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Clinton urges Wall Street to invest in distressed areas
January 15, 1999
Web posted at: 10:40 AM EST (1540 GMT)
WASHINGTON (AP) -- President Clinton is challenging Wall Street to invest
in the underserved markets of America and ensure that the nation's
downtowns share the good economic times with impoverished inner-city and
"Help make sure no family is left behind," the president said Thursday in
taped greetings from the White House to Wall Street executives meeting in
Highlighting a section of his fiscal 2000 budget proposal, Clinton planned
Friday to unveil a bundle of tax incentives and loan guarantees designed to
attract venture capital to distressed areas from the barrios of Los Angeles
to the hamlets of Appalachia.
"As leaders of the companies of on the 'Big Board,' as the men and women
who have helped transform American into the world's economic superpower,
you must help build the bridge between those who work in our gleaming
office towers and those who live in their shadows," Clinton said.
With the Senate impeachment trial against him proceeding, Clinton was
addressing a conference on reinventing government at the State Department
this morning before leaving for New York.
There, he planned to unveil the new initiative at an economic conference
organized by Jesse Jackson's Wall Street Project, a coalition of executives
from top Wall Street firms and some of the biggest U.S. companies dedicated
to expanding business opportunities for minorities and women.
Clinton's plans to travel Thursday night and attend the project's gala
dinner were stymied by ice and snow on the East Coast. He was expected back
in Washington tonight to attend a Democratic fund-raiser.
The president's proposal was developed by an administration task force that
consulted with investment advisers and pioneers in community development as
well as members of Congress. In some ways it mirrored federal efforts to
boost struggling economies abroad.
"We need a domestic version of these vehicles," Jackson said. "Whether it's
the Ozarks, East L.A. or Harlem, there must be vehicles ... to transport
capital to people who need it."
The proposal would seek to stimulate billions of dollars in new private
capital investments, building a network of private investment institutions
to funnel credit and technical assistance to businesses in these
The details of the proposal include:
_A $1 billion tax credit designed to spur $6 billion in new equity capital
for investment in the targeted markets. The administration hopes the 25
percent credit will attract investors, who in turn could support small
technology companies, inner-city shopping centers, manufacturers, retail
stores and other businesses.
_The creation of new private investment partnerships to be known as
America's Private Investment Companies patterned after the Overseas Private
Investment Corp. APIC would make equity investments into larger businesses
that expand or relocate to inner cities or rural areas.
_Targeting of the SBA's Small Business Investment Program to low- and
moderate-income areas. This program provides equity and debt financing to
small companies that are looking to grow. America Online and Staples are
two examples of companies that have benefited from this program, but the
White House says it has been of little benefit to inner cities and rural
In addition, the SBA will authorize establishment of new markets venture
capital firms and approve non-bank lenders that will target their lending
to underserved areas.
The president's budget also will include seed money for BusinessLink, a
public-private partnership to demonstrate to large firms the business
benefits of developing small and minority business partners.
Copyright 1999 The Associated Press. All rights reserved.
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