House GOP Agenda to Shift to Plight of Poor : Legislation: Undisclosed plans outline creation of 100 economic zones in cities, tax breaks to spur business, jobs.

House Republicans, roundly accused of abandoning the nation’s poor by dismantling much of the federal safety net erected by Democrats, are working behind the scenes on a second wave of social legislation they intend to introduce in 1996.

Proposals under consideration, outlined in an undisclosed report obtained by The Times, include creating 100 “economic opportunity zones” in distressed urban areas, replacing the earned-income tax credit with direct cash assistance for working poor families and providing new tax incentives for private organizations to take over social programs no longer underwritten by Washington.

The draft legislative agenda is called “Project Hope and Opportunity” by GOP leaders. It addresses anti-poverty policies in general but is specifically aimed at the nation’s central cities, where the plight of the poor seems most intractable.

Drafted by a task force of House Republicans appointed by Speaker Newt Gingrich (R-Ga.), the document is based on a series of meetings with leaders of poor communities. It outlines what is intended to be a comprehensive effort, steeped in Republican ideology, for reinvigorating economically distressed urban areas.

Before that renewal can begin, however, the authors argue that Washington must first break up old big government programs, such as Aid to Families With Dependent Children, that may have fostered dependency in poor communities. That process has already begun with the passage of GOP legislation transforming welfare entitlements into block grants and cutting funds for dozens of social programs.

In the place of traditional Democratic programs, GOP policy-makers envision a new anti-poverty strategy that encourages the creation of new business and employment opportunities in downtrodden communities so jobs will be available for potential workers being weaned off welfare.

“It’s the natural other half to welfare reform,” said Rep. James M. Talent (R-Mo.), one of two co-chairmen of the task force. “As you change incentives in the welfare system, you also want to reinvigorate private institutions in poor communities.”

The overriding emphasis of the GOP anti-poverty agenda is to shift the primary responsibility for reinvigorating poor communities from federal and state bureaucracies to grass-roots organizations and individuals who live in poor neighborhoods.

“What it is not going to be is big government, Great Society programs,” Talent said. “That experiment has not worked.”

Clinton Administration officials and members of Congress who have advocated the interests of the poor praised the Republicans for focusing attention on issues that have long been the domain of Democratic policy-makers. But they argued that some of the specific proposals could do more harm than good, while this year’s massive spending cuts are likely to dwarf any positive effect of the second-wave social legislation.

“I welcome their engagement in serious recognition with the problems that confront the cities, and I’m impressed with the Speaker’s recognition of the importance of the cities,” Housing and Urban Development Secretary Henry G. Cisneros said in an interview. “But the budgets they have presented do so much damage that these initiatives will be like standing on the beach and trying to hold back the tide. The wave of people who go to poverty and homelessness from some of the cuts that have already been made will not be offset by new opportunities created next year.”

Specific GOP proposals outlined in the “Project Hope and Opportunity” document include:

* Creating 100 “economic opportunity zones” nationwide. Entrepreneurs would receive tax incentives for starting businesses and hiring welfare recipients. Capital would be made available by targeting funds from such existing sources as small business loans and community development block grants.

* Slashing excessive regulations that create obstacles to would-be entrepreneurs. For example, GOP legislation might relax or eliminate local and state rent controls, licensing laws and business application processes.

* Placing a five-year moratorium on the minimum wage and replacing the earned-income tax credit with direct cash assistance for working families with dependent children. Conservative economists argue that the minimum wage, while improving the lot of those who receive it, reduces the total pool of low-wage jobs.

* Providing vouchers for families in poor communities to send their children to private schools. Many conservatives contend that enabling parents to place their children in private institutions will force public school systems to improve.

* Replacing government-run job-training programs with programs crafted by local charities and churches, staffed by volunteers and funded through private donations. GOP policy-makers are considering creating a dollar-for-dollar tax credit that could significantly increase donations to charitable organizations.

* Privatizing public housing projects and providing rent subsidies for poor people who rent from private landlords. Both proposals are designed to get the government out of the business of running public housing.

While some of the initiatives remain embryonic, most of them are expected to be incorporated into a legislative package to be introduced by GOP leaders next year. “I fully expect these ideas in one form or another to survive this process,” Talent said. “The leadership is very serious about this.”

Many of the specific ideas are rehashed versions of old GOP policy proposals. But the authors of the document see them as forming a comprehensive framework for government anti-poverty programs, instead of the small-scale experiments undertaken so far.

With Republicans controlling both houses of Congress for the first time in 40 years and with many Democrats disavowing the old approach to social policy, there is a much greater opportunity to apply these theories on a broad basis.

In outlining the basic principles of the new Republican policies, the document states: “Any recipient of assistance must be willing to help themselves before accepting help from the government.”

Cisneros said the Administration has tried to adhere to a similar philosophy.

“But there are many people who need help--help in getting training, help in getting housing,” Cisneros said. “There are elderly and disabled persons who cannot help themselves.”

Policies designed to stimulate development in poor communities with tax incentives and private capital tend to attract support from Democrats as well as Republicans, so some of the GOP proposals may find a receptive audience on both sides of the aisle.

Some, however, are bound to be more controversial, such as the moratorium on raising the minimum wage and replacement of the earned-income tax credit.

Rep. J. C. Watts (R-Okla.), a freshman who co-chairs the Minority Issues Task Force, defended the GOP strategy of freezing the minimum wage. “If you raise the minimum wage, what happens is the little person ends up being the person that’s laid off and out of a job,” he said.

The failure of traditional anti-poverty programs, Watts argued, is proof that it is time to try a new strategy for addressing the chronic problems of poor communities.

“We found out over the last 30 years that throwing money at problems is not always the best way to do it,” Watts said. “We have taken grass-roots folks out of the process and have taken the attitude that Washington knows best. We’re going to change the way things have been done.”

Rep. Maxine Waters (D-Los Angeles) disagreed with the Republican approach. “You cannot have a society where goods and services increase [in price] and wages are suppressed,” Waters said. “We’ll have a disagreement on that until hell freezes over.”

Waters also argued against shifting responsibility for serving the poor to charities and churches.

“That’s crazy,” she said. “That’s absolutely nuts. Volunteers are great. But volunteers cannot be relied on. Anybody who wants to run a real business does not say: I’m going to run this business with volunteers. You can’t get housing by having Jimmy Carter and his volunteers come and build 15 houses in Watts. It’s cute. It’s good. I like it. I’m not against it. But it’s not real public policy.”

GOP policy-makers acknowledged that the new programs are unlikely to receive billions of federal dollars, but they expressed confidence that their leadership will find smaller amounts of money for projects that appear promising.

Jeffrey Eisenach, president of the Conservative Progress and Freedom Foundation, said Republicans are taking the lead in anti-poverty policy for the first time in decades. One reason is the personal interest of Gingrich and former HUD Secretary Jack Kemp in finding solutions to the poverty problem. Another is that Democrats have largely abandoned the issue.

“There simply are no Democrats standing credibly on the field,” said Eisenach, one of Gingrich’s closest advisers. “There is no credible basis to defend the programs of the Great Society. The ones who do so look increasingly anachronistic. Republicans have occupied it by default. People having completely rejected the methods and mechanisms of the Great Society are looking for something new.”

Republicans engaged in crafting the new anti-poverty policy said they believe their efforts will have a positive impact, but they conceded that any measurable progress will be some time in coming.

“I think you can begin to see a lot of changes in policy, but the expectation can’t be that those changes will erase the problems that resulted from 30 years of bad policy,” Eisenach said. “It’s not even clear that the problems won’t get worse before they get better.”