - President Clinton's fiscal 2000 Federal Budget will propose investing $750 million in economically distressed communities to create and retain about 100,000 jobs, Housing and Urban Development Secretary Andrew Cuomo said today.
A new Community Empowerment Fund created under the President's proposal would combine $125 million in HUD grants and $625 million in HUD loan guarantees to help finance welfare-to-work programs, city-suburban regional economic partnerships, and other initiatives to help businesses create jobs. Communities would apply for the assistance and HUD would select the top action plans for funding.
Investment from the Fund would help attract new job-producing businesses and help existing businesses expand in cities with high poverty and unemployment rates, where many welfare recipients live, Cuomo said.
"The Community Empowerment Fund will jump-start the economies of inner cities and transform the lives of people living there by creating jobs they so desperately need," Cuomo said. "We will replace welfare checks with paychecks and we will help families to work their way out of poverty and into self-sufficiency. At the same time, we will help revitalize inner cities by creating a new market for private investors to purchase HUD-guaranteed economic development loans."
Initiatives assisted by the new Fund would help welfare recipients go to work by providing them with job training, job placement services, child care and transportation services. Businesses would be helped to boost employment, particularly for welfare recipients. In addition, the Community Empowerment Fund would strengthen cooperation across city and suburban lines by funding regional economic development initiatives. Funding would go to businesses that commit to: training and hiring inner city residents, expanding businesses by setting up additional facilities in central cities, and providing transportation for workers living in cities to get to suburban jobs.
Much of the investment from the Community Empowerment Fund would be used to buy down interest rates on private sector loans and to guarantee repayment of the loans. As a result, businesses in low-income communities would gain access to long-term, low-interest loans that are now unavailable.
The initiative would also provide strong incentives for the standardization and pooling of economic development loans - a crucial step in creating the first-ever private secondary market for such loans.
The Community Empowerment Fund would combine and improve two HUD programs - Economic Development Initiative grants and Section 108 Economic Development Loan Guarantees. These two programs have been extraordinarily successful at creating jobs in distressed communities. Over the past six years, they have committed $3.5 billion in grants and loan guarantees to nearly 600 projects that will create and retain an estimated 300,000 jobs.
The new Fund is designed to help solve the shortage of jobs in many cities and the shortage of available employees in many suburbs. It would also help cities take advantage of growth opportunities created by regional economies.
While most welfare recipients live in cities today, most jobs are being created in suburbs, despite recent increases in urban job growth. As a result, some unemployed city residents who can't afford cars can't get to jobs in suburbs. At the same time, some employers in booming suburbs have difficulty finding needed workers, especially for low-skilled jobs. Creating more jobs in cities and simultaneously improving transportation to get city workers to suburban jobs would benefit both employers and job seekers, Cuomo said.
A report by the U.S. Conference of Mayors estimates that in 74 cities, 1.2 million current welfare recipients will join 409,000 other low-skilled job seekers in looking for work over the next five years. However, these urban areas will produce only 856,000 low-skilled jobs - leaving a total job gap of more than 760,000.
Content Archived: January 20, 2009