TIME: Almanac 1993/TIME Almanac 1993.iso/time/120291/1202101.000

Text File | 1992-08-28 | 4KB | 85 lines

                                                                                NATION, Page 20

At Least Someone Has a Plan


By Michael Kramer


    George Bush's popularity is vaporizing faster than
teardrops in a blast furnace. Matched against an unnamed
challenger in recent polls, the President actually loses the
1992 election. Unfortunately, you cannot beat somebody with
nobody, and Bush still trumps the current Democratic field in
head-to-head pairings. But each bit of bad economic news
heartens the opposition and reveals a paralyzed Administration
whose divisive domestic policy sessions have come to resemble
dining-hall food fights.

    The Democratic contenders have yet to make the most of
this opportunity. They are all great on diagnosis, but only
Arkansas Governor Bill Clinton is close to cobbling together
something resembling a coherent economic policy.

    Clinton has little use for either supply-side economics or
"the old Democratic theory that we can just tax and spend." He
is most concerned with helping the U.S. compete globally, so he
emphasizes education and worker training.

    Clinton's plan is best perceived as a series of short- and
long-term steps. To deal with the immediate crisis, he says,
three antirecession measures are needed: 1) quicker spending on
highway construction to provide 45,000 new jobs; 2) a higher
ceiling on Federal Housing Administration mortgage guarantees
to aid half a million first-home buyers; 3) a revenue-neutral
tax-rate cut averaging $350 a year for middle-class families,
to be paid for by increasing the tax burden on those who earn
more than $200,000 a year. Most other Democrats favor a
child-care tax exemption instead of Clinton's prescription, but
only about half the population would be helped by such relief.
Either approach would have almost no economic impact, but by
acknowledging that the rich have reaped a decade-long windfall
at the expense of the middle class, both reflect compassionate
social policy.

    Over the long haul, Clinton would fully fund Head Start
and institute a program of national service under which
students would repay college-tuition loans by serving their
communities for two years. Those two programs alone would
require close to $10 billion, a cost that Clinton suggests could
be covered by reducing defense spending and by imposing
private-industry performance standards on government programs,
with yearly 3% funding cuts mandated across the board.

    Overall, Clinton would limit government-spending growth to
the rate of increase in personal income, which has been rising
anemically for the past 20 years. Only investments in
"wealth-producing, future-oriented" programs like research and
development would enjoy deficit financing. Clinton would push
for union work-rule revisions, and he would impose a tax penalty
on corporations that pay their executives excessive salaries --
a provision that could kick in when big shots' salaries exceed
25 times the earnings of a company's lowest-paid worker. Clinton
views most current worker-training schemes as virtually useless.
"Roughly 70% of corporate training expenses serve only 10% of
employees," says Rob Shapiro of the Progressive Policy
Institute, a centrist think tank that is advising Clinton.
"Companies are loath to train lower-rung employees for fear
they'll leave for other jobs. Compelling all U.S. corporations
to spend similar amounts on all employees would solve the
problem."

    If Clinton's campaign makes headway, his program will be
scrutinized mercilessly. If not, it will be ignored. Whatever
the outcome, Clinton has already proved that he, unlike Bush,
appreciates the advice offered the President by Housing and
Urban Development Secretary Jack Kemp. The people will "forgive
you for trying" to innovate economically even if you fail, says
Kemp. "They will not forgive not trying at all."