Rep. Watts takes a stand for low income communities

By Nicholas Sanchez
web posted May 1, 2000

Congressman J.C. Watts of Oklahoma, the House Republican Conference Chairman, has recently been championing a rather radical idea before the Congress: He would like to pass legislation that would help targeted low income communities receive tax cuts, regulatory relief, and home ownership opportunities. Rep. Watts also wants to see these lower income Americans begin savings accounts, because the surest way to climb out of poverty is to begin to save. The specific legislation that he is putting forth to help achieve all this is called "The American Community Renewal Act" (HR 815).

Specifically, this legislation would target areas that have a poverty rate of 20 per cent or more. And it would also make sure that at least 20 per cent of those communities that would be affected by this legislation would be in rural areas. While this legislation is not perfect, there are a lot of things in the bill that should make both economic and social conservatives cheer.

For economic conservatives, this legislation would eliminate the capital gains tax in these targeted areas. The Renewal Act would also give businesses located in these qualified areas a "wage credit" that would start at 15 per cent for hiring "qualified, low-income workers." (By the way, this credit would increase to at least 30 per cent for businesses that employ a worker for two or more years.)

Who can disagree with a plan that gives incentives to businesses to move into impoverished area and then cuts their taxes as they employ local members of the community? Who can oppose a plan that, with an ever increasing number of Americans going off the welfare rolls (7 million Americans thus far, and counting), rewards businesses that do not see high turnover rates in their workforce? One would have to be a pretty hard-bitten opponent of financial growth to oppose this plan.

As mentioned earlier, Rep. Watts and his co-sponsors (Reps. Jim Talent and Danny Davis in the House, and Senators Spencer Abraham and Joseph Lieberman in the Senate) also made sure that this bill did not only address economic matters. Economic prosperity in the midst of a moral vacuum is no move forward. The health of the culture in the community ultimately defines whether or not it is a successful community or not.

Unfortunately, we have seen that areas afflicted with poverty are all-too-often suffering from severe cultural degradation as well. Lower income areas are hotbeds of crime, prostitution, and violence. Inner city schools are run-over with drug pushers, and it is poor kids that suffer most. (Suburbanite kids that become drug users can always rely on mommy and daddy to send them to rehabilitation clinics.)

To address the drug problem in lower income areas, the Renewal Act amends the Health Service Act, thus allowing "faith-based substance abuse treatment centers . . . to receive federal assistance." This bill would make it easier for individuals who are already in some sort of federally funded drug treatment program to seek help with private and religious treatment centers.

Naturally, this bill has ruffled a few liberal feathers. Specifically, there are two provisions that many in the Congress are seeking to strike from the bill - the elimination of the capital gains for targeted areas and the faith-based drug rehabilitation provision. It seems that there are those in the Congress that want to eliminate any incentive for businesses to go into low-income areas. It seems that these same people in the Congress would rather that people stay on drugs. (It should be mentioned that there is a specific provision in this bill that would allow someone seeking drug rehabilitation to not have to go to a religiously oriented treatment center. Should they choose to, they could select a secular government run organization.)

To their credit, Congressman Watts et al. have been fighting for these key ingredients to this bill. In fact, they have plainly stated that if the capital gains elimination and the religious drug treatment center provisions are not in the bill, then it will not go forward. Their intractability in the matter has put President Bill Clinton in a tough position.

The days are winding down for the Clinton Administration. Congress is getting restless and there are only so many more days that they will be in session. Clinton wants to sign some sort of community renewal bill, and would be hard pressed to oppose any bill that comes on his desk. If the Republicans stick to their guns, and follow the lead of Congressman Watts, Clinton may just have to sign this bill, and help the poorest among us despite himself.

Nicholas Sanchez is director of Development at the Free Congress Foundation.

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