FROM THE OFFICE OF PUBLIC AFFAIRS

I deeply appreciate the opportunity to be with you this morning. I am delighted to see Congressman John Lewis, who is an inspiration to us all, as well as Dr. Foley from the Governor's Yamacraw Project, those of you from Mayor Campbell's office, and distinguished guests from our universities and from the business community.

You are here because you want to help bring the benefits of the new economy, based on computer technology, to every region and every citizen of this State. The new economy has brought us the longest period of economic growth in our country's history. It has brought high productivity, low unemployment, stable prices and greater prosperity to American families, and helped turn red ink to black ink in the budgets of our nation and our states. We have every reason to expect that this remarkable economic expansion, now in its eighth year, will continue. This nation's leadership in research and innovation gives us a head start in adopting new technologies. Our highly trained and flexible workforce encourages the introduction of new and better ways to organize work. We also enjoy a rich cultural diversity, which helps us tap into markets around the world.

Our economy may be new in many ways, but it is based on old virtues: hard work by every American; education and thrift; discipline in government spending; balancing our budget and using the surplus to pay down our debt. Debt reduction, to which we are deeply committed, effectively functions as a tax cut, by permitting lower interest rates than would otherwise occur. Under the policies this Administration has followed, we estimate a typical family with a mortgage of $100,000 would save around $2,000 a year on mortgage payments. The budget the President submitted to Congress provides for $2.5 trillion in debt reduction over the next ten years, and an opportunity to eliminate the national debt completely by 2013.

A key issue that you are facing, as community leaders, is how to deal with those individuals and smaller business firms, especially those in low and moderate-income communities, that are not yet part of the new economy. The Department of Commerce recently issued a study showing that 60 percent of households with incomes of $75,000 or more have Internet access, compared to 12 percent earning $20-25,000; and that 47 percent of white households have computers, compared to 23 percent of African-American and 26 percent of Hispanic households. The same is true with our schools: in wealthy school districts, 74 percent of classrooms are connected to the Internet, compared to 39 percent for the poorest school districts.

We are trying to help bridge this digital divide as quickly and completely as possible. Last year, the Administration provided over $2.25 billion to connect schools and libraries to the Internet. Our current digital divide program contains three components:

• a 20 percent tax credit for employers who offer entry-level computer training, basic skills instruction, and English literacy instruction to educationally disadvantaged employees;
• a tax deduction for companies that donate computer equipment to grammar and high schools, public libraries or community technology centers located in poverty areas or enterprise zones; and,
• a 50 percent credit to companies that sponsor certain payments to these institutions, and to qualified zone educational academies in these areas.

I know that Congressman Lewis has his own bill on this subject, and we certainly want to take a good look at it because he knows the needs of these communities so very well.

Bridging the digital divide is part of the broader New Markets initiative which President Clinton undertook to unlock the potential of our inner cities and rural areas. The purchasing power of these communities, nationwide, is estimated to be close to $70 billion. Under proper conditions, they could be an enormous opportunity for private investment. The New Markets Tax Credit would help foster $15 billion in new private sector equity investment in small business growth in low-income communities. Private investors who make an equity investment in qualified venture capital funds, community development corporations and other investment vehicles will be able to earn a 25 percent tax credit on their investment over five years.

The other part of the New Markets program is the BusinessLINC Initiative, which was created by Vice President Gore in 1998. It helps stimulate economic growth by encouraging partnerships, between large companies and small companies in economically distressed areas, partnerships based on learning, investment, networking and collaboration.

Yesterday, I visited the South Fulton County Business Incubator, which is a good example of how New Markets is trying to bridge the digital divide. It provides a setting in which large companies provide technical assistance to 13 dot.com startups, which are themselves providing technologies which can bridge the divide. For example, one company has developed touch-screen technology in which kiosks can be put in schools and other buildings to provide access to information for those who do not have computers at home. The large companies benefit from the innovation in which the small companies specialize. The small companies get access to technical training and business development help, and most importantly get to sell their products to the large companies. The New Markets Tax Credit gives the private sector the incentive to invest additional resources in initiatives such as the Incubator.

I understand that Atlanta is forming a BusinessLINC chapter, that the Bank of America has agreed to take a lead role in its organization, and that a number of other large companies have expressed an interest in joining. I encourage all of them to do so, because this is the finest kind of partnership.

And let me add that while we reach out to new markets here at home, we also need to enlarge our markets abroad. Freer trade results in lower prices and greater opportunities to sell our goods. That is why we are working so hard to persuade the Congress to grant to China Permanent Normal Trade Relations status in our trade laws and supporting China's entry into the World Trade Organization. We will not be able to sustain the new economy unless we have access to what is the most populous market in the world in the 21^st century.

So I commend the initiative all of you are taking, and I hope you see how it fits into the broader national picture. Those of us who have seen Atlanta grow into the major world business center it is, want to see our economy work for all our people. I am sure you have some good ideas as to how to make this happen, and I look forward to hearing them this morning.

Thank you.