Urban Politics Federal Policy 7

Overview Reagan Era Retrenchment Clinton Continuity W in the City

Reagan Retrenchment Basic economic theory: supply side economics Less government involvement, particularly federal government

Reagan Retrenchment HUD programs cut: –$57 billion (1978) to $9 billion (1989) 35% decrease in all aid to cities over 300,000 $5.2 billion (1980) to $3.4 billion (1989) Federal Aid to to cities as a percent of city revenue dropped from 23% (1980) to 11.6% (1986)

Reagan Retrenchment Aim is to let private sector (market) forces determine the fate of the cities Cities that transform themselves to become more attractive to private investment will succeed, cities that don’t will fail.

Reagan Retrenchment Main tool: provide tax incentives for businesses to relocate to urban areas (Urban Enterprise Zones)

Clinton Continuity No new Urban Programs Empowerment Zones/Enterprise Communities –basically the Republican plan of using tax incentives, and then adding education, job training, and child care

Clinton Continuity Tax incentives: –$3000 to employer in tax credit for each new hire –Accelerated depreciation of business property (tax write off)

Clinton Continuity Targeted Spending –Areas selected as EZ could get up to $100 million in grant money to assist zone residents in services like education job training child care

Clinton Continuity Strategic Planning –Cities required to devise comprehensive strategies for revitalization that focused on the particular “strengths” of the community

Clinton Continuity Partnerships –Attempt made to include participation at the very local level “Community Coordinating Board” –local political leaders –private sector business leaders –community groups

Clinton Continuity 6 Cities were selected: –Atlanta –Baltimore –Chicago –Detroit –New York –Philadelphia/Camden

Clinton Continuity Los Angeles and Cleveland were “supplemental zones” In total, 31 cities selected, 74 distressed areas (including 33 in rural areas) Funding: $3.8 billion over 10 year period to be spread over 105 urban and rural areas –total annual budget is in the $1 trillion range

Clinton Continuity Personal Responsibility Act (1996) –64% cut in welfare spending from 1990 to 1998

W in the City Republicans and their contituency Shifting populations Declining influence of cities in national politics