Clinton Flails Bush on Economy, Calls Him ‘Fear Monger’ : Democrats: The nominee, whose own plan calls for $220 billion in new government spending, says President allowed recession to occur and did ‘nothing but watch.’

Trying quickly to regain control of the campaign debate, Democratic presidential nominee Bill Clinton on Friday accused President Bush of being “personally untrustworthy” and a “fear monger” attempting to distort the truth to distract attention from his economic record.

Outlining his own economic plan in a speech to some 2,000 business people at the Detroit Economic Club, Clinton described Bush as a failed leader who allowed a recession to grip the nation while he did “nothing but watch” and is now trying to scare Americans in a last-ditch bid to hold onto his job.

Bush’s acceptance speech Thursday night offered only “the fool’s gold of an across-the-board tax cut in the face of a $400-billion deficit,” Clinton said.

Clinton criticized Bush in even harsher terms in comments to reporters as he and his aides specifically disputed several charges the President leveled against him Thursday night. The Clinton camp pointed to four specific claims as distortions.

Bush, for his part, continued to hammer hard at Clinton as his reelection campaign held a rally in Mississippi on Friday.

Noting that the Democrat is a fan of Elvis Presley, the President derided Clinton’s plans to revive the nation’s economy as “Elvis economics, because by the time he is finished, American workers will all be checking in to the Heartbreak Hotel. And . . . I think we ought to treat those (Clinton) ideas the way Elvis would: Return to sender! Return them to Arkansas.”

Clinton and his aides originally planned to make his Detroit speech and its focus on his economic proposals--which include $220 billion in new government spending--the centerpiece of their first day of counterattacking following the GOP convention. But in the face of several polls showing that the fierce attacks on Clinton by Bush and other GOP leaders at their convention have drawn blood, the Democrats quickly decided to move from high-toned policy to hard-edged politics.

Speaking to reporters shortly after his speech, Clinton blasted Bush in unusually blunt language.

The President, he noted, said the key question of the election should be trust. But, Clinton charged that Bush “is personally untrustworthy. How can we trust him?”

Clinton cited Bush’s broken pledge not to raise taxes, his 1988 promise to create 30 million new jobs in eight years (with his first term nearing an end, the job-creation number is only about 1 million), and what Clinton claimed were repeated distortions of his record and proposals during Bush’s acceptance speech Thursday night.

Said Clinton: “It was appalling to me that a man who has the presidency of the United States is so desperate to hold onto his job that he absolutely flew in the face of the plain truth.”

Bush, Clinton said, “is a great fear monger. That’s what they’re good at.

“It’ll work for a while,” he added, but “it’s a long time ‘til November. You can’t hide the truth forever.”

Clinton and his aides point to at least four major statements in Bush’s speech as going beyond the acceptable level of exaggeration and shading that typifies political campaigns.

* Bush said that while he had raised taxes once, Clinton had raised taxes 128 times, a charge that other GOP officials have made repeatedly over the last few weeks.

While Clinton has put through a number of tax increases in his 11 years as Arkansas’ governor, the GOP list of “tax increases” includes repeated distortions, he and his aides assert.

In one case, for example, when Arkansas increased its fuel tax, the Republicans counted it as two tax increases--one on diesel fuel, another on gasoline. In three other cases, the GOP list simply counts the same increase twice. Another “increase” Republican researchers counted was a bill extending the state’s dog-track racing season, apparently on the grounds that a longer season led to increased state revenue. Another was a law imposing a $1-per-conviction fee on criminals to cover court costs.

And using the same method of counting each individual tax separately, the Congressional Research Service estimated that Bush has increased 78 taxes in his term. Over the 12 years of Bush and Reagan--a period comparable to Clinton’s Arkansas tenure--more than 300 federal taxes have been increased as well as some 250 tariffs and fees.

The distorted nature of the 128-tax-increases charge had been documented before the GOP convention. The Wall St. Journal and syndicated columnist Michael Kinsley each wrote about the subject last week, but Republican officials have continued to use the figure.

Asked repeatedly for comment Friday on this and the other issues raised by the Clinton camp, neither the White House nor the Bush-Quayle campaign responded.

* Bush also accused Clinton of advocating the largest tax increase in history.

Clinton has proposed $150 billion in tax increases over four years, primarily on families with income over $200,000. In 1982, Ronald Reagan signed a larger tax increase--$152 billion over four years. The discrepancy is even larger if inflation is taken into account. To match Reagan’s tax increase now, a candidate today would have to propose more than $200 billion in new taxes.

Bush’s own 1990 tax increase came to $125 billion. That tax bill also included $18 billion in tax cuts, so the net effect raised taxes by $107 billion. Clinton’s plan, along with $150 billion in increases, includes some $104 billion in tax cuts--for families with children, entrepreneurs who start new businesses and companies that invest in creating new jobs. Thus, the net increase under his proposal would come to $46 billion.

* In describing Clinton’s tax plan, Bush claimed Clinton “says he wants to tax the rich, but folks, he defines rich as anyone who has a job.”

While a President Clinton might end up raising taxes on people who are not rich, he has proposed increasing income tax rates only on individuals with annual incomes above $150,000 and couples with income above $200,000--roughly 2% of the U.S. population.

Clinton has proposed one other new tax and might propose a second. Larger companies that do not provide training to their workers would face a 1.5% payroll tax to cover training programs. In addition, as part of his health reform plan, Clinton might end up imposing a new payroll tax on companies that do not provide health insurance to their workers. Those taxes might have indirect impact on workers, but they would not cover all companies.

* Bush said Clinton’s health plan would “deny you the right to choose a doctor.”

While some of his rivals in the Democratic primaries advocated a totally government-run health care system that would involve such a limit, Clinton opposed that idea. His health care plan would retain the current system of private insurance, but would require major changes in the way insurance is sold and the way the nation’s hospital system is organized in the hopes of holding down rising costs.

Money saved in that manner would then be used to finance a new program to guarantee universal access to health care, Clinton says. Although some health care experts, particularly conservatives, question whether Clinton’s program would work, he points to a similar system in Germany and in Hawaii as examples of the plan’s feasibility.

Clinton’s campaign moved quickly to bring these discrepancies to public attention. Beginning within an hour of the end of Bush’s speech and continuing throughout the day Friday, campaign aides deluged reporters with statements, press releases and annotated versions of Bush’s speech.

The move put on display the “rapid response” capability that Clinton’s senior aides consider one of their main accomplishments. That response, however, carries the price of reducing the attention given to Clinton’s policy proposals.

In addition to his health care reform--which he views as key to reducing the deficit--Clinton’s economic package includes the $220 billion in new government spending over four years that would be directed at repairing the nation’s infrastructure, expanding research and development of high-technology projects, and increased resources for eduction.

Clinton would pay for this through his tax increases, larger defense cuts than Bush has proposed and an assortment of spending reductions in other programs. Critics of his plan have charged that several of the proposed spending cuts are vague or unlikely to occur.

The day’s barbed statements served as a reminder--in case any was needed--that the 73 days remaining between now and the election will not be pretty. With Bush strategists determined to raise doubts about Clinton’s character and with the Democratic campaign equally determined to fire back in kind, voters can count on seeing repeated such exchanges in the weeks to come.

“If the President had given a standard policy address, we would have responded in terms of policy,” said Clinton’s pollster Stanley B. Greenberg. “But he didn’t. He opened the whole trust issue, and we’re going to engage on the question of trust.”

Clinton strategists believe they can turn the issue around and use it against the President.

Repeatedly in his acceptance speech, Bush called “trust” the key issue in the election.

The GOP ticket, Clinton told an enthusiastic audience in Cleveland Friday, is “gone before it gets started (in its campaign) if that’s what it’s about.”

The rally followed his Detroit speech and kicked off a three-day bus tour he and his running mate, Tennessee Sen. Al Gore, will make through Ohio, Pennsylvania and western New York.

As campaign aides rolled film for future advertisements, Clinton, Gore and their wives took turns bringing cheers from the crowd of several thousand. Later, the four ended their day speaking at a black Baptist church in Cleveland, where some 400 people crowded into the sanctuary while hundreds more filled the church basement and an adjacent gymnasium and lined the sidewalks outside to listen to speeches by the candidates through loudspeakers.

With the Democrats continuing to concentrate attention on Ohio and its 21 electoral votes, Gore earlier in the day delivered a lunch-hour speech to some 5,000 people at a rally in Toledo, where he also hit the theme of trust.

Since Bush failed to keep his 1988 promise not to raise taxes, Gore said, the President could not be trusted to solve the nation’s problems in a second term.

“How long will it take for him to come back to the American people and say, ‘I made another mistake’?” he asked.

“George Bush had the audacity to stand up there and say tax cuts for everyone--if; and then he kind of mumbled about the what if,” Gore said.

Gore referred to Bush’s caveat that tax cuts would have to be offset by “specific spending reductions that I consider appropriate.”

“Who does he think we are?” Gore demanded. “I was waiting for them to say they would promise to build all of the streets so they run downhill.”

Times staff writer David Lesher contributed to this story.