WASHINGTON -- It's disheartening what an administration will do when it gets into political trouble.

Now that Mr. Bush is running third in the polls to Democratic candidate Bill Clinton and upstart independent Ross Perot, the White House has suddenly discovered the value of tax-exempt, private-activity bonds after ignoring or trying to eliminate them for the last 11 years.

But typical of the Bush administration, its proposal is disjointed and inconsequential.

With pressure building on the administration and Congress to try to hammer out an urban aid package, administration officials trotted up to Capitol Hill last week to push Congress to approve the creation of urban enterprise zones and for the first time said bonds should be used in conjunction with the zones.

Yet it was apparent when they testified before the Senate Finance Committee last week that their latest plan for so-called E-zones had been thrown together the night before without much thought or planning.

Housing and Urban Development Secretary Jack Kemp said Mr. Bush wants to resurrect the use of tax-exempt commercial industrial development bonds that Congress abolished in 1986 for use in the zones to finance businesses such as retail stores.

But Fred T. Goldberg, assistant Treasury secretary for tax policy, said Mr. Bush is actually proposing the creation of a new kind of exempt-facility bond, which would allow the use of tax-exempt bond proceeds to make loans of up to $250,000 to businesses in the zones.

When asked by a reporter to clarify which kind of bond President Bush is advocating, Mr. Goldberg said, "you can't get hung up on the technicalities."

Yet it's the technicalities that often mark the difference between success and failure and that slap-dash answer indicates just how disorganized the White House really is.

For instance, a Treasury aide said later that the loan bonds would be subject to the private-activity bond volume cap -- a restriction that may keep them from being used very much, especially in riottorn California which uses up its cap each year.

In addition, neither official said anything in his written presentation whether the administration favors extending the use of manufacturing IDBs which are due to expire on June 30 and using them to spur the creation of jobs within the zones.

Only during questioning did Mr. Kemp volunteer that the administration favors extending manufacturing IDBs and other expiring provisions, such as mortage bonds.

Mr. Bush has been touting jobs as the answer to poverty, yet it is astounding that his advisers said nothing about coordinating the use of both manufacturing IDBS and the proposed commercial loan bonds to spur jobs in the zones.

Much like the the President's 1993 budget plan that proposed extending mortage bonds and IDBs for first-time farmers for 18 months, the plan for expanded bond use in E-zones appears to be designed more to win a few votes than solve any problems.

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.