Mr. KERRY. Mr. President, today I join Senator Robb and 16 other colleagues to introduce comprehensive legislation aimed at spurring economic development and person empowerment in our inner cities and isolated rural areas. Our economy is booming, and has been for most of the 90s, yet there are still individuals and families who are struggling.

What we've tried to do is develop economic incentives that will encourage business development and remove barriers that make it hard for entrepreneurs, community organizations and individuals to build healthy communities.

Among the many important initiatives in this bill is my new markets legislation that I introduced last September, S. 1594, the Community Development and Venture Capital Act, which passed the Senate Committee on Small Business today, and as part of the Clinton/Hastert package in the House yesterday. It also includes full funding for Round II of Empowerment Zones.

The Community Development and Venture Capital Act has three parts: a venture capital program to funnel investment money into distressed communities; Senator Wellstone's program to expand the number of venture capital firms and professionals who are devoted to investing in such communities; and a mentoring program to link established, successful businesses with small businesses owners in stagnant or deteriorating communities in order to facilitate the learning curve. The venture capital program is modeled after the Small Business Administration's successful Small Business Investment Company program. As SBA Administrator Alvarez pointed out just last week in a Small Business Committee hearing, the SBIC program has been so successful that it has generated more than $19 billion in investments in more than 13,000 businesses since 1992. And, in the past five years, the SBIC participating securities program has returned $224 million in profits, virtually paying for itself for the past nine years.

As successful as that program is, it does not sufficiently reach areas of our country that need economic development the most. One, out of the total $4.2 billion that SBICs invested last year, only 1.6 percent were deals of less than $1 million dollars in LMI areas. Two, only $1.1 million of that $4.2 billion went to LMI investments in rural areas. Three, in 1999, 85 percent of SBIC deals were $10 million and more.

In broader terms, the economy is booming. Since 1993, almost 21 million jobs have been created. Since 1992, unemployment has shrunk from 7.5 percent to 4 percent. In the past two years, we've paid down the debt $140 billion, and CBO currently projects a surplus of $176 billion. Some estimates even say more than $2 trillion. In spite of these impressive numbers, one out of five children grows up in poverty and there are pockets of America where unemployment is as high as 14 percent.

We can make a difference by investing in a new industry of community development venture capital funds that target investment capital and business expertise into low- and moderate-income areas to develop and expand local businesses that create jobs and alleviate economic distress. The existing 25 or 30 community development venture capital funds have set out to demonstrate that the same model of business development that has driven economic expansion in Silicon Valley and Route 128 Massachusetts can also make a powerful difference in areas like the inner-city areas of Boston's Roxbury or New York's East Harlem, or the rural desolation of Kentucky's Appalachia or Mississippi's Delta region.

Federal Reserve Board Chairman Alan Greenspan says "Credit alone is not the answer. Businesses must have equity capital before they are considered viable candidates for debt financing." He emphasizes that this is particularly important in lower-income communities.

What I'm trying to do as Ranking Member of the Small Business Committee, and have been working with the SBA to achieve, is expand investment in our neediest communities by building on the economic activity created by loans. I think one of the most effective ways to do that is to spur venture capital investment in our neediest communities. I am very glad that Senator Robb and my other colleagues agreed to include this powerful economic development plan in this legislation.

Switching to another provision in this bill, this legislation builds on the President's and Speaker's agreement by securing full, mandatory funding for Massachusett's Empowerment Zone. As I said earlier, this passed the full House yesterday by a vote of 394 to 27. Full, mandatory funding is important because, so far, the money has dribbled in--only $6.6 million of the $100 million authorized over ten years--and made it impossible for the city to implement a plan for economic self-sufficiency. Some 80 public and private entities, from universities to technology companies to banks to local government, showed incredible community spirit and committed to matching the EZ money, eight to one. Let me say it another way--these groups agreed to match the $100 million in Federal Empowerment Zone money with $800 million. Yet, regrettably, in spite of this incredible alliance, the city of Boston has not been able to tap into that leveraged money and implement the strategic plan because Congress hasn't held up its part of the bargain. I am extremely pleased that we were able to work together and find a way to provide full, steady funding to these zones. That money means education, daycare, transportation and basic health care in areas--in Massachusetts that includes 57,000 residents who live in Roxbury, Dorchester and Mattipan--where almost 50 percent of the children are living in poverty and nearly half the residents over 25 don't even have a high school diploma.

Mr. President, I thank my colleagues for their work on this important legislation.