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$43 billion economic 'jump-start' outlined in House.

Representative John Conyers (D-Mich.) announced a proposal last week to fund a $15 billion 'jump-start' to the national economy in the form of flexible grants to general purpose local governments for fiscal year 1993. This is part of Conyers' five year proposal to pump $43 billion directly into America's cities and towns by the end of FY97.

This proposal would be grafted onto the proposed, NLC-supported Local Partnership Act (H.R. 3601) Conyers introduced last year.

Conyers proposed using savings from cuts in defense spending to pay for the immediate injection of fiscal assistance directly to communities. Under the proposal, like revenue sharing, the federal assistance would be allocated directly to all units of local governments with broad flexibility to meet local needs, priorities, and unfunded federal mandates.

The revised Conyers proposal is similar to ideas under consideration in the Senate by Sen. James Sasser (D-Tenn.), chairman of the Senate Budget Committee, and Sen. Paul Sarbanes (D-Md.), chairman of the Joint Economic Committee.

Conyers, chairman of the House Government Operations Committee, whose committee has jurisdiction, announced that he has 40 cosponsors on his original proposal, including 18 of the 41 members of the Government Operations Committee.

Hearings on this matter will be held early in February, according to Conyers.

When the original proposal was introduced last year the recession was not at the serious stage that it is now and consensus on the size of defense cuts that might be achievable due to the changes in the world military situation had not been reached. The change in situation from last year to this year gave rise to Conyers plan to provide this up-front payment.

"Now is the time--timing is everything" in order "to help bring us out of the longest recession since the 1930s," Conyers said.

Program Outline

"Under my proposal, local governments will spend the $15 billion faster than the Pentagon would have; thereby, immediately creating jobs. The money will be spent in the areas of the country where unemployment is highest, and local governments will spend this additional money more productively than Washington. These 'federal partnership' payments will help local governments avoid tax increases in the midst of this recession, according to Conyers.

The level of funding to be provided annually under Conyers revised proposal would be $15 billion in FY93 (which begins October 1, 1992), $5 billion in FY94, $8 billion in FY95, $11 billion in FY96 and $14 billion in FY97.

All funds not spent by the local government within twelve months of receipt would have to be returned to the Federal Treasury. Funds would be required to be used in the areas of education, public safety, health, social services and environmental services. The funds would have to be used to rehire laid-off workers, restore services or expand services overburdened by the current recession.

In response to a question posed by Mayor Peggy Rubach of Mesa, Ariz. to Conyers at the Conference of Mayors meeting at which the proposal was announced, Conyers said, "we will make it clear so there is no doubt that infrastructure spending is eligible" under the program.

The funds would be allocated by a formulas giving heavy weight to local unemployment. Local tax effort (taxes in relation to local per capita income), population, per capita income, the extent of urbanization in the state, total taxes collected by the state and local governments in the state and total state and local income taxes collected within the state would be other factors in the formula.

With a funding level of $15 billion Detroit would receive about $185 million or $180 per resident, Los Angeles would receive $196 million or $56 per resident, Laredo, Tex. would receive about $400,000 or $3.25 per resident, Spokane, Wash. $10 million or $56 per capita, East Orange, N.J. $3 million or $41 per capita and New York City $800 million or $109 per capita. For specific information on your community you should call your Representative in House of Representatives and ask how much your city would receive under the revised Conyers Local Partnership Act of 1992 (HR 3601).

The proposal is to be financed by reductions in the defense budget. In order for this to occur the current firewalls erected by the budget summit agreement would have to be taken down by legislation (Conyers is advocating this legislation).

Additionally, the spending ceiling, also established by the budget summit agreement might have to evaded. This could be accomplished two different ways: through an emergency declaration by the Congress or if there are six straight months in which economic growth is less than 1 percent. In either case the ceiling is automatically voided.

If the defense money is drawn from weapons systems where the spending stretches out over many years and converted into a program where the funds are spent immediately, as in this proposal, the contention is that the amount of budget authority (spending power permitted by the budget) could remain the same and thus conform to the budget agreement's budget authority cap.
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Title Annotation:Representative John Conyers
Author:Peterson, Doug
Publication:Nation's Cities Weekly
Date:Jan 27, 1992
Previous Article:Take note of congressional calendar for '92.
Next Article:Senate leader Mitchell will address Congressional City Conference.

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