Clinton Ready for Next Domestic Issues : Radio address: Taking credit for business upswing, the President says he will stress health care and welfare reform.

President Clinton took credit Saturday for the recent upswing in the economy and said the Administration is now prepared to go on to other key items on his domestic agenda, such as overhauling the nation’s health care and welfare systems.

In his weekly radio address, Clinton said that while the recovery is incomplete, the economy has “turned the corner,” and the government has “built the foundations for a real recovery that will endure and enrich the lives of all our people.”

He also projected that the federal budget deficit for fiscal 1995, which begins Oct. 1, would be less than $180 billion--down from more than $300 billion forecast last January before Congress passed his economic plan.

There was no immediate indication as to precisely why the budget-deficit projection is so much lower than it was a year ago, but analysts said the bulk of the reduction most likely comes from the improvement in the economy, which boosts tax revenues and cuts welfare spending.

The President’s remarks were designed to take advantage of a surge in his standing in the polls and to pave the way for him to promote his health care and welfare-revision plans in his State of the Union speech on Tuesday.

Clinton is spending the weekend at Camp David, Md., the presidential retreat, where he is said to be working on the speech.

“We’ve transformed America’s agenda, addressing problems long deferred or denied,” Clinton said Saturday. He said the debate is no longer whether to pass legislation to reform health care or welfare, but merely over what kind to enact and how rapidly to do so.

Clinton’s optimism about the economy is expected to be underscored later this week by reports that the economy grew unusually rapidly during the fourth quarter of last year, possibly at an annual rate of 6% or more--its most vigorous pace since the mid-1980s.

However, few economists credit the President’s program for the bulk of the improvement. Recent figures have shown that the pickup began before his election and has accelerated gradually ever since.

Clinton also used the radio address to say the nation will rally around earthquake victims in Los Angeles and help them get back on their feet.

“Even in this kind of adversity, or maybe even because of it, our people have become more determined,” he said. “We’ve seen neighbor helping neighbor and total strangers performing acts of quiet heroism.

“Los Angeles will come back,” he added. “Together with the people of Los Angeles, we’ll help to make that happen. That’s the American way.”

Clinton’s speech was followed by a GOP response delivered by Sen. William S. Cohen (R-Me.), who praised the President for tackling health care and welfare-reform legislation, but warned him not to “focus only on domestic affairs.”

Cohen warned that Clinton must do more to counter new pressures from the Russian military or risk seeing Moscow back in control of states that were part of the former Soviet Union.

He also said Clinton must be “equally strong” in dealing with North Korea, urging that the United States impose “enforceable economic sanctions” if Pyongyang continues to balk at complying with international inspection of its nuclear weapons program.

* GOOD NEWS DILEMMA: Brighter economic outlook could hamper agenda. A22