Defense Spending Set-Aside Program Is Saved
The Reagan administration yesterday backed away from plans to end a program designed to direct some defense spending to high-unemployment areas.</br></br>The northerners had acted in defense of a gain they won only last year after repeated assertions that the benefits of defense spending go disproportionately to the South and the West.</br></br>aside for economically depressed areas, such as Republican Rep. Carl D. Pur-sellÛªs home state of Michigan, where thousands of auto workers have been laid off. Firms in those areas could submit bids as much as 5 percent higher than competitors and still win the contracts.</br></br>Such set-asides apply to many federal purchases, but the Defense Department was specifically exempted by a Û÷27-year-old provision known as the ÛÏMaybank AmendmentÛ until Congress repealed the exemption on a trial basis beginning in February.</br></br>The administration had wanted to let that trial lapse in October, but alter some nudging by the northern congressmen, budget director David A. Stockman told Pursell: ÛÏGiven its late enactment and startup date, it is not certain that a complete and fair test of the value of this [set-aside] program can be achieved in fiscal year 1981. Therefore, the administration believes an extension of the program through fiscal year 1982 would be warranted.Û