Time - Man of the Year/Time_Man_of_the_Year_Compact_Publishing_3YX-Disc-1_Compact_Publishing_1993.iso/moy/122192/12219930.000

Text File | 1993-04-08 | 10KB | 197 lines

                                                                                THE TRANSITION, Page  37

Bill's Dream Team Of Supersalesmen


Clinton reassures the markets by naming Establishment figures
to top economic jobs. But the President-elect still plans
policies to prime the pump.

By DAN GOODGAME/WASHINGTON -- With reporting by Tom Curry/
New York


    A Few days after the election, Bill Clinton sought advice
from an unlikely quarter: the Bush White House. The
President-elect wanted to talk process, not personalities, so
he phoned Roger Porter, a senior Bush aide who had served on
President Ford's economic policy council. Clinton quizzed Porter
on his 1980 book, Presidential Decision Making, which
recommends, among other things, that policy be deliberated on
by a group similar to the National Economic Council that Clinton
created last week.

    The council will be chaired by the President and run from
the White House by Robert Rubin, 54, now co-chairman of the
Goldman, Sachs investment firm. In creating the group, Clinton
will fulfill his campaign promise to place himself at the center
of decisions on spending, taxes and trade, not reserve his full,
hands-on attention for the foreign policy work of the National
Security Council, the way Bush and many previous Presidents have
done. Clinton's action also signaled his intention to restrict
the power of Cabinet officers and to play them off against one
another in the manner of Franklin Roosevelt.

    Clinton's first Cabinet appointments reinforced the point:
most are old hands in Washington and on Wall Street, chosen not
for their new ideas but for their ability to sell, to Congress
and financial markets, the program of public "investment" and
deficit reduction on which Clinton campaigned. "Bill didn't want
a brain trust," a transition official remarked. "He needed a
sales force -- and that's what he's got." Indeed, Clinton, the
Washington "outsider," might be said to have created the
capital's most potent lobbying firm: Bentsen, Panetta, Rubin &
Altman.

    His choice for Treasury Secretary, Texas Senator Lloyd
Bentsen, 71, is a business-friendly millionaire who chairs the
powerful Finance Committee. California Congressman Leon Panetta,
54, named as Clinton's Budget Director, commands high regard
from his peers for his work as chairman of the House Budget
Committee. Bentsen's deputy will be Roger Altman, 47, who served
at Treasury under President Carter. Altman, an investment banker
like Rubin, knows financiers from New York to Tokyo.

    This top shelf of advisers drew applause from some
surprising corners. The Wall Street Journal editorial board
praised the team as "all-in-all reassuring." Bay Buchanan, a
conservative Republican activist, joked that "the only liberal
in the group is Bill Clinton."

    Many Democrats, however, voiced suspicion of Bentsen's
enthusiasm for granting special tax breaks to oilmen, real
estate developers and wealthy investors. Jeff Faux, president
of the Economic Policy Institute, a Washington think tank allied
with organized labor, complained that "you don't want to run
your economic policy entirely around the concerns of Wall Street
investors." Elena Hanggi from Little Rock, who trains community
organizers and is invited to Clinton's economic conference this
week, expressed "disappointment" at the pro-business slant of
his top economic advisers but remains cautiously optimistic. In
Washington as in Arkansas, she said, "Bill Clinton is trying to
make changes without making waves."

    In his second tier of economic advisers, Clinton reached
out to women and liberals and added several allies. Laura
D'Andrea Tyson, 45, a Berkeley economics professor named to
chair the President's Council of Economic Advisers, counseled
Clinton during the campaign on trade and industrial policy, and
recommends a larger role for government in directing the
economy. Robert Reich, 46, a Harvard lecturer named Labor
Secretary, has been a close friend of Clinton's since their time
at Oxford University as Rhodes scholars. Reich argues that
deficit spending is justified if it is directed at such areas
as public transportation and job training. But Alice Rivlin, 61,
the first director of the Congressional Budget Office, named
Deputy Budget Director, ardently opposes deficit spending and
advocates transfer of more government functions to the states.
Secretary of Commerce-designate Ronald Brown, 51, who helped
Clinton mend fences with black voters as Democratic National
Chairman, is a sometime lobbyist with close ties to the business
community. The corporate world is also likely to feel
comfortable with incoming White House chief of staff Thomas
("Mack") McLarty, 46. A kindergarten classmate and former
campaign treasurer for Clinton, he is chief executive of his
home state's largest utility, Arkla, Inc.

    The appointment of such deficit hawks as Panetta and
Rivlin was widely -- and probably incorrectly -- read last week
as a sign that Clinton is leaning away from additional deficit
spending early next year to stimulate the economy. To be sure,
encouraging reports on job creation and economic growth have
convinced many economists, and some of Clinton's aides, that
such stimulus is no longer neces sary. But those same re ports
have galvanized traditional liberals among Clinton's
supporters, who fear that good economic news will undermine the
rationale for new deficit spending on social programs and public
works projects.

    Before he can forgo fiscal stimulus, Clinton "needs clear
and convincing evidence that the jobs are coming back, and the
reports we've seen so far just aren't enough," Reich explained
last week. "It's not just the unemployed we're concerned about,
but also the part-timers who want to work full time and the
discouraged workers" -- those who have been looking for jobs so
long that they have given up and fallen out of the statistics.
Clinton voiced the same view, telling reporters, "We are nowhere
near to knowing that this short-term recession . . . is over."

    Clinton emphasizes that he will watch the economic
indicators through mid-January before deciding whether new
deficit spending is needed. In any case, he insists, he will
seek long-term deficit reduction as well as new public
investments in education, job training and public works. But new
spending will be easier to accomplish if it is simply borrowed
from future generations, Reagan-Bush style, rather than
painfully extracted from existing programs.

    Even some of the deficit hawks among Clinton's advisers
concede the political logic of early deficit spending. It would
be politically foolish, says an aide, to "start our
Administration on a negative note" by not only raising taxes on
the rich but also cutting spending on popular middle-class
subsidies and "creating a lot of enemies."

    This argument has a familiar and ironic ring to top
officials of the outgoing Bush Administration, which also
determined four years ago that it would avoid setting a
"negative" tone; instead, Bush decided, he would wait to cut
spending "in the second term." Clinton, however, faces higher
expectations: he was elected to "do something," in contrast to
Bush, who insisted that the economy was healing itself.

    Bruce Bartlett, a senior Treasury Department economist,
believes new fiscal stimulus is unnecessary but remains likely
so that Clinton can "look activist" and for other political
reasons. "Just as tax cuts are the glue that holds Republican
coalitions together, increased spending is the glue that holds
the Democratic coalition together," he says. "The Democrats have
promised so much, they need an excuse to spread around some
money to the people who supported them."

    But other experts warn that the Clinton team must adapt
its plans to the stronger recovery. "There's not only less
pressure for Clinton to do something in the way of net fiscal
stimulus, there's now a lot of pressure for him to start to
swing to deficit reduction," says Hugh Johnson, chief economist
at First Albany Corp. If the economy continues to improve
through January without a reduction in Clinton's spending plans,
he adds, "it would worry me and worry the bond markets. Then
we're looking at something inflexible and ideological. It would
look like we've got a tax-and-social-spending Democrat on our
hands."

    Aides to Clinton reply that the rationale for short-term
fiscal stimulus is not merely to reward backers but also to help
buy support for a long-term plan to reduce federal spending and
deficits. "If you're going to ask people to take their lumps on
deficit reduction," an adviser says, "you have to give them some
sugar along with it." Thus lawmakers who met with Clinton last
week in Washington reported that he is leaning toward a net
fiscal stimulus of at least $20 billion in 1993 unless the
economy unexpectedly rockets into much faster job growth before
mid-January.

    The test for Clinton and his team will come soon
thereafter, when they try to push spending cuts through
Congress. At their sessions with Clinton last week, lawmakers
quickly promised their cooperation. Meanwhile, however,
Democratic Senators have been lining up votes to oppose
Clinton's desire for a line-item veto or enhanced rescission
authority to reduce pork-barrel spending. Congressman John
Dingell of Michigan differs sharply with Clinton on trade and
environmental issues that must move through his House Energy and
Commerce Committee. And Senate minority leader Robert Dole, who
needs only to hold the votes of 41 of his 43 Republicans in
order to block any proposed legislation with filibusters, quips
with a wolfish grin that "gridlock isn't always such a bad
thing." This is the home team that smugly awaits the arrival of
Clinton's new team.