The Clinton administration Thursday promised "a sweeping policy shift" to ease the pain of defense cutbacks by spending $20 billion over five years on defense workers, hard-hit communities and technology.
Clinton Thursday is showing off a Baltimore factory's transition from swords to plowshares to illustrate his initiative, which he hopes will temper economic and political fallout from massive cuts in military spending."This is a major sea change in economic policy," Gene Sperling, deputy assistant to the president for economic policy, said Thursday. "This is a sweeping policy shift from the last 12 years."
He said $1.7 billion will be spent in the fiscal year that ends Sept. 30, including $1.4 billion Congress appropriated last year for defense conversion but not spent by the Bush administration. The Clinton administration will redirect another $300 million from other projects to bolster defense conversion this year, Sperling said.
By 1997, the U.S. would spend $5.2 billion a year on defense conversion. Total spending between 1993 and 1997 would be $20 billion, he said.
"All of these things . . . minimize the amount of dislocation and minimize the number of people who lose their jobs," Sperling said.
He said 2 million people will lose their jobs because of defense cutbacks.
Greg Bischak, executive director of the National Commission for Economic Conversion and Disarmament, said the private research group applauds Clinton for taking a more active role in defense conversion than former President Bush.
But Bischak said most of the 1993 program "is likely to be ineffectual at best" because it puts too little emphasis on advance planning by defense companies seeking to enter civilian product markets.
"It's going to be salve for the wound, but it's not going to do it," said Rep. Floyd Spence of South Carolina, the ranking Republican on the House Armed Services Committee.
Sperling said the administration plan includes $375 million this fiscal year and $4 billion in five years for retraining workers, an $80 million revolving loan program for communities hit by plant closings, and funds to reward defense contractors that integrate projects with civilian uses.
Parts of the package were announced last month on a trip to California, but Clinton was formally unveiling it Thursday at a Westinghouse Corp. plant in Baltimore.
The Westinghouse plant was chosen as the backdrop because the company is shifting its emphasis from defense contracts to civilian programs, said White House spokesman George Stephan-opoulos. The plant recently laid off 4,500 workers.