Clinton to Consider Cuts in Entitlements, Bentsen Says

The incoming Administration will consider a wide range of controversial tax hikes and entitlement cuts to curb the federal deficit, Treasury Secretary-designate Lloyd Bentsen told Congress on Tuesday.

Bentsen said that President-elect Bill Clinton, faced with a worsening deficit outlook, will consider making politically painful cuts in the growth of popular entitlement programs, such as Medicare and Social Security, that benefit the middle class, a move Washington has resisted for years because it feared a voter rebellion. Such drastic policy proposals by Clinton would require Congress to take what one senator dubbed “the vote of a lifetime” and could test Washington’s resolve to address the federal government’s budgetary problems.

Bentsen said that controversial proposals like increasing the Social Security retirement age and reducing Medicare and Social Security benefits for the upper-income elderly, while also raising income taxes will all be on the table in the Clinton Administration.

“There’s no question but that the President-elect has a commitment to cut that deficit and do it in a major way,” Bentsen said. “Time is running out. We don’t have a lot of wiggle room left before these things have to be faced up to.”

Bentsen sailed through a confirmation hearing before the Senate Finance Committee, which he chaired until Clinton chose him to head the Treasury, and his nomination was voted on and unanimously approved before the first question was asked by a senator. Indeed, the hearing took on the appearance of a love fest occasionally interrupted by substantive questions.

After the panel voted to recommend to the full Senate that his nomination be approved, the entire committee and many in the audience rose to give Bentsen a standing ovation. Bentsen, 71, was chairman of the Finance Committee, the Senate’s key tax-writing panel, for six years. The committee will now be chaired by Sen. Daniel Patrick Moynihan (D-N.Y.), who called for the vote of approval for Bentsen just 20 minutes after the hearing began.

Bentsen said that the Clinton economic agenda will stress deficit reduction as a priority, echoing a theme struck repeatedly in recent days by both Clinton and many of his economic advisers, including Rep. Leon E. Panetta (D-Carmel Valley), Clinton’s appointee to be director of the Office of Management and Budget.

In his confirmation hearings Monday, Panetta also warned that cuts in entitlement programs and tax increases will be necessary to curb the deficit and warned the nation to be prepared for pain. In fact, Clinton and his team are now sounding the same theme of fiscal sacrifice that independent presidential candidate Ross Perot voiced during the campaign--and that Clinton studiously avoided during much of the election year.

The new emphasis by the Clinton team on the deficit seems to be part of an effort to lower public expectations about the scale of Clinton’s economic program. Clinton seems to be signaling that it may be impossible for his Administration to follow through on some of his campaign promises, such as cutting the deficit in half while also offering such costly proposals as a middle-class tax cut and a short-term economic stimulus program.

While he said that President-elect Clinton has not yet made key decisions on his economic plan, Bentsen indicated that any short-term economic stimulus plan proposed by Clinton will be modest.

He also warned that Clinton would offer a “tough package” of deficit reduction, while still seeking to live up to his objectives of increasing the government’s long-term investment spending on education, job training and public works.

Yet Bentsen offered few new specifics about Clinton’s economic program, saying repeatedly that key decisions have not yet been made.

CLINTON AGENDA AT ISSUE: His shift on deficit and tax cut raises some uncertainty. A14

The Clinton Hearings

Here is a schedule of Senate confirmation hearings for President-elect Bill Clinton’s top government nominees:

TODAY

Warren Christopher, secretary of state, Foreign Relations Committee, 7-11 a.m. TV coverage: C-SPAN will air the hearing live and again at 5 p.m. PST. CNN will also air the hearing live.

Alice Rivlin, Office of Management and Budget deputy director, Governmental Affairs Committee, 6:30 a.m.

THURSDAY

Mike Espy, agriculture secretary, Agriculture Committee, 7 a.m.

Donna Shalala, health and human services secretary, Finance Committee, 7 a.m.

FRIDAY

Donna Shalala, health and human services secretary, Labor and Human Resources Committee, 7 a.m.