THE PRESIDENT still hasn't figured out where to head next, having reached his budget agreement with Congress. At a news conference Thursday he presented himself at one point as the agreement's protector, warning the legislators against violating its terms. Its enforcement provisions, he said, were "one of the great things" about it "that I am determined to live by, and ... to make Congress live by"; by curbing spending, they should "negate the insatiable desire on the part of some ... on the Democratic side to raise taxes."

That's fine, and we hope he does vigorously enforce the rules, but a few answers earlier he had suggested that he might be the one to break them. "When the economy is slow, you want growth incentives," he remarked, and he returned to a subject you might think the last month would have cured him of: his goal of cutting the capital gains tax. There are plenty of reasons why this is a bad idea, starting with the fairness issue, on which the president and his party were taking such a beating as Congress adjourned. Some 80 percent of the benefit of a cut in the gains tax would go to the richest 2 or 3 percent of the population. By widening the gulf between gains and ordinary income, a cut would also reverse tax reform, invite tax shelters, distort investment decisions and, in the long run, likely fail in its stated purpose of stimulating the economy.

But an even more basic objection in the current context is fiscal. Over time, like any tax cut, this would cost the government money. To keep the proposal from violating the new budget rules the president is pledged to enforce, it will have to be accompanied by spending cuts or offsetting tax increases that will vitiate the stimulus that is its purpose.

It's fair enough for the president to maintain, as he also did in the news conference, that he continues to be opposed to tax increases and that the ones to which he reluctantly agreed in the budget pact in violation of his famous campaign pledge were a one-time-only affair. For one thing, they may be all the increase a weak economy can take right now; together with the spending cuts in the pact, they may also be enough over time to move the structural deficit out of the danger zone.

But it is astounding of the president to go beyond that and say the country can grow its way out of trouble through tax cuts. The last time you heard that was in 1981, about $2 trillion of debt ago. It has just taken more than a year and more than a little of the president's political capital to put fiscal policy back on solid ground. The last thing he should want to do is squander that and dive back in the swamp.