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