Clinton Tells Students Not to Jump Gun on Economy : Recession: The President-elect, speaking at a Chicago community college, focuses on long road of recovery.

President-elect Bill Clinton used a community college in Chicago Monday to try out an updated economic message that Americans will be hearing frequently from him in the weeks to come: We’re not out of the woods yet.

“When you read that things are getting better with the unemployment rate, inflation rate, housing starts, things of that kind, that’s a good thing,” Clinton told an audience of some 150 students at Wilbur Wright Community College on this city’s northwest side. But, he warned, those improvements are merely part of the short-term business cycle.

“Underneath that,” he said, are “20 years of problems.”

“We may or may not be coming out of the recession,” Clinton said. “There are some good indicators that we are, but the long-term problems are there and that is what I have to address.”

Clinton’s statements reflect a basic dilemma that he faces: He relied on a bad economy to help him get elected. And while he would like to see improvements, he must rely on continued worries about the economy to get his programs enacted over what is certain to be fierce opposition from vested interests in Washington. In addition, of course, having defeated President Bush on the issue of the economy, Clinton would like to be able to say that economic improvements occurred on his watch, not on that of his predecessor.

With the economy showing steady signs of improvement, those factors have impelled Clinton and his aides to try with increasing diligence to focus public attention on the long-term trends of economic stagnation--and his long-term agenda to change them--rather than on talk of a short-term stimulus to help an economy that may well be moving out of recession on its own.

The emphasis on the long-term agenda will be central to the economic conference that Clinton plans to convene in Little Rock next week. Aides envision the conclave in large part as a tutorial to explain to Americans why the country needs Clinton’s agenda of raising taxes, revamping the health care system, and increasing spending on education, training and new technologies to reduce the deficit.

In answering questions from the students, Clinton provided the most detailed view since the election of how he intends to form a coherent agenda out of the many promises he made in the campaign.

Repeatedly he referred to two key proposals: His plan for a national service trust fund to let Americans finance their educations by borrowing money and paying part of it back through public-service work, and his plans to reform the nation’s health care system.

Changing the health care system is the one thing that he would do “if I could wave a magic wand,” Clinton said, reminding the students of the effect that rising health care costs have had on the ability of American companies to compete.

At the same time, the session with the students showcased a shift in Clinton’s rhetoric from the language of the campaign to the sterner realities of governing. During the campaign, Clinton struggled against his natural tendency to give four-part answers to all questions. Now he appears to have given up that fight.

And repeatedly, as the students asked Clinton for more federal money for program after program, the President-elect, mindful of the massive deficit he soon will inherit, responded with a polite version of “no.”

One woman asked if he would provide special incentives for minority students to attend college. No, Clinton said, the goal should be to make loans and scholarship funds broadly available and then recruit in minority communities. A nursing student asked about special incentives to encourage people to pursue nursing careers. No, Clinton replied, noting that nursing salaries have gone up because of shortages.

Still another noted that some of the classes he wanted to take have been canceled due to a lack of funds. Could the federal government help? he asked. “The federal government, with the huge deficits we are now facing, does not have the capacity to take over substantial funding of the community college system,” Clinton replied.

Despite that, Clinton seemed to win the student’s enthusiasm simply by having shown up.

“He could have just gone to Princeton or Yale and spoken in their auditorium. Instead he came here,” said Erika Marie Dimitrijevic, a 35-year-old mother who attends an ultrasound training program at the school. “I think he wants to get closer to the people.”

Dimitrijevic is in many ways representative of the school, whose average student is a 31-year-old woman. Roughly 50% of the 14,000 Wright students are white, while 20% are black and 30% are Latino. About 15% are women who head households.

The President-elect also used the occasion to score some points with the area’s political leaders, who were crucial in his battles to win his party’s nomination and to defeat President Bush. They will be equally important to whatever success he manages in the next four years. Clinton took time to meet with Chicago Mayor Richard M. Daley, along with Daley’s brother William, who has been touted in Chicago as a potential secretary of transportation in the Clinton Administration.

And in speaking to the students, Clinton made a point of praising their local congressman, Rep. Dan Rostenkowski, chairman of the House Ways and Means Committee, whose panel will have jurisdiction over much of Clinton’s economic and health care proposals and whose help Clinton has courted assiduously in recent weeks.

If he succeeds in changing the nation’s health care system, “it will be in no small measure because of Danny Rostenkowski’s leadership,” he said.

Later in the day, Clinton arrived in Washington and courted members of Congress by attending a reception for newly elected freshmen.

He will spend most of today on Capitol Hill, meeting with freshmen congressmen again as well as with congressional committee chairmen.

Clinton’s attempts to woo members of Congress, both the powerful and the new, are in sharp--and deliberate--contrast to the approach of Jimmy Carter, the last Democratic President, whose relations with Capitol Hill were tense and troubled. Clinton and his aides, by contrast, have taken every possible opportunity to try to bring members of Congress onto his team, an effort which is likely to include appointing several to his Cabinet.

The first of those expected Cabinet appointments are expected later this week.

As Clinton left the White House guest quarters at Blair House Monday night, en route to a party at the home of Washington Post Co. Chairwoman Katharine Graham, he was accompanied by several members of his transition team and Lawrence Summers, a World Bank economist, who is considered a possible choice for economic security adviser.

After a scheduled return to Little Rock tonight, Clinton likely will resign from the post of governor Wednesday, closing a 12-year chapter of his life. He is also expected to release new ethics guidelines for his Administration.

Researcher Tracy Shryer in Chicago contributed to this story.