President Clinton’s Stimulus Plan

If Joel Kotkin and David Friedman would climb down off their ideological hobby horse, maybe they’d see President Clinton’s program for economic conversion for what it is (Opinion, March 21). Good for defense workers. Good for the companies they work for. Good for California.

Our problem is that the previous Administration lacked the will and the vision to plan for the downsizing inevitable in the wake of the end of the Cold War. We are having to play catch-up. Beyond the companies and workers affected, this downsizing hurts the small subcontractor in Hawthorne, the restaurateur in Inglewood, the dry cleaners in Gardena.

Clinton’s plan would spend $20 billion over five years for job retraining and entrepreneurial assistance for laid-off defense workers. It gives firms a breathing space and an incentive to convert to civilian production. Assistance for the communities involved helps cushion the blow.

It also promotes new technologies that a whole range of companies can exploit--firms formerly heavily dependent on military contracts as well as new “lean-and-mean” spin-off companies. The kind of licensing Kotkin and Friedman want defense contractors to do with smaller high-tech firms is exactly what conversion is all about.

I have proposed to give defense contractors a 15% investment tax credit applicable to increases in non-military investment. Kotkin and Friedman fantasize about defense contractors “pandering to liberals” for conversion monies. Not true. In fact, most defense companies haven’t yet climbed onto the conversion bandwagon.

Kotkin and Friedman claim defense contractors are wooing “liberals” like me with racial set-asides and affirmative action. This is nonsense, plain and simple. If this duo is opposed to affirmative action, then they ought to say so directly rather than mix it up with economic conversion.

REP. MAXINE WATERS

D-Los Angeles