Kemp Vows to Help L.A. Win Urban Aid Package : Funding: Former Cabinet secretary criticizes Clinton for not designating the city an empowerment zone. He says he will work with new GOP majority in Congress to win support.

Former Cabinet secretary Jack Kemp, the leading Republican proponent of tax incentives to revitalize inner cities, said Friday that he is ready to work with Los Angeles and the new Republican majority in Congress to seek approval for a new and improved urban aid package to help Los Angeles and other cities.

“I’m going to do what I can to pursue support in the Republican Congress for my original idea of urban aid,” Kemp said in an interview. “I plan to talk with the Republican leadership soon about this.”

Kemp, widely viewed as a GOP presidential contender in 1996, called it a travesty that the Clinton Administration did not designate Los Angeles as an empowerment zone where wage tax credits would be available as a lure to business investment.

On Wednesday, President Clinton identified six cities, including New York and Chicago, as winners of the competition to gain empowerment zone status for their most blighted neighborhoods. Los Angeles was offered a consolation prize worth $350 million, but not the tax credits and $100 million in social service funds that would have made the original designation worth $300 million to $600 million a year.

The rejection of Los Angeles’ bid--which would have created a three-part empowerment zone covering segments of Pacoima, South-Central Los Angeles and the Eastside--dismayed and angered local civic leaders, including Mayor Richard Riordan.

A hallmark of Kemp’s public career has been his advocacy--first as a New York congressman and later as the secretary of housing and urban development in the Bush Administration--of using tax incentives to draw business to invest in the inner cities.

But, as Kemp noted Friday, such efforts were stalled for years until the 1992 Los Angeles riots. The riots were the catalytic agent that led Congress to pass the empowerment zone aid program in 1993, Kemp said.

Under the circumstances, it was unfair that Los Angeles should be left out of the program, Kemp said in an interview from Washington, where he is a co-director of Empower America, a leading conservative advocacy group.

Kemp noted that his efforts, with U.S. Rep. Charles Rangel (D-N.Y.) during the 1980s, to establish federal enterprise zones were backed by U.S. Reps. Newt Gingrich (R-Georgia) and Richard Armey (R-Tex.). Gingrich is set to become the Speaker of the House of Representatives and Armey the majority leader in the new Congress.

Riordan was not available for comment Friday but a spokeswoman said Kemp’s offer was welcome. Councilman Mark Ridley-Thomas, whose South-Central district was to have been part of the empowerment zone, agreed. “His support could be helpful,” Ridley-Thomas said.

Kemp said he will be pressing for a much bolder tax incentive plan than the one provided in the Clinton-backed empowerment zones.

“What we’ve got is far too little . . . to win the battle to save urban America,” Kemp said.

The $3,000-per-worker wage tax credits available to employers in the zones fail to address the top inner-city business problem--attracting investment capital, he said.

To do that, Kemp said, the empowerment zones need to be given a boost by offering investors a $250,000 tax deduction for pumping their capital into the stock of inner-city companies. “By giving investors in these businesses an upfront deduction of new equity investment, inner-city . . . entrepreneurs will receive the kind of seed capital they need to turn their entrepreneurial ideas into a successful, working business,” Kemp said.

Moreover, Kemp said he would support slashing the federal capital gains tax and offering an earned-income tax credit to give welfare recipients a greater incentive to work. The earned-income credit would offset the cost of payroll taxes that often make working less attractive financially than welfare, Kemp said.

Kemp recently caused a stir in California when he and his co-director at Empower America, William Bennett, another leading Republican, opposed passage of Proposition 187, the measure to limit government services to illegal immigrants. It was approved by voters in the November election.