Clinton Hopes Security Blanket Will Help U.S. Confront Change : Presidency: He seeks to convince the public that trade shifts and other risks are worthwhile if Americans are protected from potential ill effects.


Security was the first principle President Clinton laid out when he introduced his proposal to guarantee health insurance for all Americans.

But only a few days earlier, kicking off his campaign for passage of the North American Free Trade Agreement, he frankly acknowledged that he may never entirely alleviate the insecurity millions of Americans feel about something even more fundamental than health care: their economic prospects in a global marketplace that relentlessly puts their jobs and standard of living at risk.

The two episodes reflect what is emerging as the central goal of Clinton's presidency: creating a new system of government programs and guarantees that will give working Americans the sense of personal security they need to face the challenges of economic flux and change.

In essence, Clinton hopes to persuade a still-skeptical public that taking such steps as lowering trade barriers is worth the risk--so long as government protects individuals and families with a ladder of opportunities above and a platform of assured benefits beneath, such as health care and job training.

"What Clinton is saying is government has to intervene to allow people to have an essential level of security so they can better cope with change," said Stanley B. Greenberg, the President's pollster. "We are talking about broad-based security--something essential for everybody so they can deal with a changing world as individuals and that we as a country can deal with a changing world."

As Clinton put it in a speech to the AFL-CIO Monday: "We have to struggle to redefine a new balance between security and change in this country, because if we're not more secure, we won't change."

The President's developing line of argument constitutes a characteristic effort to thread a third way between populists who oppose the lowering of trade barriers and conservative free-traders who minimize the need for programs to assist Americans displaced by plant closings, corporate downsizing and technological change.

As the new health care blueprint illustrates, the Clinton approach assigns ultimate responsibility to government but gives the private sector and market forces a prominent role in achieving the desired ends.

Administration speech writers are stretching the security theme over everything from personal security (crime reform) to secure borders (immigration).

But at the idea's core is an effort to grapple with an imposing economic question: To what extent can government--at a time of extremely limited resources--replace the security many Americans got from long-term employment with the nation's industrial giants in the era when the U.S. economy stood unchallenged?

"The old ideal of job security being attached to a particular job and a particular employer is essentially gone," said Douglas Ross, the assistant secretary of labor for employment and training. "All of us are now in a condition where, if we want to be successful, we have to manage our employment lives ourselves. And clearly we are not in a situation, in most communities, where we have systems in place to enable people to do that."

The political and fiscal hurdles to building a new platform under the broad middle class of workers, either through government programs or mandates on employers, are formidable. Finding the money to expand and reform job training alone has stymied the Administration for months.

Moreover, Administration officials are still working to define the precise components of such a new system of benefits, as are other thinkers in the Democratic Party, such as Sen. Bill Bradley (D-N.J.), who plans to deliver a major speech outlining his "Economic Security Platform" Thursday.

But within the Administration, the intellectual argument for an economic security initiative is clearly taking shape.

In essence, Clinton maintains that it is counterproductive for the United States to try to resist the trend toward integration of the global economy by opposing such things as the North American Free Trade Agreement or other measures that expand trade. Regularly over the last two years, Clinton has argued that a "rich country only grows richer by expanding its economic contacts beyond its borders."

At the same time, Clinton has admitted frankly that this acceleration of global competition is closing the book on the era when America's economic preeminence virtually guaranteed even low-skill workers a lifetime of secure employment and rising living standards.

"No person running for office can reasonably promise to make the American economy the way it used to be," Clinton has said. "No one can repeal the laws of change, which now dictate that the average 18-year-old American . . . will change work eight times in a lifetime."

Increasingly, Clinton is focusing on constructing programs that ease the unavoidable transitions and reduce the anxiety workers feel about them.

Administration officials argue for such programs on grounds of not only fairness, but also economic efficiency. The economy's flexibility will be improved if workers feel secure about shifting toward new opportunities, they believe.

"The question is: How do you reduce the anxiety, give people more sense of security but add to the mobility and fluidity and flexibility of society?" Labor Secretary Robert B. Reich said.

Though still coming into focus, the Administration's answer to that question centers largely on assuring workers a floor of guaranteed benefits in three areas:

HEALTH: Clinton's proposal to guarantee Americans universal health care is the centerpiece of his economic security agenda. Guaranteed health care, Administration officials maintain, eliminates a major fear of unemployment and a significant barrier to worker mobility by allowing workers to shift jobs without fear that they would be denied coverage because of pre-existing illnesses.

TRAINING: Current job training programs serve only a fraction of the 2 million workers estimated to be displaced from their jobs every year. Only workers displaced by a handful of specific factors, such as compliance with the Clean Air Act or foreign imports, can qualify for aid.

The Administration is now drafting legislation that would greatly expand the availability and scope of federal job training. Under the plan, which is expected to be announced later this fall, job training would become an entitlement for any displaced worker--defined broadly as anyone who loses a job and is unlikely to be rehired, officials said.

The Administration wants to provide extended income support for workers engaged in long-term retraining, a substantial expansion of existing unemployment insurance benefits, they said.

Also, in the education reform bill pending in Congress, the Administration proposes to establish national skill standards, a uniform certification that could make it easier for workers to market their skills to new employers.

And this year Congress greatly expanded a proposal initially pushed by Bradley and adopted by Clinton that would allow any American, at any point in his career, to borrow money for college or training school and pay it back as a percentage of his income over time.

PENSIONS: Earlier this week, the Labor Department proposed legislation aimed at increasing pension security by requiring employers to provide money for underfunded pension plans more quickly.

Bradley and some others in Congress want to go further to increase the "portability" of pensions by making it easier for workers to retain benefits when they switch jobs.

It is uncertain, though, how much security all of these changes would provide for workers whose jobs may be at risk in coming years. Retraining has not proven a panacea. As the Congressional Budget Office reported in a recent study, one of the two principal programs for retraining displaced workers has never been evaluated and the other has not been found to increase average earnings or the likelihood of re-employment.

The Administration is struggling to fund its job training initiative, particularly the roughly $1-billion estimated annual cost of providing income support for those in long-term retraining programs.

"The income support piece is unclear," one senior Administration official said. "Cost is the issue."

For some liberals, a bigger hole in Clinton's strategy for "making change our friend" is his failure to make much progress on a public investment program to encourage the development of new well-paying jobs to replace lower-skill jobs lost to foreign competition.

Congress has substantially scaled back Clinton's campaign vision of massive public investment to educate American workers and create new high-wage jobs for them through technological advances--though the Administration insists that it will continue to push for more dollars.

From the other side of the ideological spectrum, some analysts said they fear that the Administration may be drifting toward an American version of the expensive European security blanket, which many there now consider a prime cause of the Continent's economic stagnation.

Without policies in place that reduce the insecurity Americans feel about the changes in the world economy, Clinton faces an extremely difficult vote on the free trade agreement in the House. But however Congress votes on the measure, the strains on jobs and wages are unlikely to diminish.

Most economists, in fact, consider the impact of further opening to Mexico a relatively minor component of the overall pressure that American workers will face over the next decade from technological advancement, corporate downsizing and the continued integration of the world economy.

"You will have over this decade 350 (million) to 400 million Chinese earning a couple bucks a day integrated into the world economy. . . . You will have Eastern Europe integrated," said Kenneth S. Courtis, the Tokyo-based senior economist for Deutsche Bank Capital Markets. "Clinton's right that you can't go back. It would be like trying to put your finger in the dike."

But unless Clinton can convince Americans that they will not be swept away in the race to the new world economy, going forward will not be easy either.

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