Boxer Offers Plan for Cold War Retooling : Policy: Senator urges public-private investment program to ease state’s transition from defense contracts to civilian industries.

Sen. Barbara Boxer (D-Calif.) proposed a combination private-public investment program Tuesday to carry California through the troubled transition from a Cold War, arms-producing state to a more secure economic future.

Boxer’s plan incorporates some traditional programs from the Democratic agenda, such as universal immunization for children against disease and full funding for the Head Start program for teaching preschool-age children.

But it also includes proposals more often found in a Republican platform, such as making the research and development tax credit permanent and speeding up the depreciation of equipment for tax write-off purposes.

“The tax code currently stretches depreciation of semiconductor manufacturing equipment over five years, when the useful life of that equipment is closer to three years,” Boxer said, referring to products that are important to the state’s economy.

Defense spending in California peaked at $60 billion in 1988 and will settle at about $30 billion annually, Boxer said in an address to the Town Hall of California at the Los Angeles Hilton hotel.

Several of her proposals deal with the conversion of California defense and aerospace industries to civilian production.

She faulted the Ronald Reagan and George Bush administrations for their “utter failure during the 1980s to develop a strategy to respond to the end of the Cold War and the downsizing of the defense industry.”

In Southern California, the recession has been worsened by layoffs as the federal government trims the defense budget. More problems lie ahead as several military bases in California shut down or reduce personnel.

At her request, Boxer said, President Clinton has begun to distribute up to $1 billion to help defense companies convert. Among 8,000 applications filed so far, 3,000 are from California, she said.

The Administration is proposing to spend $25 billion over the next five years for community and worker assistance and retraining, technological conversion and economic development in areas that will lose military bases.

Boxer’s program also includes full financial support for the women’s and infants’ assistance program, health care reform and an economic growth fund.

The fund would obtain assets through bond sales to pension programs and loan the proceeds to companies for investment in new technology, she said.

Boxer said she and Sen. Dianne Feinstein, also a California Democrat, constantly remind Clinton that “if California doesn’t get out of its recession, then the country doesn’t get out of this recession.”

“We’ll never let him forget that,” she said. “California needs attention, needs a strategy and I’m here to tell you we’re working night and day on it.”