Clinton’s Economic Plan Affirms Democratic Roots

By unveiling his updated plan for revitalizing the economy, Bill Clinton has settled a series of long-running arguments within his presidential campaign and made clear the ground the presumptive Democratic nominee intends to claim--that of a traditional Democrat seeking to create jobs through federal spending.

The heart of Clinton’s plan--in essence his platform for the fall--is a proposal to spend $80 billion over four years on projects such as roads, bridges, mass transit and environmental cleanup, which he would pay for by a combination of defense cuts and increased taxes on corporations and those earning over $200,000.

And that proposal, in turn, forms part of a broader attempt by Clinton to appeal to his party’s traditional urban and working-class base and to counter the growing appeal of Ross Perot’s still-undeclared independent candidacy to those voters.

Over the months that he has campaigned, Clinton has stressed several themes--from education to personal responsibility to a broad promise to “reinvent government.” Monday, however, as he hawked his revised economic plan before a convention of cash-starved mayors here, Clinton stressed a single word: jobs.

His plan would “create 1 million jobs a year for the next four years,” Clinton told the U.S. Conference of Mayors meeting. “Driving funds into your cities, it will help do the things you said you wanted.”

At the same time, Clinton explicitly accepted the fact that his spending plans postpone the goal of a balanced federal budget.

“People ask, ‘Why don’t you take all this money and reduce the deficit?’ I’ll tell you why,” he said. “We have two deficits: a budget deficit and an investment deficit.” The long-term health of the economy requires increased public investment, even at the cost of continued deficits, Clinton said, echoing arguments from several liberal economists whose works have influenced him.

Aides concede Clinton’s campaign expects to take heat from both the Bush Administration and the Perot campaign over its acceptance of continued deficit spending. Indeed, within hours of the plan’s release, White House spokesman Marlin Fitzwater was saying Clinton’s platform “basically gives up on balancing the budget.”

Clinton also drew fire from Housing Secretary Jack Kemp, who spoke to the mayors earlier in the day. Kemp blasted Clinton’s proposal to raise some taxes. “I noticed that Bill Clinton was talking about spending money and . . . raising taxes,” Kemp told reporters. “We’re talking not about big spending programs. We’re talking about cutting taxes.”

Within Clinton’s campaign, several advisers have argued that for political reasons, whatever economic plan he produced had to show a balanced budget by the end of his first term. Clinton, however, eventually rejected that position, believing that the fact neither Bush nor Perot has yet come up with a balanced-budget plan should limit the political harm.

At the same time, said one longtime Clinton adviser, “what the people want to hear is not ‘balanced budget.’ What they want to hear is that you’re going to get the government working again.” Voters will accept the idea of deficits so long as they see the money being put to good use, the adviser argued.

That was certainly the case among the mayors, who generally gave Clinton’s plan a warm reception.

Atlanta Mayor Maynard Jackson led a delegation of his colleagues in a news conference that resembled a pep rally after Clinton spoke.

“Bush does not care; Perot does not know,” Jackson said during the news conference. “But Clinton has got his eye on the future of America.”

Sharpe James, the bombastic mayor of Newark, N.J., said he had met “eyeball to eyeball” with each of the presidential hopefuls. “One has a plan,” he said of Clinton. “One talks about one America. One talks about empowering the people of the cities. We have a man with a plan.”

Boston Mayor Raymond L. Flynn, the outgoing president of the conference who met earlier this month with Perot, predicted the group of predominantly Democratic mayors would embrace the Clinton proposal. But, he added, the mayors should wait until they hear more from the other candidates.

“I think the national campaign just began today,” he said in an interview. “As far as I’m concerned this is the first substantive issue that’s on the table now in this presidential campaign.”

Clinton’s plan reflects weeks of intensive debate within his camp. The debate covered specific issues, such as the deficit and the proposed middle-class tax cut, which Clinton drastically scaled back, but also the broader question of how to position the campaign for the fall.

The eventual product reflects the views of several longtime friends and advisers, including Robert Reich, a Harvard professor; Ira Magaziner, a Rhode Island businessman and economic consultant; Derek Shearer, an Occidental College professor; and Rob Shapiro, a senior staff member of the Democratic Leadership Council, which Clinton once headed.

At the same time, Clinton has hired several new key staff members, including Gene Sperling, a former top economic adviser to New York Gov. Mario M. Cuomo, who did much of the detailed economic work for the new plan, and speech writer David Kusnet, who recently wrote a book arguing that to win in the 1990s, Democrats need to appeal to working-class people.