Clinton Doles Out Favors In California, Looks to '96

GARY HEBDON was impressed. When President Clinton recently came to this San Fernando Valley community to discuss ways to boost the California economy, the aerospace engineer appreciated the president's sensitivity to the state's woes.

It didn't hurt that Mr. Clinton dropped off a $2.6 million federal grant for his company, Rockwell International. But Mr. Hebdon has no illusions that a few defense-conversion dollars here and a housing grant there will winch the state out of its recessionary gully. ``It is a drop in the bucket right now,'' he says.

Hebdon's views encapsulate a dilemma facing the administration as it tries to give California special help - and secure it within Clinton's political base in 1996.

In an era of massive federal deficits, there is a limit to what the president can pull out of his goody bag to help any state. Thus he has to come up with what assistance he can - and give the impression of doing more - without angering other regions that are just as interested in the federal resources available.

Already there has been some grumbling on this front. When the Stanford Linear Accelerator Laboratory of the US Department of Energy was chosen over Cornell University (with a lower bid) as a site for a $177 million high-energy physics laboratory in October, two powerful New York Democrats - Gov. Mario Cuomo and Sen. Daniel Patrick Moynihan - complained to the White House.

Concern about regional favoritism has echoed from other congressional and gubernatorial offices in the Midwest and Northeast as well.

``It is a calculated risk,'' says H. Eric Schockman, a political scientist at the University of Southern California (USC). ``There are governors who are going to say, `California is getting too much.' ''

In his latest visit to the state - the eighth since taking office - Clinton was both giving and receiving in his one-year-old experiment to help California. At a roundtable discussion at Rockwell's Rocketdyne plant here over the weekend, area business and political leaders offered their views on ways to improve the economy.

Their wish list was long: increase mass-transit funding, support the development of advanced transportation technologies, establish more job-training programs. Clinton was urged to help ease the credit crunch for minority businesses, lift restrictions on the sale of satellites to China, and even hold the 1996 Democratic National Convention in Los Angeles.

The president, who dutifully took notes, also came bearing gifts: a $46 million grant for public-housing projects in Los Angeles and plans to unveil a $14 million program to help retrain defense workers in the state.

This followed the awarding of $155 million in federal defense-conversion funds - of which California won about one-quarter of the contracts nationwide. The Rocketdyne grant was one of them.

While the White House trumpets making California a top priority, aides continue to insist it is not giving undue attention: It is only assisting a state where one-eighth of the populace resides, defense cuts have been particularly deep and disruptive, and unemployment remains two points above the national average.

There is no argument with that logic here. Some political leaders - such as Los Angeles Mayor Richard Riordan (R) and state Assembly Speaker Willie Brown (D) - have lauded the president for his efforts. But others are waiting to see what other actions and aid will be forthcoming.

Ultimately, the president's fortunes here will pivot on results - whether the state's economy improves.

``If things get better, Clinton's relationship with the state will seem brilliant,'' says Susan Estrich, a USC law professor and political analyst. ``If not, he will have some explaining to do.''

Whether things do pick up will hinge as much on general economic policies and trends as anything the president does individually for the state. In an $800 billion economy, which California's is, there are only so many jobs that can be created with federal grants and goodwill.

The administration's lifting of export prohibitions on certain high-technology goods should be beneficial, since about one-third of the products are manufactured here.

Other policies have hurt, however. Besides the military slowdown, California has been affected by the increase in taxes on the rich. The state has a disproportionate number of high-income people.

``Federal fiscal policy toward California will probably continue to be more of a drag than a stimulus,'' says Gary Schlossberg, senior economist with Wells Fargo bank.

The White House can only hope things perk up before 1996.

A Field poll in August put the president's approval rating here at the lowest level of any elected president in his first year in modern history. It has rebounded somewhat since then, but remains low.

``Clinton is trying to use California as part of his electoral base,'' says Mark DiCamillo, poll director. ``He has a long way to go.''