Brighter Hopes in Poverty Fight

There is some good news on the California poverty front. Census figures show that, after nine years of national economic growth, the Golden State is finally moving apace with the rest of the country in declining poverty levels. Moreover, a measure pending in Congress, the so-called Congressional Community Renewal bill (HR 4923), would help reduce poverty numbers even further by offering generous market incentives to stimulate economic activity in the poorest neighborhoods. That measure deserves quick passage.

A Census Bureau report published last week showed that California, hit harder and longer than other states in the recession of the early 1990s, is beginning to catch up. The poverty rate in 1998-99 dropped 1.4 percentage points to 14.6%, while inflation-adjusted median household income rose 3.1% in the same period, to $42,791. Forecasters say California’s economy will continue to grow and personal income will jump more than 10% this year.

The community renewal bill is a unique measure aimed at luring businesses into the poorest neighborhoods of inner cities through tax and regulatory incentives. Investors would pay no capital gains tax on the sale of assets held for more than five years, and businesses in such zones would qualify for a variety of tax credits and deductions.

Los Angeles, Santa Ana and San Diego are among the Southern California communities already benefiting from the “empowerment zone” program that the community renewal bill would expand and improve.

The measure sailed through the House last July on an overwhelming bipartisan vote but now is in danger of collapsing in the Senate under the weight of special-interest tax breaks. Dozens of amendments to the bill would add more than $20 billion in unrelated spending in tax-deductible savings for farmers, tax credits for small oil and gas producers and incentives for land conservation.

A procedural maneuver by Sen. William V. Roth Jr. (R-Del.) stripped many of the amendments from the bill and prevented it from getting bogged down in the Senate Finance Committee. It is now up to Senate Majority Leader Trent Lott (R-Miss.) to move the measure to the floor. It should not fall victim to last-minute congressional shenanigans.