For a Panetta-Style Budget

January 12, 1993

President-elect Clinton should drop his election-year pledge of a middle-class tax cut before he takes office. Two of his major opponents in the Democratic primaries -- Paul Tsongas and Tom Harkin -- denounced the idea from its inception, and they were right. It makes little difference that President Bush used phony figures to underestimate the deficit during the campaign. His numbers, like those projected by Governor Clinton, were suspect all along. Both candidates made promises they couldn't deliver on.

Mr. Clinton should learn from Mr. Bush's mistakes. One of Mr. Bush's biggest bloopers was to cling to his irresponsible "no new taxes" pledge until runaway deficits and an obstructive Democratic Congress forced him to change course. It would be better for Mr. Clinton to wipe the slate clean pronto, not only on the middle-class tax cut but on his forecast that the deficit would be cut on half during the next four years. If he wishes to blame his retreat on Republican number-juggling, so be it. Savvy voters know better.

Fortunately, Mr. Clinton has in Leon Panetta a budget director who forged a reputation as a no-nonsense deficit hawk during his career in Congress. Yesterday, at his confirmation hearing, Mr. Panetta talked turkey about tax increases, not tax cuts: "We need to confront these deficits, to make the tough choices and be prepared for some sacrifice," he said. It would be well if Mr. Panetta's counsel prevails in the new administration.

Many non-partisan voices, including this editorial page, consistently warned that the national debt was rising faster than the federal government would acknowledge. But Mr. Bush was content to let his budget director, Richard Darman, fudge the books, and Democrats in Congress were interested primarily in embarrassing Mr. Bush by advocating tax cuts that would only exacerbate the nation's deficit problems. Now some of these same Democrats are saying it's okay with them if Mr. Clinton drops his promise of a middle-class tax cut.

Since anything Mr. Clinton proposes passes muster for now wit the Democratic leadership, we believe the president-elect should adopt a Panetta-style budget plan that would include only a minimal stimulus plan -- say, $20 billion for research and development and "infrastructure" -- plus moves to restrain overall spending harshly, cap runaway entitlement programs and impose taxes that will not short-circuit the recovery.

His first year is a new president's window of opportunity. It is the time to impose sacrifice and do the tough things needed to set this country back on a sane fiscal course. So let's stop arguing about which candidate was producing the phonier figures in the 1992 campaign. Let's face the future and do what is necessary.

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