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Change Doesn't Come Cheap

By Dan Balz
Washington Post Staff Writer
Thursday, February 18, 1993; Page A01

President Clinton promised the voters last year that if he was elected he would reverse the Republican policies of the past 12 years. Last night, he finally explained the full cost of living up to that promise – a volatile political mix of new taxes and spending cuts on which he is gambling his presidency.

Clinton laid out his economic program in a long and diffuse State of the Union Address. He once said he would "focus like a laser beam on the economy," but he used his first speech to a joint session of Congress -- which ran an hour in length – to outline a domestic agenda that could fill up his first term and more.

But at the heart of the speech, at times lost in his barrage of rhetoric, was a call to enact a potentially painful program to assure the economic future of the country. "Unless we have the courage to start building our future and stop borrowing from it, we are condemning ourselves to years of stagnation, interrupted only by recession, to slow growth in jobs, no growth in incomes, and more debt and disappointment," he said.

This was not the Clinton of the campaign trail, a candidate who regularly urged people to have "the courage to change," but who asked little of them other than their votes. The plan unveiled yesterday clashed in significant ways with the rhetoric that brought Clinton to Washington, as the new president bluntly acknowledged that the brighter future he described comes with a stiff and immediate price tag.

The $493 billion package of new taxes and spending cuts was as dramatic and comprehensive as he had promised, slicing through every federal agency and household in the country – although some of his proposed spending cuts are as problematic as those he outlined during the campaign.

But Clinton strayed repeatedly from the principal message of the night, concentrating more on areas where he would spend more money than he did on the ways he would restrain government's growth. And his moment of greatest passion was reserved for the next major item on his agenda, reforming the health care system, which is crucial to his goal of reducing the deficit but can come only after his economic package has been approved.

When he focused on the economy, Clinton was part populist, part Ross Perot, a posture he has attempted to strike ever since post-election fiscal projections showed the deficit problem worse than he said it was during the campaign.

But he also devoted part of his speech to recalibrating the message he delivered from the Oval Office on Monday night, a 10-minute speech that spooked the stock market and brought the administration two days of stories about its plans to raise taxes on everyone with an income of more than $30,000.

To reinforce the idea that the plan won't hurt business, Clinton gave Federal Reserve Board Chairman Alan Greenspan the seat of honor last night, next to First Lady Hillary Rodham Clinton in the balcony of the House chamber. Clinton also praised private business as the engine of American prosperity and emphasized its partnership with government in reversing the stagnation of the past two decades.

To enlist public support for the battle ahead, Clinton identified the enemies who will bear the brunt of change: the wealthy, who he has said profited unduly from the policies of the '80s; and Washington itself, from the lobbyists whose culture will be less tax-deductible, to the federal agencies, which will be put on an involuntary diet. He also reiterated his call for political and campaign finance reform, a subject that is likely to produce a clash with Congress later this year.

In those and other ways, Clinton was true to the flavor of his campaign. His longer-term investment program and his stimulus package -- a short-term sweetener to be washed down in advance of the coming fiscal medicine – conform with the priorities he enunciated from the first primary in New Hampshire through the general election in November: more for children, education and worker training, more for infrastructure, technology and job creation; less for defense and less for the privileged class.

But in other ways, his plan departs dramatically from the campaign. For the forgotten middle class, the families and workers whose cause Clinton championed throughout the campaign, it is a mixed bag. Instead of the $60 billion in tax cuts he once had promised, there were tax increases in the form of a broad-based energy tax.

Clinton stressed the progressivity of his overall tax increases, saying 98.8 percent of Americans will see no rise in their income taxes. But the tax hikes for the middle class raise questions of credibility for the new president, who as someone who won the White House with just 43 percent of the vote cannot afford slippage at the outset of his most difficult fight.

Clinton's presidency likely will turn on how those middle-class voters perceive the plan. Will they see it as the program of a "different Democrat," as Clinton likes to call himself, or as the product of a tax-and-spend Democratic Party, as House Minority Leader Robert H. Michel (R-Ill.) charged in his official GOP response.

Paul E. Tsongas, who challenged Clinton's economic prescriptions as irresponsible during the campaign, marveled yesterday at the "evolution" of the new president. "The person giving the speech {last night} is not the same person I campaigned against," Tsongas said, "and I think the country is better off for it."

Tsongas said he believes the people are more prepared for the message of sacrifice inherent in Clinton's economic plan than they were a year ago, which will increase Clinton's chances of enacting it much as he has proposed it.

"What he's got going against him is that he didn't run on these things and there's no clear mandate," Tsongas said. That will make Congress less willing to go along, he added, unless there is a powerful outpouring of support from the public.

Clinton appealed to the public last night for just that. Resist "the temptation to focus only on a particular spending cut you don't like or some particular investment that wasn't made," he said. "And nobody likes the tax increases."

The country must "play the hand we were dealt," he argued, calling on the public to make the test of the program not, "What's in it for me?" but, "What's in it for us?"

Clinton now faces a two-step challenge. First he must persuade the public and Congress to support the plan, then he must count on it working quickly enough to turn the economy around. Clinton's advisers have argued that his central compact with the voters is to fix the economy, that the details of how to do it are up to Clinton, even if they involve broken promises, as long as it works.

Members of the administration will fan out today to sell the package to the country, with the president heading for St. Louis. Democratic pollster Harrison Hickman said he found the locale the right metaphor for the battle ahead.

"I think it's appropriate that he's going to Missouri," Hickman said, "because it's all 'show me' now. If it works, it's a great idea. If it doesn't, people will be more concerned about the slippage between campaign promises and policy proposals."

© Copyright 1993 The Washington Post Company

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