President Clinton will be right to veto the massive tax cuts embraced by the Republican Congress. The wonder is that the Republicans are so wedded to a program that is dubious as both policy and politics. As Federal Reserve Chairman Alan Greenspan noted the other day, tax cuts might someday be justified to revive the economy from a recession or to improve the prospects of a sweeping program of tax simplification. But there's no case for big tax cuts based merely on paper projections of budget surpluses.

The projections, for example, assume a steep drop in both defense spending and domestic discretionary spending that may be unwise, particularly for defense. The White House estimates that these categories of spending will fall from 7.6 percent of national income in 1995 to 5.1 percent in 2010. (Domestic discretionary spending is a catchall that ranges from the FBI to environmental protection.) Similarly, projections optimistically assume that tax collections will remain near historic highs even though that may unrealistically require that the current economic boom continue forever.

Suppose that spending exceeds projections by one percentage point of national income and that tax revenues fall below projections by the same amount. In today's dollars, these errors -- not out of line with past mistakes -- would total about $170 billion annually. Most of the future surpluses would vanish. And if they do materialize? Well, the best way to use them is to repay the publicly held federal debt of almost $3.7 trillion. Reducing the debt cuts interest payments, now an eighth of federal spending. This would create a cushion against the future retirement costs of the baby-boom generation -- or an emergency.

Republicans once advertised themselves as cautious and prudent: precisely the qualities that recommend a policy of debt reduction. There are many possible explanations for why these virtues have been so casually sacrificed. One is that some party constituencies insist on tax cuts. Small businesses and farmers want relief from the estate tax; pro-family groups demand that the "marriage penalty" be eased.

Less convincing is the argument that, without tax cuts, the budget surpluses will be spent. Gee, Republicans control Congress. If they don't want to spend, why should they? To make this argument is to say that they don't trust themselves or that they expect to lose control of Congress. No, the real cause of the tax-cut obsession is Ronald Reagan -- or rather, the Reagan mythology.

In Republican folklore, Reagan won the presidency in 1980 because he campaigned against Big Government and promised major tax cuts. When Congress enacted these in 1981, they supposedly triggered the glorious economic recovery of the 1980s. Good policy and good politics combined. Tax cuts ensured Reagan's popularity and gave the party a strong identity. Ever since, Republicans have struggled to recapture the formula.

The trouble is that it's mostly an illusion. In 1980, Reagan didn't win because people were fed up with Big Government. He won because they were fed up with Jimmy Carter. Inflation was out of control at about 13 percent in 1979 and 1980. Carter seemed powerless to liberate 52 U.S. diplomats held hostage (ultimately for 444 days) in Iran. Nor did the 1981 tax cuts ignite economic recovery. Indeed, the deepest post-World War II recession was just beginning when Congress passed the tax cuts. It resulted from the high interest rates adopted by the Federal Reserve to crush inflation -- and ended when the Fed relaxed interest rates. To his credit, Reagan tolerated the Fed's harsh policy. By 1984, inflation was down to about 4 percent.

This and his own disarming personality solidified Reagan's popularity. Paradoxically, the foe of Big Government restored trust in government. Because inflation is so threatening -- it makes people fear for their wealth and the future -- its decline raised national confidence, including confidence in government. But Reagan never shrank government. His heirs have filtered out all the contradictions and, as a result, have fixated on massive tax cuts as the path to political salvation.

It is a dead end. Of course, people always prefer lower taxes. But opinion polls don't put tax cuts high on the public's wish list. Moreover, the Republicans' obsession with income tax cuts inevitably exposes them to charges that they're tools of the rich. Any broad income tax cut helps upper-income Americans most, because these people pay most income taxes. In 1999, the 2 percent of taxpayers with more than $200,000 of income will pay 40 percent of federal income taxes, estimates the Congressional Joint Committee on Taxation. The 6 percent of taxpayers between $100,000 and $200,000 will pay another 22 percent.

The irony is that the Reagan mythology has been a godsend for Democrats. In 1996, the focus on tax relief crippled Bob Dole's presidential campaign, and it's not helping Republicans now. In a new CNN/USA Today poll, 51 percent of respondents said the tax proposals aimed mainly to help the rich. Only 13 percent thought they were intended mostly for the middle class.

But what's good for Democrats isn't good for the country. We aren't getting a first-rate (or even a second-rate) debate on the surpluses. Hardly anyone speaks for caution and prudence. Clinton pays lip service to debt reduction, but this is increasingly becoming an afterthought. No one discusses paring back the huge future retirement costs of the baby-boom generation. Instead there's a competition among giveaways. The Republicans have tax cuts, and the Democrats' alternatives aren't any better. Clinton wants to create universal savings accounts for all Americans, enact various "targeted" tax cuts, invest Social Security funds in common stock and raise Medicare spending.

So. Clinton will veto the Republican tax cuts. Congress won't override the veto. Then, presumably, the White House and Congress will bargain. What they'll be haggling over is a bunch of bad -- if often popular -- ideas. The main hope for a good outcome is gridlock.