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Subject: The Winner's Immediate Challenge: Jobs, Growth; Congressional Leaders Urge
Date: Thu, 5 Nov 92 05:01:45 EST
Message-ID: <82.1992Nov5.050145@AmeriCast.com>

The Winner's Immediate Challenge: Jobs, Growth; Congressional
Leaders Urge Speedy Action<By Steven Mufson and Eric
Pianin=Washington Post Staff Writers= The sign that has graced
Clinton campaign strategist James Carville's  office in Little
Rock - "the economy, stupid" - can now be moved to the Oval Of-
fice.  If President-elect Bill Clinton has a mandate for any-
thing, it is to do something about the lackluster economy.

 Yesterday, congressional leaders urged Clinton to move swiftly
in the first 100 days after his January inauguration to win
enactment of tax incentives for new business investment, a job
training program and a national health care plan.

 "Bill Clinton is now the 800-pound gorilla. He is American poli-
tics and he's going to have to call the tune," said House Ways
and Means Committee Chairman Dan Rostenkowski (D-Ill.). "I'll
tell him to be bold."

 Clinton's economic advisers say the president-elect has not yet
disclosed what he wants in his plan for the economy or the budget
that will be due 11 days after he takes office.

They say that an expanded job training program and an investment
tax credit are high priorities.

 A start will be made on forging a consensus on a health care
plan, even if Clinton waits before introducing such complex, pol-
itically difficult legislation, the aides say.

 But many of Clinton's top economic advisers are warning him not
to inflate the public's hopes that a 100-day economic revitaliza-
tion program could bring about a quick return to vigorous growth.

 "I would advise reducing expectations," said one Clinton
adviser.  "I would make sure people know exactly what 12 years of
neglect has done. You can't turn that around in 100 days or eight
months or even four years." Another economic adviser said Clinton
should avoid the mistakes of Jimmy Carter's first year in office.
He said, "In retrospect, Carter really overloaded the circuits
with economic stimulus, a big energy bill and welfare reform. In
a very short time, he got bogged down and his political capital
was dissipated by being spread so widely."

  "Obviously you're not going to enact everything you've talked
about in the campaign," said House Budget Committee Chairman Leon
Panetta (D-Calif.). But he said "the country has given him a man-
date to get something done."

 President Bush's "no new taxes" pledge, which stood as a barrier
to compromise with Congress on tax and spending issues, is no
more, and now many Democratic lawmakers acknowledge the responsi-
bility for action is theirs.

 "I think this is the chance and Democrats in the Congress know
it," Panetta said. "We either work to get something done or both
the president and the Congress will be in trouble. No more ex-
cuses."

 If Clinton's plan can't produce the additional taxes it antici-
pates, if tax-raising estimates are wrong or if the economy stays
mired in slow growth, he might also have to make some
multibillion-dollar decisions to cut spending and scale back new
initiatives - choices big enough to knock whole items off his am-
bitious agenda.

 During the campaign, he has given only vague hints about how he
would make such choices.  Yet Clinton must be seen to be taking
some sort of action on economic issues. Asked to identify the two
issues that matter most, 43 percent of voters polled yesterday
singled out jobs and the economy.

 The next most pressing concerns, each cited by one-fifth of
voters, were health care and the federal government's budget de-
ficit.

 Those voters cast their ballots for Clinton by large margins.
Even voters anxious about the budget deficit supported Clinton in
substantial numbers: 38 percent voted for Ross Perot, 36 percent
for Clinton and 27 percent for President Bush.

 Clinton has defined his campaign as an effort to reverse the de-
cline in wages of American workers, yet that is a task for which
there is no easy answer.

 The growth of worker productivity has been lagging since 1973, a
key reason why wages for most workers have been stagnant for the
past 13 years.

 Moreover, Clinton faces many of the same problems the Bush ad-
ministration did: backbreaking burdens of private and government
debt, massive restructuring in the defense industry and runaway
health care costs.

 Slowing down the explosion in health care costs, much of which
are paid by the government, could produce a budgetary "health
dividend" that could dwarf the peace dividend, budget experts
say.



But if Clinton clamps down on health care spending, he might also
slow down job  growth in the robust health care industry, one of
the few engines of the economy.

  Clinton also will have to ask Congress to approve $43 billion
in spending to clean up the savings and loan mess, money that the
Bush administration failed to get approval for during the fiscal
year that just ended.

 Even without any new policies or any new stimulus to the econo-
my, the Clinton administration is likely to post a record budget
deficit of about $295 billion during its first year in office,
according to estimates by the Congressional Budget Office.  Wall
Street already has fired a warning shot across the Clinton team's
bow.  Bond investors, fearing that the Clinton administration
would overheat the economy and boost inflation, have pushed
yields on long-term bonds upward by half a percentage point.

 In a televised address from Little Rock, Ark., Clinton yesterday
moved to calm financial markets. "Although change is on the hor-
izon, we understand the need to pursue stability as we pursue
growth," he said.

 "The people have heard his economic message and want change,"
said Gene Sperling, a Clinton campaign aide on economics. "They
understand the difference between big wasteful government and in-
telligent government that invests in education, training and in-
frastructure. He'll have their confidence and also the obligation
to show that he can do it in a fiscally responsible manner."

 One thing is certain, no matter how Clinton draws up his leg-
islative program: The next administration will bring with it a
new commitment to governmental activism in everything from stimu-
lating the economy to nurturing industries to educating children.

 This marks a change from Bush, who said he opposed "trample-down
government." In the end, voters saw the Bush administration's
failure to stimulate growth and its opposition to new economic
programs as evidence of a lack of concern.

 In October 1991, Treasury Secretary Nicholas F. Brady brushed
aside anxiety about the sluggish economy. "I can remember being
apprehensive in every recession we've been in," he said. Programs
to speed up the economy would make the deficit bigger and would
only take effect after a recovery, Brady said, likening it to
"enacting legislation after the horse is back in the barn."

 The barn has a new keeper now, and there is not much chance that
the new Clinton administration will take that type of hands-off
approach.

 "Bush is passive. Clinton is energetic," said Roger Altman, an
investment banker and Clinton adviser. "Bush is whatever is in
the 'in' box. Clinton is going to come charging out of the
box."<03:05 11-05

Copyright 1992, The Washington Post.  This story is from the
Washington Post's Capitol Edition On-Line and is not to be ar-
chived or redistributed.

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