April 10 (Bloomberg) -- Senator Hillary Rodham Clinton said the stability of the U.S. economy may be threatened by ``skyrocketing'' health-care costs, widening trade and budget deficits and disappearing middle-class jobs.

``The economy is working really well for many people,'' Clinton, a New York Democrat, said today. ``But if you look just over the horizon and below the surface there are some troubling issues.''

In an interview previewing a speech she will give tomorrow at the Chicago Economic Club, Clinton said, ``the rich are getting richer, everybody else is marching in place'' and ``I don't think that's good for us.''

Asked if the government should step in should General Motors Corp. go bankrupt, Clinton said the government could help by relieving some of the costs auto companies bear for retiree health care in return for getting them to ``expedite a move toward energy efficient products.''

Clinton, 58, also expressed concerns about U.S. manufacturing being able to compete in a ``race to the bottom'' with other nations over cheap labor.

`Defeatist'

``It's defeatist to think U.S. manufacturing can't compete,'' she said, citing currency manipulation and other unfair trade practices.

Clinton said ``there can't be an abrupt change'' in the exchange rate of China's yuan, which many U.S. manufacturers say is kept artificially low, giving Chinese exporters an unfair advantage. Yet, she added, ``I don't want us to be played for a sucker.''

She acknowledged that China and the U.S. are in a ``mutually dependent relationship'' because the U.S. needs China to buy its debt. ``I would much prefer that we work together on this.''

Clinton said the recent controversy surrounding the bid by a United Arab Emirates-based company to purchase several U.S. port facilities should spark a critical national dialogue on security. ``We've been very cavalier about infrastructure security,'' she said.

Under pressure from Congress, the Dubai state-owned company, DP World, said last month that it would divest itself of its U.S. operations, including terminals at six major ports.

On health care, Clinton said a new plan in Massachusetts to require everyone to have health insurance ``gives us some hope,'' though a market-based approach to pensions and health care is ``not sufficient.''

`National Conversation'

``We've got to have a national conversation about health care,'' Clinton said.

``Right now we are competing with companies in countries that do provide some kind of health care, pensions system,'' she said. ``They have a social compact for the 21st century and against companies in countries that don't provide any benefits.''

She suggested a health information technology network and assisting small businesses in providing health care for their employees through pooling resources, as well as promoting wellness and health initiatives.

Clinton said that inadequate health care coverage is part of a broader economic squeeze since Bush took over the presidency from her husband, Bill Clinton, in 2001.

``The sort of pillars of the middle class, a stable job with certain benefits if you work hard, are beginning to disintegrate,'' Senator Clinton said. ``Unemployment is 4 percent, but it was 4 percent in the Clinton administration and more people were in the workforce. So, a lot of people have disappeared from the workforce.''

Tax Debate

White House Press Secretary Scott McClellan said Democrats want to allow the tax cuts enacted under Bush to expire. ``The real debate is on taxes,'' said McClellan. ``Are we going to make tax cuts permanent and keep taxes low to keep our economy growing, or are we going to let Democrats have their way.''

Clinton sidestepped whether she thinks the tax cuts should be rolled back. ``We have to look at the whole package,'' including ``both the spending side and tax side,'' she said.

Clinton said there are ``so many loopholes'' in the corporate tax code and singled out companies that evade taxes through offshore entities. ``Even what's on the books isn't paid,'' she said. ``How many more companies can be jammed into that little building somewhere in the Bahamas that serves as the corporate headquarters for all these companies?''

She also called for a ``more robust'' research and development agenda for U.S. companies and said companies should be encouraged to ``begin to take some of these profits and these productivity gains and put it into wages.''

Clinton hasn't announced her plans for 2008, though she's the leading contender for her party's nomination, according to major national polls.

To contact the reporter on this story: Heidi Przybyla in Washington at hprzybyla@bloomberg.net.

Last Updated: April 10, 2006 16:40 EDT