‘Promise zones’ could help poor

Published on Tuesday, 14 January 2014 20:54 - Written by

Republicans should support President Barack Obama’s plans for five “Promise Zones” to help alleviate poverty in some of the poorest places in America. After all, the GOP had the idea first.

“President Barack Obama announced at the White House Thursday the first five of 20 ‘Promise Zones,’ distressed areas located in Philadelphia, Los Angeles, San Antonio, southeastern Kentucky, and the Choctaw Nation of Oklahoma, that will get tax breaks and federal aid,” NBC News reported last week. “He said there are communities across America ‘where for too many young people, it feels like their future only extends to the next street corner or the outskirts of town; too many communities where no matter how hard you work, your destiny feels like it has already been determined before you took that first step.’”

He’s right, and the measures he’ll put in place in those Promise Zones could make a real difference.

That’s why Sen. Rand Paul proposed many of the same measures in his Economic Freedom Zones Act, introduced last month.

The way the zones work is by streamlining federal assistance while at the same time cutting regulations that discourage hiring.

The program will also offer employers tax credits for hiring, and tax breaks for capital investments in those zones.

These are great ideas, and they formed the core of Paul’s proposal to help save Detroit. The only real difference is the balance of assistance and incentives, and the level of federal versus local control.

“I am supportive of the president’s ideas,” Paul said following Obama’s announcement. “What he said was uplifting and encouraging.”

In fact, Obama’s ideas really go back to one of the most thoughtful conservatives of the last generation: Jack Kemp. He championed the idea of enterprise zones when he was in Congress, and later when he was Housing secretary to President George H.W. Bush.

“When people lack jobs, opportunity, and ownership of property they have little or no stake in their communities,” he said.

Kemp’s goal wasn’t to level the classes. It was to provide opportunity.

Of course, some on the left see the link here, and are already saying Obama’s Promise Zones won’t work.

“There are a variety of reasons for why enterprise zones have failed,” writes Bruce Bartlett in the Fiscal Times. “One is that businesses simply gamed the system and figured out ways to get the tax cuts without doing much of anything in return, something economists call ‘rent-seeking.’ Often, the ‘job creation’ in the zones resulted simply from the relocation of business just outside the zone into the zone. Another problem is that high taxes are not a significant reason why businesses don’t invest in the inner cities now. It’s more because they lack an educated labor force, transportation, a local population with purchasing power and other factors.”

All of these criticisms are valid, but they have more to do with implementation than design. Insignificant tax breaks and weak incentives won’t work well — obviously.

But Obama’s plan does hold some promise. That’s why the GOP should support it.