NEWS ANALYSIS : Plan Aims at New Coalition for Democrats

The battle now joined over President Clinton’s economic plan would be vast even if all that hung in the balance were the future of tax rates and spending levels for government programs.

But at stake is far more: The plan Clinton unveiled Wednesday represents nothing less than an effort to use government policy to forge a new political coalition--one that would give the Democrats a solid political majority for the first time since the battles over civil rights and the Vietnam War destroyed the old Democratic coalition forged by President Franklin D. Roosevelt more than half a century ago. To do that, Clinton would begin by combining the 43% of voters he won in November with some significant share of the Americans who voted for independent candidate Ross Perot.

The task is one Clinton already had in mind half a year ago, when he spoke in an interview with The Times about the mistakes of the last Democratic President and how he would frame his own economic policies to avoid repeating them.

Jimmy Carter “had a lot of great ideas for community economic development, community-based welfare reform and other things, but they never got to try it out,” Clinton said. “Because he had to or chose to, whatever, (Carter) adopted certain austerity policies . . . (that) wound up disappointing a lot of his blue-collar base on economic issues,” he said.

The implication of Clinton’s comments was clear: The former President had lost sight of the first rule of American politics--that a successful President must use policy not only to address national problems but to build up his electoral coalition. The future President indicated that he would not repeat that mistake.

Clinton has come to office at a time of unprecedented political flux, with both major parties struggling to redefine themselves for a new post-Cold War world.

Given that, “Clinton has an opportunity to impose a definition on the Democratic Party,” said Curtis B. Gans of the Center for the Study of the American Electorate. The economic plan has become the first major initiative in his effort to accomplish that.

But building a lasting coalition is a tricky matter that only a few presidents have accomplished. In this century, Roosevelt forged the classic Democratic coalition that survived from his reelection in 1936 until the late 1960s and Richard Nixon created a Republican coalition that was strengthened by Ronald Reagan but collapsed under George Bush.

“It’s a delicate balancing act,” said University of North Carolina professor and Roosevelt biographer William Leuchtenberg. “You have to win new voters and at the same time hold onto and expand your base.”

That need to accomplish two goals at once helps account for the two-pronged nature of Clinton’s economic plan--at once seeking to cut the deficit and at the same time increase government spending on selected programs--said Samuel Popkin, a political science professor at UC San Diego and an adviser to Clinton’s campaign.

“The old blue-collar coalition can’t get you past 40% any more,” Popkin said. “Democrats must bridge blue-collar and white-collar concerns.”

Bridging the gap, Clinton’s advisers believe, requires two major changes in course.

The first almost certainly will receive the lion’s share of the attention in the debate over the next few weeks: Clinton’s move to increase taxes on those Americans with incomes over $100,000 annually, the group that gained the greatest benefit from tax cuts under Reagan.

“Eighty percent of the Democrats will like this plan,” predicted Clinton’s chief legislative strategist, Howard Pastor. “It’s progressive, dramatically so.”

While some advisers pushed notions--such as a cut in Social Security benefits--that would have cut directly at the heart of the Democratic coalition, Clinton quickly rejected them.

“Anyone who knew Bill Clinton knew as soon as they heard that idea that he would never accept it,” said one senior adviser. “Politically, it just didn’t make sense.”

Instead, Clinton produced a plan that leans heavily on tax increases and is aimed primarily at the wealthiest Americans--the roughly 5% of U.S. households with incomes over $100,000--while increasing spending on programs that are likely to increase jobs and wages for moderate-income working Americans, particularly those in families earning under $30,000 per year.

The plan is in some ways the mirror image of Reagan’s 1981 budget, which cut taxes on the wealthiest Americans--a group that predominantly votes Republican and traditionally has formed the core of GOP support--and increased spending on defense programs, helping to solidify his party’s appeal in Sunbelt states with large defense-related industries.

Clinton aides concede that they will face strong opposition to those tax increases. Even though families with incomes over $100,000 a year form a small percentage of the total American population, they indisputably have a disproportionate impact on the political system, both in terms of their capacity to contribute to political campaigns and in their ability to devote time and effort to influencing the political process.

Moreover, the plan increases taxes at least somewhat for many more Americans--including those with family incomes as low as $30,000 a year.

But White House strategists hope to put Republican opponents of Clinton’s plan in a vise by requiring that any amendments to the plan be “budget neutral” and offer new spending cuts to offset any tax increases members of Congress want to avoid.

That plan could put the GOP in the politically difficult position of appearing to defend the privileges of the rich and “force the Republicans to wear a uniform that doesn’t sell in Levittown. It’s a uniform that says: ‘Park Avenue and Palm Springs and not you,’ ” said Kevin Phillips, an iconoclastic Republican strategist who has argued for several years that the economic changes of the 1980s were undermining the GOP coalition and providing a new opportunity for Democrats.

But because of changing demographics and the size of the deficit he inherited, Clinton cannot simply practice the sort of politics described in the quotation long-attributed (although falsely) to Roosevelt’s aide Harry Hopkins: “Spend and spend, and tax and tax, and elect and elect.”

Instead, Clinton plans to pursue a second change in course as well--increasing government involvement in the economy in ways that he and his advisers hope will spur long-term gains--not only in overall economic growth but in wages as well.

Conservatives, of course, will argue that government can help the private sector best by simply staying out of the way.

However, more liberal economists, including those who advise Clinton, dispute that notion.

The real economic problem of the 1980s, argues Frank Levy, professor of urban economics at the Massachusetts Institute of Technology, is that even during years in which the economy grew, wages stagnated. Living standards continued to increase only because more and more people entered the labor force and more households had two wage-earners. “But by the end of the 1980s, those mechanisms to increase living standards had played out,” he said.

Levy and other economists argue that government policy can begin to move wages upward again by channeling money into education, training and the overall health of the work force. But, he concedes, “it’s a much harder problem” than the one that confronted Roosevelt and his successors--”the problem of getting to full employment.”

Promoting His Plan

President Clinton will take his plan to the American people beginning today with a trip to St. Louis. He’ll also be in Chilllicothe, Ohio, today and Hyde Park, N.Y. on Friday. On Sunday, he’ll fly to California--Los Angeles and the Bay Area--for two days.