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Clinton Predicts End of California Slump : Economy: The President cites Pacific trade and state's resources in his vision of an upturn next year. He also points to his own jobs plan.


WASHINGTON — President Clinton, dispensing more hopeful predictions about California's future, said Friday that the state is likely to begin pulling out of its economic slump next year.

Clinton, who already has forecast that his economic plan will add 1.9 million jobs to the state by 1996, acknowledged in an interview with California reporters the difficulties caused by defense cutbacks, immigration, crime and poverty. But he predicted that California's Pacific trade and its "enormous human and physical resources" will bring the beginnings of a recovery soon.

"The intrinsic health of the California economy is still there," Clinton said in a half-hour session that tied him via satellite to reporters in a Fresno TV studio. "I think there will be a turnaround."

He said that while Pacific trade has been depressed by the recession in Japan, recovery in Asia should bring direct economic benefit to California. "The Pacific will . . . come out of this recession more quickly than the rest of the world, and that will disproportionately benefit California."

Clinton said that among the jobless in California are many "very well-trained, very highly educated people" whose skills can be applied to other work. And he cited infrastructure, built up partly by the defense buildup of the 1980s, "that can be revitalized."

Clinton's appearance was one of a series of sessions with regional reporters in recent days that were intended to build public support for his economic plan and thus indirectly apply pressure on wavering lawmakers. Sen. Dianne Feinstein (D-Calif.), who has complained of the plan's shortcomings, was a particular target of the California publicity offensive.

The President used the opportunity to assert the special benefits of his five-year economic plan, which he said is "not the end-all and be-all," but "good for the country, and it's good for California."

Clinton said that most important for California is a series of incentives intended to develop private sector business growth, including incentives for high-technology companies with less than $50 million in annual revenues. Clinton said that the state's high-technology industry wants those incentives "very badly." In fact, the industry has been divided sharply on their merits.

The President referred to the plan's call for additional research and development tax credits, and its creation of tax advantaged "empowerment zones" to draw business to stricken inner-city Los Angeles and other areas. He added that farms also would benefit from an investment tax credit.

Clinton noted that among the business chiefs backing his program is Lodwrick M. Cook, chairman and chief executive of Arco and a former co-chairman of President Bush's reelection campaign.

The President cited other benefits of his broader program for California, including a newly announced immigration policy that seeks to add as many as 600 Border Patrol officers. "California will get a good number of them," said Clinton, who did not forget to note that Feinstein and Sen. Barbara Boxer (D-Calif.) "were both particularly active in this regard."

Clinton said that his plan for converting defense industries to civilian work--also controversial among some critics--is "an aggressive plan, which, if done right, will be greatly beneficial to California."

Clinton cautioned, however, that Californians must look to themselves to solve some of the state's current economic problems. "If California is losing manufacturing jobs to other states, you need to figure out what you need to do to become more competitive."

He also said that the Administration "is going to have to make an extra effort to help areas like San Francisco" that will be hurt by military base closures.

The session came just after a satellite-linked press conference with a group of Arizona journalists.

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