Clinton's economic plan is a tricky piece of politics ON THE POLITICAL SCENE

JACK GERMOND & JULES WITCOVER

February 13, 1993|By JACK GERMOND & JULES WITCOVER

WASHINGTON -- Bill Clinton won the Democratic nomination and the presidency last year by putting himself forward as "a different kind of Democrat." When he unveils his economic program Wednesday, we will all find out how different.

Candidate Clinton's ability to cast himself as an agent of change in 1992 rested primarily on two elements. The first was his willingness to stand apart from the traditional party constituencies as the agent of the middle class.

The second was his renunciation of the tax-and-spend policies that the Republicans had exploited so effectively in arguing that the Democrats had deserted the working class -- a charge Republicans made stick even while helping the rich get richer year after year.

But Clinton never cast himself as the "Dr. Pain" of 1992 politics. That was a role played first by Paul Tsongas, later by Ross Perot.

Given that history, the economic program is a tricky piece of politics for the new president.

He must be able to make a convincing case that the reforms he is advocating are fair. And he must demonstrate beyond a reasonable doubt that they have some long-term hope of producing the healthier economy he promised.

Although the details of Clinton's plan remain to be seen, the president and his advisers already have test-marketed several of the ideas he will advance.

It is clear, most notably, that he will ask the middle class for some further sacrifice rather than offering the tax reduction he promised during the campaign. And it is clear that this reversal is going to require some strong justification.

Tax increases are always politically risky. In opinion polls voters always seem willing to accept higher taxes if they see a definite payoff at some time in the future. And, like many other Southern governors of his generation, Clinton has found they will swallow higher taxes if assured the revenues will be used for some specific purpose -- in the case of those states, usually education reform.

But tax increases are always more difficult to sell than polls may suggest. So the operative question here is whether the electorate will see there is enough to be gained from reducing the federal deficit to make the higher taxes tolerable.

That requirement means, in turn, that Clinton cannot accompany a proposal for higher taxes on the middle class with new spending plans that make him vulnerable to Republican charges he is just another Democratic liberal trying to provide a latter-day Great Society.

Clinton also won support in the business community last year that went substantially beyond what Democrats usually enjoy. Now that support apparently will be tested with higher rates on upper-income taxpayers, something he promised all along, and on corporations. The key to selling that particular proposal is whether his accompanying proposals for an investment tax credit and reductions in capital gains rates make the trade-off appear equitable.

The context in which the president will outline his plan is not entirely propitious. For one thing, the indicators of economic improvement since he won the election obviously have weakened the case for new federal spending on the infrastructure as a way for producing quick jobs. No one will be surprised if the Republicans depict any such initiative as a conventional payoff to the inner cities.

Clinton's position is made even more tenuous by the events of his first three weeks in office. The abandonment of some campaign promises, the problems of finding an attorney general, the emotional controversy over allowing homosexuals in the military -- all of these things have robbed Clinton of some of the political capital he held a month ago.

The president also has suffered some inevitable erosion in the reputation for political acumen that he enjoyed immediately after the election. Democrats who were oohing and aahing when he held his economic conference at Little Rock in December have been snickering at his convoluted attempts to complete his Cabinet.

Perhaps most important, however, is the fact that the time has passed when Republicans feel obliged to make nice in the interest of showing themselves to be more concerned about the republic than their own futures. If the Clinton economic program doesn't fill the bill, they will be the first to point out that the new president is not such "a different kind of Democrat" after all.

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