Clinton to use summit to sell economic plan Meeting is exercise in public relations

December 13, 1992|By Gilbert A. Lewthwaite | Gilbert A. Lewthwaite,Staff Writer

LITTLE ROCK, Ark. -- The challenge for President-elect Bil Clinton at his economic summit this week will be to turn a cacophony of conflicting advice into a chorus of concern that can be used to sell his first 100-day action program.

What started out as an economic initiative has become largely a public relations operation. The summit will not set policy. Instead, Mr. Clinton will use it as an opportunity to educate the public on the economic problems facing the country and prepare them for his program.

Mr. Clinton became a maestro of managing town hall-type meetings during the presidential campaign. The gathering of academics, business and labor leaders in Little Rock tomorrow and Tuesday will allow him to tune into the worries of Americans of all varieties.

Two basic schools of thought will be voiced at the unusual session. The liberal wing of the Democratic Party will call for a significant growth package, even if it temporarily boosts the federal deficit.; Conservatives will argue that deficit reduction should take priority over economic stimulus.

Beneath this umbrella of discord lurk other likely differences, including support for -- and opposition to -- a middle-class tax cut, and a dispute between business and labor over free trade, particularly the North American Free Trade Agreement.

'There is a risk'

"There is a risk," said Steve H. Hanke, professor of economics at the Johns Hopkins University. "If these divisions start showing up in public, people might become a bit more cautious about the whole thing. Given that, I just would not have had the summit."

But one summit participant, Jeff Faux, director of the labor-backed Economic Policy Institute, said: "There will be differences of opinion. But what the hell? That's what democracy is about."

Mr. Faux will be calling for a stimulus package of up to $60 billion, at least twice what many other economists feel is necessary, given recent signs of renewed vitality in the economy. Mr. Faux supports the sort of middle-class tax cut embraced by Mr. Clinton during the campaign.

Among those arguing against such a large stimulus and a middle-class tax cut will be John L. Clendenin, chairman and chief executive officer of BellSouth Corp. of Atlanta. He will be there in his capacity as chairman of the Committee for Economic Development.

The New York-based committee, which includes 250 business leaders, this month produced its own blueprint for "Restoring Prosperity." It endorsed a pro-growth policy with a short-term stimulus tied to long-term deficit reduction. It opposed the middle-class tax cut on the grounds that it would stimulate consumption rather than savings.

Mr. Clendenin refused through a BellSouth spokesman to be interviewed. But Sol Hurwitz, the committee's president, said Mr. Clendenin would carry a copy of "Restoring Prosperity" to Little Rock.

"There will be differences," Mr. Hurwitz said. "But I think what's important is that you have a leader who is willing to recognize and confront those differences and try to find common ground. I would be surprised if any firm policy conclusions are reached as a result of this conference."

Marshall Palmer, an economist at the University of California, Berkeley, heads the Macro Economic Policy Group, a group of independent economists. He plans to monitor the conference, although he views it as little more than a mandate-building exercise for Mr. Clinton.

'A decisive plan'

"I think it's a lot of public relations," he said. "What he should do is sell a decisive plan, [but] . . . he is not ready yet. He feels he needs to build his popularity some more before he uses it to take a stand."

Significantly, Mr. Clinton announced his economic team before the summit. This should enhance the impression of seriousness and stability he can bring to the meetings, which he and Vice President-elect Al Gore will lead.

They will have to referee the summit disputes without openly taking sides. They have been careful so far to avoid specific policy commitments beyond the broad pro-growth, long-term deficit-reduction approach outlined in their election program.

They are waiting for release of the latest economic indicators at the end of this month before deciding on any stimulus package or the timing of tax cuts. Their policy on NAFTA, another of the contentious issues that will divide business and labor, has been consistently vague. Mr. Clinton endorses the agreement between the United States and Mexico, but with reservations.

The president-elect has been deliberately cautious in acknowledging what many economists view as evidence that the economy is entering a solid expansionary phase -- reduced unemployment, increased growth, restrained inflation. At his news conference Friday, Mr. Clinton was asked why he was so reluctant to accept that the recession was over.

He replied: "A lot of ordinary Americans think 7.2 percent unemployment and a lot of underemployment does not mean that the recession is over."

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