A Different Kind of President

November 15, 1992

President-elect Clinton's vow to halve the deficit within fou years may yet prove to be as elusive a pledge as President Bush's promise of no new taxes. If the recession drags on as leading indicators suggest it will, there is almost no chance he will achieve that goal with the economic program he offered during the campaign. Indeed, Mr. Clinton's greatest nightmare might be a federal deficit doubling rather than halving this year's $290 billion figure in the fourth year of his term.

Given this danger, the president-elect would be well advised to make an attack on the deficit his top priority in the revised budget he will offer in January for the 1994 fiscal year starting next October. He cannot afford to wait. "We didn't get into this mess overnight, and we won't get out of it overnight," he said at the close of his campaign.

While the deficit should be Mr. Clinton's top priority, political realities mandate that it will not be his first priority. He has promised "aggressive and prompt action" to jump-start the economy. This is an iron-bound commitment. The recession, which was his greatest campaign asset, is now his greatest enemy. The longer it lingers, the less he can "grow" the economy to produce sufficient revenues to shrink the deficit.

So the nation can expect an immediate $20 billion increase in spending on infrastructure. More significant will be a promised tax credit for new business investment in buildings and equipment and a cut in capital gains tax rates for start-up businesses. This would put the emphasis where it belongs: on the private sector rather than the public sector as the lead locomotive for a recovery.

To pay for some of this stimulus, the president-elect is likely to propose a 5 percent increase in income tax rates on the $200,000-plus bracket, a surtax on millionaires and increased taxes on foreign corporations doing business in this country. He also may shift $10 billion to $15 billion out of the Pentagon budget to the domestic sector. But this won't come close to bringing down the deficit if economic growth remains stalled below the 2 percent mark.

That leaves such sacrosanct entitlement programs as Medicare, Medicaid, veterans benefits, farm subsidies and (dare we say it?) Social Security as the most promising areas for deficit-reduction. To get at the medical entitlements, which have been growing by an unsustainable 12 percent a year, Mr. Clinton may well bundle them in a health-care reform package where the emphasis will be first on cost controls and only later on universal access. To deal with Social Security, he may make a greater portion of benefits subject to taxation in upper-income brackets.

All this hardly sounds like the feel-good blandishments heard from a Democratic candidate who never talked about sacrifice on the campaign trail. Yet it accords with our hopes that Bill Clinton will be a "different kind of Democrat" who will discard big-government liberalism in favor of a reliance on private-sector revitalization and individual responsibility and empowerment.

Mr. Clinton has already learned the markets will punish him with rising long-term interest rates that would zap any economic recovery if he opts for a government spending binge. So in choosing a known pump-primer, Harvard's Robert Reich, as his economic adviser for the transition, he achieved balance by naming Al From, a deficit hawk from the Democratic Leadership Council, as his domestic policy adviser. Mr. From believes if Mr. Clinton fails to get a grip on the deficit in his first year, his whole presidency will be in danger.

We urge the president-elect to tilt to Mr. From rather than Mr. Reich -- to be the No. 1 fighter against a rising national debt that is eroding America's world position and the living standards of its people. Future generations deserve consideration.

No doubt a dose of austerity and fiscal prudence will be unpopular in the midst of recession. But exit polls on election day are encouraging. They indicated that voters favored less government over more government by a margin of 54 to 38 percent. More to the point, the polls suggested more than half the voters favored reducing the deficit as their top priority compared with only 1 in 5 favoring expanded domestic programs and only 1 in 7 wanting taxes cut.

So much for tax-and-spend Democrats and the borrow-and-spend Republicans. Ross Perot may have had a lot of personality flaws that disqualified him for the White House. But his call for an all-out onslaught on the deficit resonated well with the electorate. As a victorious candidate who got only 43 percent of the vote, Mr. Clinton should pay close heed to the economic beliefs of the 57 percent who voted against him. They could be a potential reservoir of support if he has to alienate some of his liberal constituency.

What the American people want is "a different kind of president," one who will reject easy, short-term palliatives and spend his own political capital on tough, long-term solutions. Bill Clinton has a chance to be that president. Let him grab it.

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