Obama Designates Areas in Five States for Targeted Federal Aid

President Barack Obama today designated five economically struggling areas in the U.S. as “promise zones” that will get targeted federal help to develop housing, education and job training.

“We got to make sure this recovery, which is real, leaves nobody behind,” Obama said in remarks at the White House. The president is focusing on aiding economically battered regions as part of the buildup for the economic themes that will be part of his State of the Union address on Jan. 28.

Obama proposes to use federal funding to concentrate on blighted areas to reduce crime, provide grants to boost housing in high-poverty neighborhoods and offer tax credits for the hiring unemployed people and tax write-offs for capital investments in such zones.

The zones, which Obama first proposed last year, were designated after local officials submitted plans to work with businesses, non-profit groups and educational institutions to expand job opportunities.

The first five areas to get the designation are in San Antonio, Philadelphia, Los Angeles, Southeastern Kentucky and the Chooctaw Nation of Oklahoma. Obama said he plans to name 20 more such zones in the next three years.

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The program involves multiple federal agencies, including the Departments of Justice, Education, Housing and Urban Development, Health and Human Services, Commerce and Agriculture.

Obama said that while the initiative is aimed at improving the lives of families in the nation’s poorest areas, government, business and community groups can’t guarantee success. “Individual initiative has got to start inside,” he said.

City Proposals

According to the White House, San Antonio officials will focus on job creation and training through a partnership with St. Philip’s College on local growth areas, such as energy, health care, aerospace, manufacturing and construction. The city will also expand adult education programs, and use funds to raze abandon buildings and improve street lighting in blighted neighborhoods.

Los Angeles will use federal funds and programs to work with developers to increase affordable housing. Its plan also calls for investments in public transportation and offering career training in high-growth industries in cooperation with the Los Angeles Community College District.

Philadelphia aims to boost employment through skills training and increased adult education classes by linking efforts with Drexel University and the William Penn Foundation. Programs to expand “hot spots” policing and foot patrols are planned to reduce crime.

Kentucky Aid

Local officials in an eight-county region of Southeastern Kentucky plan to leverage $1.3 million in private sector funds in a revolving loan fund within the promise zone. The goal is to diversify the regional economy by creating jobs, with an emphasis on small business. Berea College will operate career-readiness programs.

Kentucky’s two Republican senators, Mitch McConnell and Rand Paul, attended the White House announcement.

The Choctaw Nation of Oklahoma, the largest employer in the southeast part of the state, plans to link with Oklahoma State University and other institutions to improving workforce training for skilled trades, professional and women-owned business. The nation also plans to work with 85 schools districts to bolster early literacy and parent support programs. Another goal is to help diversify the regional economy with programs that apply advanced technology to traditional farming, ranching and large-scale greenhouses.

To contact the reporter on this story: Roger Runningen in Washington at rrunningen@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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