Kemp's Urban Policy Said To Fall Short of Cities' Needs

THE sudden post-riot scramble for urban policy has handed Jack Kemp and his "empowerment" agenda a political moment, and he is attempting to parlay it into policy action.

But for all Mr. Kemp's personal credibility, his policy proposals inspire little confidence as significant antipoverty measures, even from those who appreciate his philosophy.

Within the Bush administration, the Housing and Urban Development secretary is the only prominent member who has established a primary, longstanding interest in the problems of the urban poor.

Liberals give him enormous credit for his good faith and activism, as do conservatives for his pro-growth principles.

He has helped lead an effort in the past week - along with others such as Sens. Bill Bradley (D) of New Jersey and John Danforth (R) of Missouri - to overcome partisan and ideological differences in Washington to take legislative action. He is almost evangelical in his optimism that riot shock can be converted into the will to act.

"I think we've got a window of about a month to two months," he said at a Monitor breakfast on Friday. Once the party conventions take place this July and August, the window will be closed, he says.

Kemp has been a maverick in the Bush administration, nearly breaking with the White House at various points in the past three years over taxes and economic policy. He was promoting a full-scale war on poverty, based on conservative principles, nearly two years ago.

Key members of the White House staff have steadfastly resisted any serious investment in Kemp's agenda - until the Los Angeles rioting occurred. President Bush has officially endorsed Kemp's agenda for years but has offered little resistance when Congress has trimmed it out of his budgets. At the center of Kemp's program are enterprise zones, which attempt to draw business and jobs into blighted neighborhoods by eliminating capital-gains taxes.

The wave of free-enterprise revolutions around the world, Kemp says, will be a lost opportunity in the US "if we don't do something to double or triple the number of minority-owned enterprises."

One enterprise zone that now is a hive of economic activity is Park Circle, a decade-old effort that is using state tax incentives in Baltimore. About 1,500 jobs have been brought to what was about 40 acres of economic desolation.

But several deals were struck to lure companies into Park Circle. David Gillece, who negotiated many of them as former president of Baltimore Economic Development Corporation, says he believes the enterprise-zone tax incentives were not a driving factor in any of the arrangements.

"I'm not satisfied that tax incentives are ever enough to get companies to relocate into distressed areas," he says.

Like many people who have worked on urban-development problems, he says the enterprise-zone concept is sound, but only as a fairly minor plank in a larger platform.

One limitation of enterprise zones, notes Mr. Gillece, now an economic development consultant, is that even if they draw investment into a distressed neighborhood, the people in the neighborhood may not benefit. Companies moving into the zone often come from nearby and already have a work force. Others are unionized, which limits whom they can hire. Even if those hurdles are surmounted, a large proportion of local youths cannot pass drug tests, do not meet literacy requirements, or have prison records.

"Even if enterprise zones are a piece of the puzzle," says Mark Greenberg, senior attorney of the Center for Law and Social Policy, "there are a lot of pieces missing."

TO Kemp, inner cities are virtual socialist economies, where the poor do not lack character but live in a world of perverse incentives built by the welfare system. And they are starved for capital and the enterprise that grows from ownership.

Another major plank in his platform for empowering the poor is promoting homeownership in inner cities by shifting public-housing units to the ownership of the occupants. "Growing up as a black man or woman in America means a lot of discrimination not just in getting jobs, but in getting capital, credit, oxygen to their communities," he says, noting that blacks own only one-half of 1 percent of the nation's total private assets.

Few disagree with Kemp on these points. But equally few see Kemp's program - which has become the longer-term Bush program - dealing with the problems he outlines.

"I think he's on the edge of the kind of synthesis this country needs," Gillece says. "But it doesn't add up to a program."

No one else has put up credible, long-term answers either, at least at a level where they stand a chance of becoming law. "I don't consider what I've seen to date meaningful action," says Jack Meyer, president of New Directions for Policy, which studies social programs around the country.