WASHINGTON - President Clinton's $5 billion military base-closing aid plan should help somewhat in easing the economic pain on nearby communities, but some analysts question whether the amount is too little and whether the administration and Congress will be able to find the funds.

Under the plan announced Friday, Clinton pledged that his administration would spend $5 billion over five years to help redevelop some 129 bases in the United States that are to be closed. He vowed the redevelopment would create new jobs for workers at those facilities and some 46 other domestic bases that are being scaled back.

Clinton said that $2.8 billion would be spent for economic development and transition assistance for affected communities and civilian workers, while another $2.2 billion would be spent for environmental cleanup at the bases.

"I am ordering an unprecedented federal effort ... to assure that when we close these bases we also open a new and brighter future for the affected workers and their communities." Clinton said during a brief appearance in the White House briefing room.

"We will respond rapidly and spend money more wisely," he said, noting that the assistance program would include grants averaging $1 million to each community affected by a major base closing.

The program, which is designed to cut the usual government red tape, also includes:

*" Fast-track cleanup" to get the bases ready for other uses and to avoid needless delays, including the division of facilities into parcels so the cleanup of hazardous waste in one section will not delay the use of other parcels for economic development projects.

* New emphasis on putting local economic redevelopment first, including "fast-track" disposal of the bases.

* Streamlined assistance programs and reduced bureaucratic hurdles, with a single coordinator assigned to each community to aid in the conversion.

While some rating agency analysts and a state government official agreed that the aid program should help lessen the blow to nearby communities, they questioned whether the $5 billion over five years is enough.

"The $5 billion will certainly help, but that is less money in real terms than was spent in the 1960s and 70s," said Robert Durante, associate director at Standard & Poor's Corp.

"The market for some bases is not as good as it was in the past" due to the downturn in the economy, although "there is a silver lining for bases being closed in urban areas because the redevelopment prospects for them are better than those in rural areas, " Durante said.

Durante said the policy of separating a base into parcels so that the cleanup of a polluted section will not delay use of the rest of the site will help, "although some firms will still be scared off if a major cleanup is needed nearby."

Claire Cohen. executive vice president of public finance at Fitch Investors Service, said the President's proposed aid plan "is certainly better than nothing, but it seems kind of small when spread over five years."

The proposal to provide planning grants averaging $1 million to each affected community "seems really small because over five years that's only $200,000 a year," Cohen said.

Despite their comments about the size of the program, Milton Wells, director of federal relations for the National Association of State Treasurers, also questioned whether the administration and Congress will have trouble finding the funds.

"When it comes down to it, it's still a lot of money and I am not sure where it will come from," Wells said.

"Even though no one will oppose the funding, there are a lot of competing priorities and the money might not be there," he said.

Rating agencies officials said Friday it was too early to comment on the overall effect of the latest base closure proposals on the credit ratings and economies of affected localities.

Clinton unveiled his plan after accepting an independent commission's recommendations, completed a week ago to close 129 bases and realign 46 others. The recommendations are roughly similar to proposals the panel made in March. Clinton's only option was to accept or reject the plan without modification. The list will become final unless rejected by Congress within 45 days.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.