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Clinton Hedges on Deficit Cuts; Aides Aggressively Lower Expectations

January 11, 1993

LITTLE ROCK, Ark. (AP) _ President-elect Clinton, in an interview released Monday, hedged his pledge to halve the deficit in four years, blaming a bulging debt he said was forcing him to look for deeper spending cuts and quicker ways to curb health care costs.

″The deficit has got to be dealt with because it will paralyze the ability of our country to deal with other problems - emergencies abroad, needs at home,″ Clinton said in the PBS interview. ″So it’s got to be dealt with.″

The interview was broadcast nine days before Clinton takes office, and as senior aides aggressively tried to lower expectations for a new administration that has promised sweeping change in Washington and is clearly worried that voters expect immediate delivery. Clinton appeared to have much the same goal in mind.

″The deficit is much bigger now than it was when I said that,″ Clinton said of his pledge to cut the debt in half. Still, Clinton promised to erase $145 billion in red ink over four years - the amount he once thought would halve the debt - and said he hoped to erase even more.

″We’re going to have to cut more in other places than we would have thought,″ Clinton said, offering no specifics. ″And we’re going to have to move more aggressively on the health care front.″

To that end, Clinton huddled with health care and other advisers in Little Rock to begin the process of drafting the universal health care plan he has promised to submit to Congress within 100 days of taking office.

During the campaign, Clinton offered a framework but no formal health care measure, and aides say even the most basic questions remain unanswered, from how fast to phase in universal coverage to what would be mandated in a minimum-benefits package.

While health care was the topic of Clinton’s meeting in Little Rock, the president-elect’s choice for budget director was in Washington raising the prospect of major changes in Clinton’s economic plan, from delaying or ditching his call a middle-class tax cut to tax increases and unpopular spending cuts.

″Everything is on the table,″ Rep. Leon Panetta told Congress at his confirmation hearing.

Exhibit A in the Clinton camp’s effort to lower expectations was President Bush’s final budget showing a big jump in the federal deficit. The Clinton aides dismissed critics - including campaign rival Ross Perot - who said the bad news should not have come as a surprise and suggested Clinton aides were feigning their outrage.

″Let’s not be naive. ... If you believe that, then you believe in the tooth fairy,″ Perot said in Dallas.

″The truth is that the deficit numbers have deteriorated significantly,″ countered Gene Sperling, a senior Clinton economic adviser. ″When the deficit gets worse, everything is going to be harder.″

Clinton advisers also said plans for his first 100 days in office were not as ambitious as suggested in news accounts.

″We never said we would have a 100-day package. Never. No way,″ said Clinton spokeswoman Dee Dee Myers. ″One hundred days is arbitrary.″

In a June television interview, however, Clinton promised ″an explosive 100-day action period. ... It will be the most productive period in modern history.″

Candidate Clinton pledged to submit his economic plan immediately upon taking office, offer his health care legislation in the first 100 days and quickly push other major initiatives such as campaign finance reform and his national service program.

Communications director George Stephanopoulos said Clinton would meet his health care timetable. But even as Clinton huddled with Vice President-elect Al Gore and an array of policy advisers to discuss health care, his promise to give Congress his economic plan early fell by the wayside. Panetta, Clinton’s pick to head the Office of Management and Budget, told senators Clinton would not submit his package until February.

The delay reflects the uncertainty in the Clinton camp over how much his plan needs to be rewritten because of the new deficit numbers and changing economic circumstances.

″We’re looking at everything and every component of the economic package,″ Stephanopoulos said. One element, Clinton’s promise of a modest middle-class tax cut, will have to take a back seat to deficit reduction, Panetta said.

Senate Republican leader Bob Dole has said such a retreat would equal President Bush’s tax flip-flop.

″That is just silly,″ Stephanopoulos said. ″We’re committed to tax fairness and President-elect Clinton will continue to work for tax fairness throughout his administration. But he was very careful throughout the campaign not to make ‘Read my lips’ pledges.‴

The debate over the impact of the higher budget deficit - and whether Clinton should have been aware of the problem - began last week after Bush Budget Director Richard Darman raised his deficit projections substantially over the next six years.

Clinton advisers say Congressional Budget Office projections issued in August alerted them that the situation was worse than Darman’s earlier figures but said there was still a ″$50 billion to $60 billion surprise″ in Darman’s new numbers.

″It is going to require some more difficult choices,″ Sperling said.

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