THE WHITE HOUSE

Office of the Press Secretary

                       REMARKS BY THE PRESIDENT
                     IN TELEPHONE CALL CONCERNING
                           ENTERPRISE ZONES

The Oval Office

10:30 A.M. EDT

THE PRESIDENT: We've got L.A., Kentucky, Chicago, Baltimore, York, and New York.

Q Sounds like a good line-up.

THE PRESIDENT: Sounds like a good line-up to me. I want to thank you all for joining me today. As you know, I have a new proposal we're going to be discussing this morning that I believe is a fundamental departure from traditional programs offered by Democratic administrations and fundamentally different from the previous enterprise zone proposals offered by recent Republican administrations.

All of you represent areas of the country that, while unique, are each joined together by a common need. The economic potential of your areas, like other urban and rural communities, is still stifled because you lack the investment capital you need and a comprehensive strategy for jobs and growth. What we want to do is to help you to revive your communities economically. And our proposals for empowerment zones and enterprise neighborhoods we believe is the right way to begin.

Federal aid to these areas is certainly not new, but in the past it hasn't always worked. There has often been no coordinated strategy for using the federal money. Your growth has been restrained by a maze of federal regulations and the need to appeal to an array of federal agencies. And these factors have contributed to an unwillingness on the part of too many companies to invest in your areas.

We're trying to change all of that. We begin with a challenge: Under our program not a single dollar will go out without a coordinated strategy developed at the grass-roots level. Yet your communities enjoy immense and committed talent at that level. Our plan proposes a partnership between local organizations so that they can coordinate the use of federal, state, and local resources.

I know that your areas need investment capital, both public and private. Our proposal provides targeted investment incentives to draw investment dollars into distressed urban and rural communities. Your areas deal with a confusing maze of agencies and regulations. This proposal features a single point of contact so that the federal government contributes to rather than stifles the rebirth of your communities. We're going to streamline regulations, rules, and paperwork so that we reward initiative at the local level.

These are innovations and new approaches. They're going to result in new economic growth, opportunity and hope in areas long denied their piece of the American Dream. And just as your local communities will have a chance to participate in the planning of their economic revival, we also want to offer you a chance now to discuss the economic challenges you face -- to discuss this new effort to participate in the revival of your communities.

I just want to emphasize two or three things here. First of all, we do propose to do something that I discussed with the mayors a few months ago, or several weeks ago, and that is to focus the limited money we have to spend here in terms of tax incentives and investments on, first of all, ten empowerment zones that will get an enormous amount of concentrated effort to see if it works -- a wage credit, credits for equipment, credits for rehabilitating existing housing -- with a bottom-up community-based strategy, and with a lot of waiver authority. We're going to set up an enterprise board that will provide communities the opportunity to come and get waivers from all these federal rules and regulations. I think that's very important.

In addition to that, we're going to have 100 more enterprise communities that will be targets for our other community investments, like the federal funds we're going to spend on setting up community policing to make the streets safer, the initiative we're going to have in community development banks, and any number of other initiatives we're going to have coming out of this government. Those 100 communities will be target areas for getting first crack at them.

So I think that this is the sort of thing that will really support what a lot of you have been doing for a long time -- cutting out a lot of the federal rules and regulations, letting you consolidate the funds that you're getting from these different government agencies and getting you the chance to develop a plan to develop your communities.

I know it's consistent with what I always thought ought to be done when I was a Governor, and I think it will meet with a lot of support out in the country among Republicans and Democrats, and I hope we'll get that kind of bipartisan support here in the Congress. I think there's a good chance that we will.

Well, I've already said a little more than I meant to. I'd like to now go to our cities and hear from them one at a time, and of course, the state of Kentucky, too. But let's begin with Los Angeles.

Mayor Bradley?

MAYOR BRADLEY: Mr. President, I'm pleased to join my colleagues in this communication with you. I congratulate you on an innovative plan that deals with the depressed cities and towns of America. I'm pleased that you've recognized that a comprehensive, yet innovative approach must be taken. It takes not only tax incentives grants, but it also takes the kind of neighborhood involvement that will make this plan truly a product of the communities that are going to be served.

I believe that it offers a great opportunity for us to show that America can work, and the cities and the towns are the heart of what happens in this country.

We have two organizations in our city that are represented here at this table with me, and I'm going to ask representatives from each of them to speak to you now. Brenda Shockley represents Community Build; and Tony Salazar represents R-LA, a product of the Rebuild LA program. Let me call on Brenda Shockley first.

MS. SHOCKLEY: Good morning, Mr. President.

THE PRESIDENT: Good morning, Brenda.

MS. SHOCKLEY: On behalf of Community Build, I'd like to commend the administration on continuing its promise to put people first. Community Build believes that the empowerment zones legislation will -- particularly the aspect of it that recognizes that community-based, community-initiated, bottom-up involvement is critical to the success of efforts particularly in the urban areas.

We'd also like to state that your appreciation, that of the administration, and the recognition of the importance of support such as child care and job training to programs that are going to allow people to have the first step of employability will be very successful and that they will foster self-help, hard work and social responsibility.

Finally, the need for federal streamlining formalized in the form of the enterprise board will, I believe, allow for coordinated efforts and the more flexible use of existing federal funds is also critical to our efforts. Thank you.

MAYOR BRADLEY: Thank you. Tony Salazar.

MR. SALAZAR: Good morning, Mr. President. And thank you very much for your leadership in bringing this initiative to the forefront. It is very much needed. The needs of the people in our cities need to be addressed. We at Rebuild L.A. look forward to your partnership and working with you and other federal agencies in coordinating our efforts and getting agencies and federal funds back to the neighborhoods and to small businesses in our city. And we very much want to thank you for being a player and we look forward to seeing you here in Los Angeles. Thank you.

MAYOR BRADLEY: Mr. President, although he's not going to speak, he will talk to the press when we finish. Parker Anderson, who is our staff person, the head of our Community Development Department, also joins us here at the table. All of us thank you. I believe that you have heard the representative voices of Los Angeles. We're eager to work with you to see that this plan not only passes through the Congress, but is implemented.

Thank you very much, Mr. President.

THE PRESIDENT: Thank you, Tom. And I want to thank Brenda and Tony for what they said. And I want to just emphasize that I think we've got the proper division of labor here. At the community level, you've got to provide for people who are chronically unemployed job training, child care, and other supports. But those needs and the opportunity to meet them are going to be so different from community to community. And that's why I think it's so important that what we do here in terms not only of new investment, but in letting you spend the money that is presently appropriated in the most flexible way will guarantee that that can be done.

And then the other thing that I want to say, particularly in response to what Tony said with the Rebuild L.A. effort, we can't expect, it seems to me, a lot of new investment in a lot of our difficult areas until we do a couple of things that send the right signals to the private sector, which this plan does.

First of all, that we appreciate the people who are there now and we recognize that they have a potential to expand employment in distressed communities. And we ought to take care of the people that are there now.

And secondly, that the government needs to take the lead in offering some significant tax incentives to people who will take an additional risk to try to give people a chance who haven't had a chance in a long time.

And so those are the things that are part of this program. I'm very excited about it, and I'm glad you're so well organized to try to take advantage of it.

Let's go on now to Governor Jones in Kentucky. We asked the Governor to join us, because we wanted to emphasize that rural areas will be eligible to participate in both the empowerment zones and in the enterprise areas. And I know that Kentucky, like my home state, has a lot of very poor rural communities, and I wanted Governor Jones to have a chance to comment on this.

Governor, can you hear us?

GOVERNOR JONES: Good morning, again, Mr. President. I would like to, once again, thank you for having the courage to address another very, very significant problem. One thing you've shown so far is that you have no lack of courage when it comes to tackling the tough issues. And as everybody knows, when you're out on the front line attacking these issues, you take some shots. But, boy, are we proud of the way you're standing up for these tough, difficult issues.

I know the other Presidents in the past have promised federal participation in what used to be called enterprise zone legislation, and now the empowerment zone approach to dealing with our problems in depressed areas, both in the cities and in the rural areas. And we in Kentucky, of course, have had a lot of opportunity to deal with this. We passed legislation in 1982 when we became the third state in America to deal with the enterprise zone legislation. And we have had a great deal of success in dealing with it since that period of time. So we know absolutely without question that it does work.

I very much am excited about the focus that you have placed, which I think is very, very appropriate, as you've talked about change in the way government operates. And, heaven knows, we need to change the way government operates, both at the federal level and at the state and local level. I think your focus on human capital development is right on target. Streamlining the regulations, the rules, and the paperwork that have been strangling all of us for far too long is right on target. Stressing self-help and hard work and social responsibility, so that our people are willing to work in Kentucky. Our people are willing to stand up and be counted and to do what needs to be done in order to get a job and to get an education. And your willingness to let the federal government now play a meaningful role in this regard is extremely helpful to all of us.

I would also say that as we put the focus on sustainable growth, that we in Kentucky are having a national conference May the 25th to the 28th that we call From Rio To The Capitals -- the state strategies for sustainable development, a follow-up from what happened in Rio, which I think fits exactly in what you're talking about here -- in how the federal government, the state government and local governments can work together to provide the jobs and to provide the sustainable development that we need.

But because of the activity that we've had in the past working with enterprise zones or empowerment zones, we know it works and we're ready to stand with you and to participate in every way possible.

THE PRESIDENT: Well, thank you very much. I'd just like to make a couple of comments about what you said. First of all, most of our listeners may know, but some may not, that you had a very distinguished career in business before you became the Governor of Kentucky -- or got into Kentucky politics.

One of the things that I think all of us have noticed who have been governors or mayors is that an enormous amount of the money that's appropriated for special programs is often peeled off before it finally gets to its ultimate purpose by all the various administrative layers and regulatory requirements -- they're are on the money. And one of the things that we're trying to do here by setting up this enterprise board and giving people the chance to come up with plans that would put a lot of these funds together is to make the money go a lot further. And it dovetails very well with what the Vice President is trying to do and to look -- in looking at the whole structure of the federal government and how we can overhaul it.

And we're up here now trying to cut spending dramatically and find some money to increase targeted investments in areas where we need it to create jobs and improve education and explore new technologies. And I am convinced that one of the ways we're going to be able to both cut the spending programs that ought to be cut and increase investment is to get rid of a lot of the layers of regulation and management that we've had.

The second point I want to make is about your conference coming up in May on sustainable development. One of our great challenges is to try to figure out how to improve the environment and improve the economy at the same time. And one of the clear areas of opportunity there that no one disagrees with is in the area of environmental cleanup in some of our most distressed urban and rural communities. And so I would hope that all the people on this telephone call today, as well as all the people who will hear about this program and will file applications will look very closely at some of the environmental problems in their communities and at how many people can be put to work in cleaning those up and how that can be a part of the enterprise proposal, because that's clearly something that we need to do.

Let's go on to Chicago now. Mayor Daley is in Washington today, isn't he?

MS. JARRETT: Yes, he's on an airplane right now coming to Washington. I'm Valerie Jarrett, Mr. President, the Commissioner of Planning and Development for the City of Chicago. And your new initiative is exactly what we need here in Chicago.

Our city is a city of diverse neighborhoods, each with a unique set of needs. Solutions to our complicated problems do not fit neatly into the often hundreds of disconnected federal, state and local regulations. Instead of forcing communities to take on the impossible task of tailoring real needs to the requirements of these inflexible federal regulations, you are offering communities the opportunity to use these dollars creatively and holistically, to maximize the chances of sustained community revitalization.

Last year in Chicago we adopted a holistic communitydriven approach to planning and development, and already we have seen great success. In our new initiative it allows community groups to submit applications for the use of funds from four different city departments. Once we target an area, all of the other city departments work together in a coordinated delivery of services within the area.

One of our neighborhoods on Chicago's west side we've already begun to see new affordable housing, the revitalization of a commercial strip, a new library, a new park, street resurfacing and the demolition of abandoned buildings.

Unfortunately, however, Mr. President, our source of funds for this project frequently come from the federal government. If we could streamline these dollars with greater flexibility, we could speed up the revitalization of this area dramatically. We have strong community-based plans here in Chicago that will create jobs and stabilize our communities. These plans often collapse under the weight of government regulation and red tape. Your new initiative is exactly what we want to see.

I'd like to introduce to you, Mr. President, now Ted Wysocki. He is the executive director of CANDO here in Chicago, the Chicago Association of Neighborhood Development Organizations.

MR. WYSOCKI: Good morning, Mr. President.

THE PRESIDENT: Good morning, Ted.

MR. WYSOCKI: We welcome empowerment zones as a dramatic new direction by the federal government to encourage local collaboration. It's a perfect fit here with our efforts. Yesterday, Mr. President, over 600 of Chicago's most committed nonprofit groups, foundations and government officials assembled as the Chicago initiative to discuss not only youth programming for this summer, but also year-round gang intervention and job initiatives as well as multiyear processes for engaging communities in planning their own future.

I would respectfully offer three ideas that could assist the implementation of these ten empowerment zones and the 100 enterprise neighborhoods you're discussing. First, for industrial development, an issue of prime concern here in Chicago, funding as proposed by Senator Riegle in the Abandoned Land Reuse Act, on which I'm actually testifying tomorrow before the Senate Banking Committee -- this would create a new HUD program to address the high cost of cleaning up these sites that you were just mentioning.

Second, on the tax credit side, I think the real issue will be to attract equity financing for economic development real estate in these communities. I think that kind of a tax credit could encourage corporations to partner with communities, as well as, most importantly, small business to build in these zones and neighborhoods that you're talking about.

Finally, I think the role of community development corporations can be enhanced through the National Community Economic Partnership Act, which would provide grants for these local groups and their projects in these communities.

Mr. President, on behalf of Chicago's communities, I would like to thank you for your vision and your leadership. You are bringing hope to our neighborhoods.

THE PRESIDENT: Thank you, Ted, and thank you, Valerie. Let me just respond to one or two of the things that you said. First of all, the comment Valerie made about diverse neighborhoods is clearly true. I have walked the streets in every community represented on this phone call today. And I remember being so impressed in Chicago more than a year ago at seeing some new housing construction in one of the Hispanic neighborhoods from a community group that was the lowest-cost, highest-efficiency housing I had ever seen in an urban area. And there are a lot of these things going on in our country today which need to be supported not by uniform federal programs.

Secondly, I want to say that Mayor Daley was the first big-city mayor to tell me, again more than a year ago, that an enormous amount of money being appropriated by the Congress was not being well spent because of all the rules and regulations, and that we needed to focus first on getting more buying for the present dollar we're getting. And he cited me, chapter and verse, some of the things that you've mentioned today.

Secondly, I want to say to Ted, I think we have got in our economic program and in this proposal significant incentives from our equity financing for economic development. But I will look a the Community Economic Partnership Act, and I do agree that we need to be actively involved in the cleanup of some of these sites that we can restore to industrial development in a lot of our urban areas if we can solve the environmental problems.

I see this as a really big job-generator for America over the next few years, and it's a big problem just trying to find work for all of the people who want to go to work now in our country; it's a big problem worldwide. And the environmental cleanup and rehabilitation of a lot of these abandoned areas in our urban cities and in some of our small towns and rural areas, too, I think is very, very important. I thank you for that.

Let's go on to Baltimore now. Mayor?

MAYOR SCHMOKE: Yes, sir. Good morning.

THE PRESIDENT: Are you really at the Park Sausage Company?

MAYOR SCHMOKE: Absolutely. And Ray Haysbert, the Chairman of Park Sausage, is sitting right here next to me.

THE PRESIDENT: I want you to send me some. (Laughter.) I admit that I am hereby asking for my own pork. (Laughter.) I plead guilty.

MAYOR SCHMOKE: Absolutely. Well, I'll put Mr. Haysbert on in just a second. I want to thank you very much for this tremendous proposal that you have made. You continue to operate in a fashion that's consistent with your view that cities should be viewed as centers for expanding opportunity, whereas, many of the national leaders and certainly some on the other party simply view cities as massive shelters for the poor.

But I'm also here with a gentleman named John Clinton, who is the head of the merchants association in the Park Heights community, a community that you didn't get to walk through, but one that has been plagued by a lot of the disadvantages that I know you would like to correct. But Mr. Clinton is a barber, the head of the merchant's association, a strong community activist. And he's joined by Jim Marsalak, the Executive Director of the Northwest Baltimore Community Corporation.

I want to thank you, particularly, for your focus on -- of these waiver authorities and giving us flexibility at the local level. Because, as you've seen in walking through Sandtown, Winchester neighborhoods in Baltimore, we have a lot of people who are ready and willing with great ideas at the local level. They simply need some assistance from friends at the federal government. And the Sandtown area, in particular, we have new housing, health programs, social services and things of that nature, but a missing element has been a comprehensive job development program supported by a partner at the federal level. And, certainly, the empowerment zone and the enterprise neighborhoods would help neighborhoods like that.

I want to mention one other point. As you probably know, a number of mayors, a few of us are meeting this afternoon with the Attorney General, Ms. Reno. That, I think, is important, and we hope that the Justice Department is included in this comprehensive strategy. Because we are fighting on two fronts: we're fighting the problem of crime, and we're also fighting the perception by some that our cities are just completely crime-ridden. So we need the Justice Department involved, because we know that community development and community policing go hand-in-hand, and can produce some great results. And we look forward to talking to the Attorney General about that.

Let me just turn this over to Mr. Haysbert. I think he's agreed to the sausage, and he has some other points, because his company now sits in an area that I think is a real model for what you have talked about, and it's been very successful.

Mr. Haysbert?

MR. HAYSBERT: Good morning, Mr. President.

THE PRESIDENT: Good morning.

MR. HAYSBERT: The samples are on their way. (Laughter.)

THE PRESIDENT: Thank you.

MR. HAYSBERT: We came from what was the parking lot of the Orioles Park to this state-operated Park Circle enterprise zone. And, of course, some of the criticism has been that, as a stand-alone program, it doesn't provide the total solution for the problems if the inner city. So I am delighted to see that you are delivering a hope, a constant message, by your particular program.

I've always said that when you want to do something, that you've got to hit the minds and the hearts of the people in the community, so your bottom-up strategy, I feel, will be effective. I know that when we moved into this particular zone, the community had a celebration because of what it meant to them. Obviously, we couldn't hire over 120 people, but for the community, it meant that they were not abandoned, that they were not slated for the human scrap heap, that their potential as human capital was being recognized.

I know, it's a very important part of this entire strategy and your ability to restructure government, do away with some of the handicaps that beset us businessmen, is certainly appreciated. Thank you.

THE PRESIDENT: Thank you, Raymond. I've been very impressed with the work that the Baltimore Economic Development Corporation has done there. And I know you've had a lot of attention to the work that's been done there over the last few years. It's evidence that you can take a -- if you've got some committed people and some land and some physical structures that you can really do things to put people to work back in cities and in areas where others have given up.

I think that all anybody has to do is go out there and see -- I think you've got, my staff has said, about 1,400 people working in the industrial park now, and all the different businesses generating taxes, attracting private investment. That's the sort of thing we're going to have to do. The government doesn't have enough money to solve this problem. We've got to leverage what resources we have to get private sector people like you to come in and put folks to work. And I really thank you on that.

And, Mayor Schmoke, I should have depended on you as an old prosecutor to mention the Justice Department, but I want to assure you that the Justice Department is an integral part of this project. These cities, both the empowerment zones and the enterprise cities, will be considered for priorities for community policing, for alternative punishments, for institutions like the drug court which Janet Reno helped to set up in Miami -- all things which really help communities become safer and handle their crime and drug problems better, as well as for community development banks and some of the initiatives that we're going to have to try to bring capital into these areas.

But the Justice Department will be a big part of that. And she's very excited about it. You'll be able to talk to her about it today. But we think there are a lot of things the Justice Department can do to make both the perception and the reality of safer streets and safer communities a big asset in developing the economy and putting people to work.

MAYOR SCHMOKE: Thanks, Mr. President.

THE PRESIDENT: York? Mayor Althaus, are you on the phone?

MAYOR ALTHAUS: I sure am, Mr. President.

THE PRESIDENT: My first -- the first night I spent on my bus trip was York, Pennsylvania.

MAYOR ALTHAUS: Oh, we remember that very well. It seems to me, Mr. President, that in this city which gave you such a warm welcome and a boost, that if anybody doubted it before, I hope they would not feel very vindicated in that welcome they gave you. Because I've been around this issue my whole 12 years in office, and I have to say that this is the best, most thoughtful, comprehensive enterprise or empowerment plan that's come out in all those years.

And I think it is that because it recognizes that the needs are more than just a few federal tax incentives, which was the proposal in years past. A new job is of no value if you have no day care. A job alone is of no value if you feel so unsafe you cannot leave your home, or if you don't have the transportation to get to it. It is the comprehensive nature that I think really makes this the very best program.

During the transition some of the members of the U.S. Conference of Mayors met with your people and what we urged was that there be a permeating sense of urban needs throughout the administration. And this is truly exactly that. It is the overarching interdepartmental nature of it that I think is so stunning.

Of course, any Cabinet that has got two mayors in it I think is a real plus. And I'm delighted today to deliver to you the endorsement and the very strong support of the United States Conference of Mayors for this. It is just a superb program.

With me are two individuals -- one of whom I'll ask to make a comment. But first there is a business leader named Robert Lucas, who owns Classic Caramel Company. Now, I have to tell you, Mr. President, he makes a candy -- I think he named it kind of as a joke -- it's called dork candy, but Henry Cisneros, I'm told, loves it. So after your pork we're going to send you some dork candy. (Laughter.)

THE PRESIDENT: Dork in Washington -- that's another word for -- they'll think I need that. (Laughter.)

MAYOR ALTHAUS: Well, maybe I'll send some up to the other end of Pennsylvania Avenue then. But Bob has stayed in the inner city. In the last three years his company has increased its hiring 65 percent. In partnership with the city, he has been rebuilding the housing around his factories simply because it is believed that it is neighborhood, too, and as the neighborhood goes, so goes his business.

The other gentleman is Bobby Simpson, is executive director of the Christmas Addicts Neighborhood Association. And his housing CDC has been rebuilding housing throughout our community through the neighborhood where I grew up, I have to say. But they've also been building lives, rebuilding lives through a sense of neighborhood responsibility. And he has been laboring in this neighborhood, our neighborhood, for over a decade, and he's been looking for a partner. The city's been there with him, but he's been looking for another partner, and I think he's found it now. And I want to ask Bob Simpson to comment.

MR. SIMPSON: Good morning, Mr. President.

THE PRESIDENT: Good morning, Bob.

MR. SIMPSON: I think like millions of other Americans, I want to, first of all, thank you for keeping your campaign promise to help the inner city. I think this program that you have is a very, very workable program. But I must tell you that we in York have somewhat of a jump-start on you.

We started a program similar to this about 10 years ago, and that was to get the local business and the local people involved with settling and resolving their own problems. And to a large degree, we've been very successful at that. We took a drug-ridden area over 10 years ago and turned 125 houses into decent, affordable houses. We took 785 unemployed and unemployable people and put them in jobs.

The crucial point that I'd like to make is on the day care. We have a day care center that we're very, very proud of where 90 percent of our day care kids are on honor rolls of their schools. The other point that I'd like to make that you had spoken to under your proposal is cutting the red tape. I think that is a key to any proposal that comes down, and that's a key to the success in the city of York. We got rid of the red tape, implemented the program from the grass-roots level. We've done a lot with little. And with think with your help, we can do much, much more. And I just again want to thank you, and I appreciate your effort and your commitment to the inner cities.

THE PRESIDENT: Thank you, Robert. You know, I think you might be able to be a model for what we're trying to do in some other cities. But I'm sure that this works.

A few years ago as Governor, I set up a program quite similar to this in our poorest counties. And I required all of them to come up with community-based development plans and then we worked hard to try to make sure all the resources of the state were put at their disposal. And we even got the federal agencies involved. But I always had the feeling that we could have done so much more if the federal government had been able to fully join our efforts. But I'm very impressed by what you've done there.

And I want to say a special word of thanks to you, Mayor Althaus. You know, we find, I think, that partisan differences tend to evaporate the further you get away from Washington. And when more people get down to the grass roots and have to face each other across the table and deal with real problems, it's obvious that there are certain things that work and certain things that don't, and people tend to work on what works.

And I can't tell you how much respect I have for the leadership you've given the U.S. Conference of Mayors and the willingness that you have expressed to work with us in trying to find American solutions to these problems. I am convinced that at the very basic human level we need to make a departure from the approaches of the past. And you've been willing to do that and I just -- I take my hat off to you. And I hope that we can do that more and more and more on all these problems, because a lot of these problems are America's problems and they don't have a partisan label after them. And I think if we'll just take -- all of us take our blinders off and roll our sleeves up, we'll get a lot further. And I really appreciate you.

Thank you.

MAYOR ALTHAUS: Mr. President, thank you. I have to say, the partisanship in Washington is not at your end of Pennsylvania Avenue right now. It's really not. It's been a joy working with you.

THE PRESIDENT: Thank you, Mayor.

New York?

MAYOR DINKINS: Yes, sir.

THE PRESIDENT: Hello, Mayor.

MAYOR DINKINS: Mr. President, I have several people with me, one of whom I'll ask to say a comment in a minute. I have Ron Shelp, who is the President and Chief Executive Officer of the New York City Partnership and the New York City Chamber of Commerce in Industry. The Partnership was founded back in '79 by David Rockefeller and other business leaders to tap the energy of the business community on a range of public policy issues, including economic development and affordable housing and education and jobs. And we worked very closely together. They've been with us on international trips as well as demonstrating a lot of concern for local problems.

There's David Jones, who is the President and Chief Executive Officer of the Community Service Society, one of the oldest community development agencies in our city. Comprehensive in its programmatic thrust, CSS, as we call it, provides direct services to underserved communities and is a formidable advocate for progressive social policies at both state, city, and federal levels, and provides technical assistance to grass-roots neighborhood organizations. I'll ask David to say a word in a minute.

I would want you to know that in the room also are a couple of my deputy mayors, Barry Sullivan, a lifelong banker who, upon his retirement, we induced to come and work for us as a deputy mayor for finance and economic development. And our newest deputy mayor, Dr. Joyce Brown, who is an educator of some 25 years' experience who is now deputy mayor for policy and community affairs. So I'm pleased that they're here.

Mr. President, I want to commend you, as my colleagues before me have done, for what I think is very creative leadership, so sorely lacking in Washington over the last dozen years. And we in New York City really know. We have suffered greatly because of the abandonment of the urban centers by Washington heretofore.

I want to say that not only are you providing greater leadership, but you've put together a great team. Bob Rubin has been enormously responsive and receptive to our efforts, and Henry Cisneros -- you've got a mayor, so you know that you're doing real well there. And you've got a good New Yorker in Andrew Cuomo. And, of course, Donna Shalala. And so I am confident that you've got the kinds of people to put this together.

And much has been said of community policing . And as perhaps -- I know you know that the foremost proponent of community policing, perhaps the expert in the nation, is Dr. Lee Patrick Brown that you've now tapped to head up your drug effort. And he is somebody who understands full well that it's not just law enforcement, but treatment and education that have to go along with it. So I'm delighted with this new important initiative. As you know, my colleague, who is the dean and delegate of the New York state congressional delegation is very interested in this area and I know is working closely with you. I make reference to Congressman Charles Rangel.

We've got in our city some initiatives that we think fit very well with the kinds of things you're talking about. One is what we call Communicare. We take health clinics and make primary care centers of them. It provides not only better care, but at a lesser cost. We've got what we call beacon schools, where we take the school buildings that are there anyhow, and now we keep them open until 11:00 p.m. or 12:00 p.m. at night, six and seven days a week, with programs for young people and adults, funded by the city but run by not-for-profit community organizations.

We're very proud of our community policing. As your new Attorney General will tell you, the FBI reports that crime is down in the seven major FBI index categories in New York for the first time in 36 years. And we attribute that to community policing that Lee Brown did for us.

We have what we call business improvement districts, where business people sort of tack themselves to the areas. We know that these kinds of things can assist what you're talking about, and I believe that your empowerment initiative is really what one might call the vanguard of an urban policy. And I think that if we make certain the specific menu of business incentives and social service programs are meaningful enough to do some good, we will be making giant steps.

I know you've permitted me to talk overly long, so I won't say more, except to say that we in the city of New York can provide a laboratory for any and all of these kinds of things that are at the forefront of this effort. I want to commend all of my colleagues that have participated in this effort and to thank you, Mr. President.

May I present now, David Jones of Community Service Society.

MR. JONES: Mr. President, nice talking to you once again. I just want to say a couple of things from the perspective of not-for-profits and community-based organizations. I think your bottom-up approach is brilliant, and I think it's what's going to be needed to bring this change about in these inner-city neighborhoods. I think you should also be aware, however, that community-based organizations have suffered along with the communities they have served. And they're going to need technical support and support from your government agencies to provide the kind of strategic planning that you envision in your plan, as well as the kind of oversight that you're talking about. But I think it will be seen as a great movement for community-based organizations and the poor people they're trying to serve.

I think, obviously, time is up with the national apprenticeship program and primary health care reform, patient reform and a new structure for voluntarism and a new approach to narcotics control are all going to be light-years ahead of anything that's come down in nearly a decade. And I hope because it's so new, that you, yourself, attempt to go into some of these communities to try to get your message across. Because I think I agree with Dr. Wilson, Julius Wilson, that we're losing working- and middle-class people from these communities, and they need a ray of hope in order to stay on and continue the fight, so these communities can revitalize themselves.

Thank you for the opportunity to make our comments here.

MAYOR DINKINS: Mr. President, thank you very much.

THE PRESIDENT: Thank you, Mayor, and thank you, David Jones.

Let me just comment first on what Mr. Jones said. I think we do have to provide some assistance to build up these community-based, nonprofit organizations. And I do think the national government has to take the lead in health care, in trying to put together the kind of system that will work on job training and apprenticeship programs, as well as trying to take a little different direction, as you know I feel we should, on the drug front. And that's one reason I asked Lee Brown to be the drug czar.

But I'm also convinced that if we do this, that building these things at the grass-roots level and having everything driven by that is the only way to ever get anything done, in my opinion. I think -- you know, we've got to help people to help themselves, and that's what this whole thing is about.

The other point I wanted to make in response to what you said, Mayor Dinkins, is, first of all, thank you for the compliments on the people in my administration. Andrew Cuomo had a lot to do with putting this initiative together, and he's sitting here in the Oval Office with me -- actually, he's standing in the back, so he grew about four inches when you were bragging on him in front of America.

MAYOR DINKINS: Very good.

THE PRESIDENT: And I thank you for that. And let me again once again emphasize that I am convinced that the experience of New York and community policing demonstrates beyond anything I could say that if we can put these programs in place in all the major neighborhoods of this country that have crime problems we would immediately make them, not only more liveable and more attractive, we would make them far more apt to get private investment.

This is a huge economic issue as well as a personal security issue. And that's why we've just got to wrap the Justice Department and crime control initiatives into this whole effort. If we don't do it we can't be successful in some areas and if we do, of course, the flip side is that we can.

I want to thank all of you so much for giving me a little of your time today and for your support of this initiative. I hope you'll talk to your colleagues across the country, to the members of Congress, and again reach out across party and other lines and say this is something that will be good for America. I need your help now to pass it and I'm ready to go to work to do that. Thank you very, very much.

MAYOR DINKINS: Thank you, Mr. President.

THE PRESIDENT: Good-bye.

Q Mr. President, now that you've had your -- what changes do you plan in the White House staff to make your administration more effective?

THE PRESIDENT: Keep in mind that, before you ask that question, this administration is the only one in 17 years to pass a budget resolution within the legal time limit. We have put -- nearly as I can tell, we have put more major initiatives out there in 100 days than any of my recent predecessors, and we're working on some very major problems. So I think, on balance, the staff has done a good job.

We've lost one initiative in the Congress that took way too long, dealing with a relatively small program to put some people to work. And I think we to -- what I think we need to do, frankly, is to get the focus back on the things that I have been working on from the beginning -- passing the major economic program, making sure the Congress will adopt the spending cuts, reaffirming that I have no interest in raising taxes until spending is cut, no tax increases without the spending cuts -- getting the budget program so that we can keep interest rates down.

I talked to more people today, just people around here -- I asked how many people have refinanced any housing loans or other loans that save money on that. That's going to be the biggest stimulus we can ever provide if we can keep the interest rates down with deficit reduction. And then going on to health care and passing these empowerment initiatives, that the one we're here talking about today.

So will we make any changes in the way our process works to try and improve it? I hope we can make some. We've got that under review. We've been discussing it for, oh, about five weeks now, what we can do to be more effective. After all, I just got here. I've never operated here before, and there are some things that are very different about the way Washington works -- some good and some not so good.

But I think we're on the right track, and I just want to focus now on the work before us, which is passing this budget. If we don't pass the final budget with the spending cuts and the revenue increases and keep them focused on the people who got all the benefits out of the '80s, having the upper-income people pay the vast bulk of the load, and not -- but not taxing them until the spending cuts were in place, that's what I think we have to do now. And that's what I'm focusing on.

Q Specifically, sir, will Mack McLarty be hiring a deputy to tighten things up in the operation?

THE PRESIDENT: One of the things that we've looked at -- keep in mind one of my first spending cuts was committing by the end of the next fiscal year to have a White House staff that was 25 percent smaller than my predecessor's. But when I got to looking at it, ever other chief of staff has always had basically three major -- the recent ones, at least have had three major aides, and Mack's been functioning with one. So I'm trying to figure out how to give him at least one more. He still wouldn't have as many -- if he had two instead of three, he wouldn't have as many as most of his predecessors have.

But we think that there needs to be a little tighter coordination here to make sure that we've got our priorities straight and that those priorities are communicated all the way down to the staff. And a little better focus.

One of the things that you risk when you try to get a lot of things going in a hurry -- and we tried to get a lot of things going in a hurry because four years passes in a hurry -- is that you wind up having people work very, very hard, but maybe getting a little out of focus. And I think we can tighten the focus a little, and I think that's what we ought to do.

Q Leading economic indicators are pretty grim. Do you think anything beyond what you've done -- the empowerment zones, the economic stimulus package -- has it got you thinking about either delaying the tax cuts further, or any other kind of emergency push at this point?

THE PRESIDENT: I'll answer the specific question first. The best thing we can do for the economy this year -- this year -- is to clearly pass a multiyear deficit reduction plan because of what it will do to interest rates. As Americans borrow money at lower rates or refinance their existing debt, that will put -- the economists estimate that over the next year and a half, that will put $110 billion back into this economy, if we can get the interest rates down. That's a huge stimulant to the economy, totally in private sector investment to refinancing debt.

So my present feeling is that we have got to pass the multiyear deficit reduction package, which requires the spending cuts first and the tax increases, focused on people who have basically benefited from the last 12 years of lower taxes. Now, I think we're going to have to -- we need to pass that, keep the interest rates down and see what happens.

What I tried to do was make a down payment on the jobs plan. And I still would say what I've been saying since -- well, all last year and even after the election, I tried to say that we were part of a global economy, where there was a lot of economic slowdown in Europe and elsewhere, and that people could not expect immediate results, and we were going to have to really focus on what it took to create jobs.

I will say that again: My major focus -- if I can pass the budget, then we will move on to health care and job creation. And I think that we may try a lot of things over the next four years because we're in a period of new and different economic forces, which are all working to make it more challenging for us to create large numbers of new jobs.

But I'm not at all surprised. I started saying back in November that there's too much recession in the rest of the economy, and we have cut defense spending in America without offsetting investments in our people and new jobs on the civilian front. And we were being burdened by enormous debt. But I can't tell you that I think we ought to come off the deficit reduction. I think bringing that deficit down and keeping interest rates down is the best investment program we've got right now.

But we are going to have to keep our ears and eyes open, because this is a new and difficult and unprecedented time, and we've got to put the work of the American people first. So I wouldn't rule out anything down the road, but I'm confident we need to pass the budget first.

Q Are there special forces in Bosnia on the ground?

THE PRESIDENT: There aren't any. I saw the report, Ron. I don't know what the basis of it is. I have not authorized that at all.

THE PRESS: Thank you.

END11:30 A.M. EDT