Conservatives Opposing Urban Aid Plans : Cities: Orange County congressmen call for tax-free ‘enterprise zones’ instead of infusions of government funds for social programs and riot recovery.

As Congress heads for a showdown over big-ticket relief packages for riot-torn Los Angeles and other cities, Orange County representatives are taking a stand against spending hundreds of millions of new dollars on urban problems.

Instead, the conservative delegation is rallying behind legislation proposed by Rep. Christopher Cox (R-Newport Beach) that would eliminate for five years virtually all business taxes, including income and payroll levies, in the most devastated parts of Los Angeles. The program would stop at the city line.

“The best you can expect from pumping hundreds of millions of dollars into the inner city is simply rebuilding the status quo of what was, and that’s not good enough,” said Rep. Dana Rohrabacher (R-Huntington Beach), who opposes more money for urban social programs, but strongly supports the Cox plan.

Earlier this week, President Bush proposed legislation to create so-called urban “enterprise zones” throughout the country. The tax advantages offered under the Bush plan are less generous than those proposed by Cox, but because the Bush proposal could include any major city that meets standards for unemployment and poverty, its cost has been estimated as high as $2.3 billion. The Los Angeles-specific Cox plan carries no official price tag.

The House last month passed a $495-million package of emergency loans and disaster relief earmarked largely for Los Angeles and Chicago, a plan strongly opposed by the Orange County representatives in Congress. The Senate added $1.5 billion to the House legislation. The extra money would pay for summer jobs and school and neighborhood programs.

Negotiators for the House and Senate are expected to work out a compromise sometime this month. It must then be approved by each branch of Congress. The Cox and Bush tax incentive plans, as well as other proposals for inner-city aid, are to be considered separately.

Critics suggest that Cox and other conservatives, many of whom represent suburban districts whose residents fled troubled cities years ago, are part of a club of suburban Republicans who have long neglected the troubles of urban America.

The Republican notion that federal social programs just don’t work in inner cities “is an ideological answer in search of a premise,” said Bob Brauer, special counsel to Rep. Ronald V. Dellums (D-Berkeley), one of the most liberal members of the House and a strong supporter of aid for the cities.

Tax incentives for businesses are fine, said Rep. Maxine Waters (D-Los Angeles), who represents a riot-stricken area, but she said Congress must do much more--creating paid job training programs, for example--to address the problems that spawned the riots.

“I’m going to fight very hard to keep an enterprise zone from being a conservative-constructed vehicle by which you help business . . . (but) don’t do anything for the people,” Waters said.

Cox and his supporters maintain that enterprise zones and other conservative proposals would do more in a few years to revitalize decaying urban centers and the people who live there than a host of federal social programs have accomplished in decades.

“The question ought not to be whether we care . . . it ought not to be whether we’re prepared to go in and prove it, fix it up and offer people opportunities, it ought to be how do we do it,” Cox said.

“If all you want to do is redistribute wealth, we can do that for a time until we run out. The task, however, should be creating wealth,” the congressman added. The answer, he said, is passage of his enterprise zone legislation.

Under the Cox legislation, Los Angeles city officials would define the enterprise zone by “green-lining” the areas hit hardest by the riots. Within the zone, the Cox plan would eliminate all federal taxes on businesses.

The tax plan would not become effective unless the city and county of Los Angeles and the state of California eliminated their own taxes on business sales, property and income. No business would be eligible for the tax benefits unless 90% of its employees lived within the zone.

Among the original co-sponsors of the Cox bill is Rep. Craig Washington (D-Tex.), an outspoken liberal.

“By offering such striking incentives for capital to locate within the (enterprise zone) we can realistically expect that enormous economic activity will occur in this area within the five-year period,” Cox wrote in a letter to his House colleagues.

Cox and Rohrabacher were two of the three members of the conservative Orange County congressional delegation who voted against the relief package for Los Angeles and Chicago, which was hit by a devastating downtown flood. It passed the House on May 14 by a much narrower margin than expected.

Also voting against the package was Rep. Robert K. Dornan (R-Garden Grove), who said, “It was the toughest vote I’ve ever cast here, but it was the right vote. I’m not just going to throw money at this problem, because I watched us throw money at Watts.”

Despite the dissent from the Orange County delegation, the House approved the $494.7-million aid package by a vote of 244 to 162. The measure provided an additional $300 million for the Federal Emergency Management Agency for emergency disaster aid, $169.7 million for the Small Business Administration to cover the costs of making $500 million in SBA disaster loans and $25 million for additional administrative expenses for the SBA.

When the Senate took up the plan on May 21, it voted 61 to 36 to add $1.45 billion to the package to support programs for summer jobs, Head Start and neighborhood action programs. A House-Senate conference committee is expected to submit a compromise to both houses of Congress within the next few weeks.