ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Wednesday, January 15, 1997 TAG: 9701150075
SECTION: NATL/INTL PAGE: A-1 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
The White House unveiled a $3.9 billion ``tough love'' plan Tuesday to ease the District of Columbia's distress by using federal money to repair roads and bridges, run courts and prisons, fund pensions and care for the poor.
White House budget director Franklin Raines said the District would wind up getting $339 million more in federal support over five years. But it would also have to balance its own budget a year earlier - by Oct.1.
Raines called it ``a tough-love deal'' that will require the city government to get its own house in order.
Mayor Marion Barry said he was delighted with the plan. But a Republican senator derided it as ``a rip-off.''
Sen. Lauch Faircloth, R-N.C., chairman of the Senate Appropriations subcommittee that oversees the District, said, ``In effect, the Republican Congress is getting a bill for past Democratic Congresses that refused to rein in the District.''
The plan requires congressional approval. But among other things, it would end Congress' oversight power over the city's annual budget.
Rep. Charles Taylor, R-N.C., chairman of the House D.C. Appropriations subcommittee, warned that getting congressional support could be difficult.
``Throwing more money at difficult problems is not a unique recommendation in Washington but it is not the direction this Congress has been trying to steer the rest of America,'' Taylor said.
But Del. Eleanor Holmes Norton, the city's nonvoting delegate to the House of Representatives, said the proposal was far from a ``bailout.''
``I have no embarrassment in asking the federal government to do what it hasn't done in 200 years - help us out with functions that no city could bear alone,'' Norton said.
The plan would have the Internal Revenue Service collect city taxes.
The White House plan would transfer to federal taxpayers the responsibility of funding pensions for the District's police, firefighters, teachers and judge. It would force the District to shut off the current pension system and adopt a new, fully funded plan.
The plan would save the financially ailing city about $770 million over five years and essentially require the federal government to function like a state government for the city, said Raines and Treasury Secretary Robert Rubin.
President Clinton wants to be ``a good neighbor,'' White House spokesman Mike McCurry said. Clinton was criticized during his first term for being aloof from the District's problems.
But in recent weeks both Clinton and House Speaker Newt Gingrich have exhorted Congress to recognize its responsibility for helping the nation's capital get back on its feet.
Clinton's plan would force the city to relinquish the $660 million dollar annual payment it receives from the federal government in lieu of taxes. But the federal government would wind up spending $3.5 billion on the District over the next five years, or $339 million more than at the current level.
Key features of the bailout include:
* $891 million to operate and renovate the District's prison system, including its troubled Lorton facility in suburban Fairfax County, Va.
* $681 million to run the criminal courts.
* $125 million in 1998 alone to repair roads and bridges. The local government would still manage the roads.
* $917 million in increased federal Medicaid funds for health care for the poor.
* Unspecified tax incentives to bring investments downtown and to poor neighborhoods.
* Taking on the District's $4.3 billion pension liability, which was passed on to the city in 1979. The city would set up a new plan for people coming into the pension system.
The District has lost 10 percent of its population since 1990 and has fewer residents now (543,000) than at any time since Franklin D. Roosevelt's first inauguration in 1933.
LENGTH: Medium: 78 lines ILLUSTRATION: PHOTO: (headshot) Raines. color.by CNB