After a decade marked by federal government inaction in the inner-cities, Congress enacted a new $3.5 billion federal ``empowerment zone'' urban-renewal program last August.

The program closely resembles a Bush administration ``enterprise zone'' proposal that was never enacted - except for one key aspect. After being pared down by Congress, the Clinton program includes $1 billion to improve policing, schools, and job training; along with $2.5 billion in Bush-style tax incentives for businesses to move into impoverished areas and hire local residents.

Over 500 local governments across the country have applied to receive one of the new program's six urban and four rural empowerment zones. Winners will be announced next month.

With tight budgets and most 1960s antipoverty social programs viewed by the public as a failure, Clinton administration officials have portrayed the empowerment-zone program as a public-private partnership that will harness market forces to turn around blighted areas.

Conservatives say the $1 billion in social spending is unnecessary. They point to the success of 800 depressed areas in 36 states that have used tax breaks and other incentives to attract $30 billion in private investment and 300,000 jobs since the early 1980s.

But Richard Cowden, executive director of the American Association of Enterprise Zones in Washington, says that comprehensive change will only come from also funding traditional social programs. ``I would've been happier if they'd put a lot less in tax incentives,'' he says, ``and much more in aid'' in the new program.

Eric Blackwell, publisher of the Fort Greene News, which covers the area around Metrotech, warns that local governments can also be a problem. Mr. Blackwell says local officials, fearful companies would move to other areas offering similar incentives, did not demand enough in job training, peripheral development, and community improvements.

Brooklyn officials denied the charge, saying the project's minority-business incubator and other Metrotech efforts directly aid the community. Blackwell says enterprise zones can work, but in a weak economy filled with communities anxious for new businesses, developers hold most of the cards.

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