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Just days after pledging to shrink the Department of Housing and Urban Development as part of the ongoing tax-cut frenzy, President Clinton today pledged up to $3.5 billion in HUD grants and tax breaks to 106 economically-distressed communities. The biggest winners are three cities and six rural areas designated as "empowerment zones," a scheme designed to lure business to depressed areas first championed by conservative former HUD Secretary Jack Kemp. The urban zones -- Atlanta, Baltimore, Chicago, Detroit, New York and Philadelphia-Camden, N.J. -- stand to receive $100 million each in flexible grants and tax breaks for local businesses, while the rural zones -- Kentucky Highlands, Mid-Delta in Mississippi, and Texas' Rio Grande Valley -- should get $40 million apiece. In addition, Clinton unveiled second-tier recipients: Los Angeles, Cleveland and 90 smaller areas, which will get grants, but no tax breaks. Clinton said the move was a nod to the fashionable idea that communities should decide how to spend federal money, but Kemp -- a 1996 presidential contender -- dismissed the package as "timid."