Clinton Set-Aside Plan Becomes Election-Year Pawn

P> With one eye focused on the 1996 presidential election, President Bill Clinton soon will unveil an executive order to divert government contracts to companies based in poor neighborhoods.

White House officials, backed by several associations of minority business executives, oppose the Republican proposal because they say it threatens the future of the 8(a) program, which allocated $4.8 billion last year in set-aside contracts for minority-owned businesses. The Republican proposal is being pushed by Sen. Christopher Bond, R-Mo., the chairman of the Senate Committee on Small Business.

The Empowerment Contracting order "is probably the only hope we have to defeat the Bond proposal," said George Stephanopoulos, a close adviser to Clinton. Stephanopoulos spoke April 3 at a Washington meeting hosted by the Washington-based National Coalition of Minority Businesses.

Clinton and Vice President Al Gore declined to provide any specifics on their plan when questioned in March.

In recent weeks, the executive order has been fleshed out to help defeat Bond's detailed plan, said Delna White, an aide to Sen. Carol Moseley-Braun, D-Ill.

An October version of the Empowerment Contracting plan asked only the Commerce Department to draw up a scheme within 90 days for diverting government contracts to poor areas, but failed to define what areas would be classified as poor, how much money should be diverted, or what companies would qualify for the contracts.

The emerging battle over Bond's proposal is part of a complex White House effort to defend affirmative-action programs, and to defeat Sen. Bob Dole, R-Kan., the likely Republican candidate for president.

Because Dole may intensify his criticism of affirmative-action programs during the presidential election campaign, "we have to think how we can maneuver Bob Dole into a corner," Stephanopoulos said April 3.

One option would be to use retired Gen. Colin Powell -- now a member of the Republican Party -- to defend affirmative-action programs, he said.

One reason why Democrats suspect Dole will make affirmative action a campaign issue is that he sponsored a bill that would bar nearly all affirmative-action programs throughout the federal government. Dole's bill also is championed by Rep. Charles Canady, R-Fla., who won initial approval on March 7 from a House subcommittee.

During the presidential election campaign, "we are going to be in an awful lot of trouble" if Republicans succeed in generating controversy over affirmative-action programs. Likewise, they generated controversy during a 1994 debate on crime legislation by highlighting a White House plan to fund midnight basketball leagues, said Stephanopoulos. Defeating the Dole/Canady measure will "be a difficult legislative fight, particularly in the House," he said.

However, Dole may not try to make affirmative-action policies an election issue.

In previous years, Dole supported affirmative-action programs and made little effort last year to push the Dole/Canady bill through the Senate. Dole's campaign office released a statement saying Dole, "is uniquely qualified to conduct a serious re-evaluation of the federal affirmative-action programs...due to his strong record on civil rights."

In recent weeks, Dole has spoken out in support of the California Civil Rights Initiative, which would bar nearly all of the state's affirmative-action programs.

"The polls on this are pretty clear.... [Affirmative action] is going to be a wedge issue" that could generate additional votes for the Republicans, said Ed Kilgore, a senior fellow at the Washington-based Progressive Policy Institute.

The institute is run by the Democratic Leadership Council, a faction of the Democratic Party opposed to many affirmative-action programs.

"The old regime of affirmative action is difficult to justify... [but] even among those who react negatively to affirmative action, there is a feeling that there must be an alternative [government program] for economic opportunity," Kilgore said.

The Bond proposal could play a central role, partly because minority business executives fear Republicans will use it to dismantle affirmative-action initiatives such as the 8(a) program.

Bond's proposal is called the HUBZone plan. HUBZone stands for Historically Underutilized Business Zones.

Introduced in February, it defines what neighborhoods and companies would qualify for government contracts, and describes the new contracting rules that would divert 3 percent of federal contract dollars -- roughly $6 billion per year -- to poor areas.

The HUBZone is opposed by minority businesses, which say it will cut into 8(a) contracts, many of which are awarded for information technology services.

"I can't imagine that it would have any impact on the 8(a) program," countered Paul Cooksey, a Bond aide. By saying HUBZones would wreck the 8(a) program, White House officials "seem to be creating their own little crisis" to galvanize their supporters in the minority communities, he said.

The HUBZone plan has a roughly one-third chance of winning approval from the Senate Committee on Small Business this year, he predicted.

House Republicans also are complementing their anti-affirmative action efforts with a scheme that includes tax incentives, business deregulation and government use of religion-based welfare organizations.

The House Community Renewal Project was drafted by Rep. J.C. Watts, R-Okla., and Rep. James Talent, R-Mo., at the request of Republican Rep. Newt Gingrich, R-Ga., who did not want to eliminate affirmative-action programs without creating an alternative plan to help poor people.

"We expect it to be voted on this year," said Jack Horner, Watts' legislative director. However, both Horner and Michelle Morgan, Canady's press secretary, insisted their two bills are not related.

Whatever Democrats and Republicans decide to do, they should tread carefully, said Kilgore. "Both sides could be playing with dynamite on this.... I am not totally convinced that the Republicans will take the plunge" and make affirmative action a major issue in the presidential election, he said.