Clinton Cranks Up Long-Idled Economic Engine : Advisers: Democratic budget experts may be a bit rusty. Many last held government posts under Carter.

It was an unannounced meeting, bringing together the leading economic advisers from the Bush and Clinton camps for the first time since the election.

Early last week, Robert B. Reich, director of economic policy for President-elect Bill Clinton’s transition team, sat down for a 2 1/2-hour breakfast meeting with Richard G. Darman, director of the Office of Management and Budget in President Bush’s Administration.

Reich had requested the session with his old colleague from Harvard University’s Kennedy School of Government to glean his insight and knowledge of the Byzantine federal budget process. Although Reich is no expert in the budget’s intricacies, he assured Darman that the transition team had several experienced budget analysts backing him up.

But the budget experts he named with executive branch experience all dated from the Carter Administration. They had been out of power during the 12-year Reagan-Bush era, a time when the budget process had changed dramatically.

Not since the Republicans regained the White House in 1952 after 20 years of Democratic rule has one party returned to power after such a long absence. The gap presents a problem: Executive branch Democrats appear rusty at operating the levers of power.

They will no doubt shake off the rust once Clinton takes office, and they will be aided by a friendly, Democratic-controlled Congress, which is full of policy experts ready to help. But after 12 years in opposition, the party no longer has an extensive base of young and mid-career government experts with lengthy experience in the executive branch.

Few of Clinton’s advisers are old enough to have worked for any Democratic President other than Jimmy Carter, and that was so long ago that most served then at relatively junior levels.

That partly reflects Clinton’s tendency to rely on non-traditional economic advisers rather than mainstream professional economists.

In fits and starts, Clinton’s economic team for the transition is finally taking shape. As the transition’s economic policy director, Reich, a lecturer at the Kennedy School of Government, has been able to pick and choose from a vast pool of experts to handle a wide range of economic issues.

But apart from a sprinkling from Wall Street, many of advisers have been drawn from universities, congressional staffs and think tanks--the havens for exiled Democratic policy experts throughout the 1980s.

Few in the inner circle can boast of much executive branch experience. Reich himself last served in government as a staffer at the Federal Trade Commission during the Carter years.

Wall Streeter Roger Altman, another key adviser on tax and budget policy, last served during the Carter Administration as an assistant secretary of the Treasury, but former Carter Administration officials say he was not a major player then. “I don’t even remember him,” says one former Carter White House economic policy maker.

What’s more, the Clinton economic team has so far been dominated by advisers who are not professionally trained economists, which has raised some questions among economists about how quickly they will come to grips with the detailed number-crunching side of the government’s economic apparatus.

The transition’s economic team is also not deep in expertise in international economics. More trade and international analysts are being brought in, but so far issues like aid to Russia are being addressed by the foreign affairs transition group, rather than by international experts on the economic team. That seems to run counter to the idea Clinton expressed during the campaign that he would view international issues through the prism of domestic economics.

“I don’t have a sense of an enormous team of international financial experts,” said one prominent international economist. “I suspect it will emerge, but it hasn’t yet.”

Clinton’s senior team includes political-economic policy specialists like Reich, and other such non-traditional economic advisers as business consultant Ira Magaziner and Derek Shearer, an Occidental College urban planner and Clinton friend.

The rise of the non-economists on Clinton’s team--and the limited influence of academic economists during the transition--has spawned a streak of professional jealousy among economists. Much of it has been aimed at Reich, whose broad themes on economic and competitiveness issues have been embraced by Clinton, his longtime friend.

In his work, Reich emphasizes the need for greater investment spending by the federal government in job-training and education, as well as on the nation’s public works.

He argues that in a global economy, when corporations can freely move money and factories from one continent to the next, governments can do little to force companies to stay within their borders. So instead, a nation should invest in its assets that are not mobile: its people and its public improvements.

During the Reagan-Bush era, Reich adds, the government neglected those resources, and so now Clinton must address the nation’s “investment deficit,” which Reich argues is just as severe as the budget deficit.

Reich’s success in publishing his ideas in well-received books has sometimes gone down hard with economists.

“He is an idea man, but he doesn’t do the detailed work to back it up,” says one Harvard economist.

However, the supply-side economists who surrounded Ronald Reagan in 1980 were dismissed at the time by mainstream economists as well. Many of them were also not rigorously trained economists. Only later, when Reaganomics swept Washington, did the economists join the bandwagon.

Lately, Reich’s team has begun to reach out to prominent economists. A significant addition to the transition’s economic team has been Lawrence Summers, the chief economist for the World Bank and an economic adviser to the Michael S. Dukakis presidential campaign in 1988.

Summers, on leave from Harvard’s economics faculty, is one of the most prominent young academic economists in the United States. He has been brought in to work with Altman on broad issues such as tax and budget policy.

Summers’ newly prominent role and his longstanding personal ties to both Reich and Altman have convinced many that he is now the odds-on favorite to become the chairman of the Council of Economic Advisers.

In fact, as Clinton begins to fill his Cabinet and other senior economic policy-making posts, he seems certain to turn to well-known figures for many key jobs.

For Treasury secretary, for example, the top economic policy job in the Administration, Clinton appears to be considering Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.), Goldman Sachs investment house co-chairman Robert E. Rubin and former Federal Reserve Board Chairman Paul A. Volcker.

For budget director, Alice Rivlin, the former director of the Congressional Budget Office, appears to have an inside track, but House Budget Committee Chairman Leon E. Panetta (D-Carmel Valley) is said to be the favorite of Democratic leaders in Congress, including House Majority Leader Richard A. Gephardt.

Reich is widely expected to remain one of the most influential economic policy-makers, whatever post he assumes. Many expect that he will ultimately head Clinton’s new Economic Security Council.

It remains unclear, even to those involved in the process, whether many advisers in the transition will emerge with highly influential jobs in the Administration.

“You’ve got to think of this period as the end game of the campaign” rather than the start of the Administration, says one Clinton adviser.