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Gridlock stalls aid for cities as key programs are set to expire.

Differences between the White House and Congress continued to hold hostage emergency summer youth job and economic assistance to cities, and extension of key expiring municipal tax programs last week.

The lengthening stalemate in Washington virtually guaranteed that no program will be in place in time to provide summer jobs before schools let out in communities across the country and increased the chances that the authority of cities to issue mortgage revenue and small issue industrial development bonds will expire on June 30 before legislation to extend that authority is signed into law.

The action came as the administration threatened to veto the House-Senate agreement on the emergency supplemental spending bill to help Los Angeles, Chicago, and all other cities, and threatened to veto legislation to extend expiring unemployment benefits. In response, House and Senate Democratic leaders have indicated they are unlikely to take up consideration of the administration's enterprise zone proposals until resolution is reached on the short term, emergency aid.

Efforts to break the stalemate could come as early as Tuesday, however. The House is tentatively scheduled to vote on the emergency spending conference report, and Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.) has tentatively scheduled action in his committee to extend the mortgage revenue, small issue idb, low income housing, and targeted jobs tax credit programs. But Bentsen indicated he would be unlikely to act on enterprise zone legislation until next month.

Bentsen's counterpart, House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.), has committed to act on enterprise zones before the July 4th recess. Rostenkowski has given no indication when his panel would take up the expiring municipal tax provisions.

In contrast to the delay for American communities, the House Foreign Relations Committee last week overwhelmingly approved and sent to the full House President Bush's $24 Russian bailout package. The action came with unusual speed on a voice vote, entirely bypassing the normal subcommittee consideration and procedures.

The White House has continued to press Congress to complete approval of the package prior to Boris Yeltsin's visit to the White House this week, but House and Senate leaders have indicated they are unlikely to bring the package up in either House until agreement is reached on both a short and longer term package for American communities.

Emergency City Aid

House and Senate conferees to the emergency supplemental appropriations bill reached agreement June 5 on emergency funding for summer youth unemployment, summer school, anti-drug, and Head Start funding to communities. The nearly $2 billion spending bill would provide $675 million for summer youth employment programs; $250 million each for Headstart, summer school and the President's Weed and Seed program; and $492 million for emergency assistance to families and businesses in Los Angeles and Chicago.

The administration strongly objected to providing any more than $500 million in summer youth unemployment programs and the Chicago and LA funding, stating that any funds in excess of that "could not be used efficiently" by cities and towns. The administration also had expressed concerns, as had House conferees, to Senate targeting without regard to need, of a significant portion of the $675 million to the 75 largest cities. The conference agreement would require the funds to be dispersed to cities according to need rather than size under the current formula.

In the face of administration opposition to the conference agreement, both the House and Senate leadership and the White House have continued closed door negotiations. Democratic leaders have indicated that if the President does veto the agreement, they would consider attaching it to any enterprise zone legislation taken up later this month or next month.

The outlook on key tax issues affecting cities and towns remained unclear last week. On Thursday, the Senate Finance Committee reported out its $5.4 billion version of the expiring unemployment benefits legislation, and announced it would take up all 12 expiring tax programs tomorrow as a separate tax bill.

Key tax aides indicated it appeared all expiring provisions were likely to be extended, but guessed the extensions could be anywhere from 8 to 30 months.

With so little legislative time left in this Congress, many doubted Congress and the administration could agree on three separate tax bills.
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Author:Shafroth, Frank
Publication:Nation's Cities Weekly
Date:Jun 15, 1992
Previous Article:House cuts defense, pushes aid for cities.
Next Article:Balanced budget amendment fails in House vote.

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