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II. New Economy -
While America's great cities and distressed rural communities fell into
disrepair in the 1980s, Washington ignored their fate.
Private enterprise has abandoned these distressed areas, leaving young
people with few job prospects and declining hopes.The Clinton
Administration has launched initiatives that promote
economic opportunity in distressed communities.
The President's initiative, passed by Congress, includes $2.5
billion in tax incentives and $1.3billion in flexible grants to spur
local communities to address barriers to economic growth. Over 500
communities across America took up the EZ challenge, submitting strategic
plans for revitalizing their communities.
The private/public partnerships that have developed as a result of
the EZ/EC application process will be a force for change far into the
future. In Detroit, for example, more than $2 billion in private-sector
commitments have been pledged.
The CDBFI Act creates a network of community development banks and
financial institutions. Their primary mission is to lend, invest, and
provide basic banking services in low- and moderate-income
communities. This initiative will encourage the private sector to work
in places it has not gone before.
When fully leveraged with private capital, the CDBFI program will
create nearly $5 billion in new investments in low and moderate income
The initiative will provide as many as 40,000 loans to
entrepreneurs, expanding businesses, homeowners, and others who might
not otherwise be able to obtain credit.
Community Reinvestment Act
The President issued a directive to reform CRA, the 1977 law to
prevent bank redlining. Under the new regulations, banks will be judged
on performance -- actual lending, investments, and
basic banking services -- rather than paperwork. Reform will unleash
billions in new credit to low- and moderate income communities.
To reduce unnecessary regulatory burdens, a streamlined examination
process applies to about 80% of all banks and S&Ls.
The Administration permanently extended the Low-Income Housing Tax
Credit and the Mortgage Revenue Bond program to encourage private
investors to build affordable housing and to help first-time
Up to 15 new SBA One-Stop Capital Shops will distribute $3 billion
in loans and investment for small and minority business over the next
Capital Gains Rollover and Exclusion -- To encourage capital
investment in small and minority-owned business, the President
signed legislation to provide capital gains tax relief for investments
in certain venture capital companies.
As President Clinton said, [There] needs to be a new partnership between
Washington and the communities and the individuals of this country, and
there needs to be a way of doing business in which we try to create the
conditions in which people can seize opportunities for themselves. The
Clinton Administration's community empowerment strategy is helping
restore the American Dream in distressed areas by focusing on helping
people help themselves.