Treasury Secretary Discuss Plans for Keeping the Economy Strong and Reducing Gun Related Crime

By Larry L. Jones

In a very upbeat message to the nation’s mayor’s, U.S. Department of the Secretary Lawrence Summers told the nations mayors at the closing plenary session on January 28 that “for the first time in more than a quarter century, we have an economy where jobs are looking for people as much as an economy where people are looking for jobs.” Employers, he noted, are making significant adjustments to attract workers. For example, he mentioned that employers are offering workers job training, more job security and health benefits for their families. Summers said “I am convinced that the most important thing we can do as a country for our urban areas, for our social problems and for our people, is to keep that economy strong.” To do this he mentioned the importance of sticking to the Administration’s national policy of fiscal discipline, investment in people and a commitment to exports.

Secretary Summers discussed two issues of special importance to cities:(1) the promotion of access to capital for investments in distressed communities; and(2) gun safety. Like the last half of the last century, when America faced the challenges of making available universal access to voting, education, electricity and the telephone, Secretary Summers told mayors that our nation once again faces challenges of universal inclusion at the beginning of a new century. He said “one is the access to information and the digital divide, and the other is access to financial services and access to capital.”

A core part of the Administration’s economic strategy to improve access to capital is the strong support and enforcement of the Community Reinvestment Act (CRA). Last year Summers explained that the CRA made available more than $88 billion dollars in community reinvestment lending in communities across America. He also said the Administration, through the development of Community Development Financial Institutions (CDFI), is pioneering new approaches to providing community finance and market activities, which ultimately mainstream financial institutions could have taken up. Summers explained that CRA and CDFI are making a difference and in some cases they are “attracting large amounts of venture capital...and they make enormous differences in peoples’ lives.

Summers pointed out that another component of the Administration’s strategy to improve access to capital is the President’s commitment to the New Market Initiatives. This is a legislative proposal which would provide tax credits through a number of programs at different federal agencies to support equity investments in distressed communities. One of the initiatives he mentioned was the Business Links Initiative, which brings together small and large businesses in partnerships that will help promote business growth and expansion.

Commenting on a high priority of the Conference, Summers said the President would again push for the approval of School Construction Tax Credits, which has the potential of financing the renovation and construction of more than 6000 schools. Explaining the problem of school over-crowdedness, Summers said “it is wrong that in the richest country on earth, kids are beginning at four o’clock because schools have to work two shifts.”

On the issue of gun safety, another critical issue for the Conference, Summers said that while gun related crimes have fallen by more than a third, and while the number of juveniles commenting homicides with guns has fallen by 57 percent, much more remains to be done. He pointed out that “one person died of gunfire in the United States every sixteen minutes last year.” He also commended the nation’s mayors for helping to focus national attention on this problem and for helping to bring about a substantial change in the national attitude in this area.

In stressing the need to make more progress in reducing gun related crimes, Summers announced that the President’s budget for 2001 would provide for the largest increase in history for the enforcement staff of the Bureau of Alcohol, Tobacco and Firearms. The resources will be used to support front line agents working with firearms. In 1998, Summers said there were 2000 gun dealers (or 3 percent of active gun dealers) who had five or more guns used in crimes traced back to them. But this small group was associated with three-quarters of the gun crimes traced back to dealers. To address this problem, Summers said the Administration is proposing legislation that would require state-based licenses for handgun purchases, and continuing to work for legislation that will close the gun show loophole, which allows individuals to purchase guns at gun shows without a background check.