Top of the News
`THEY'LL VOTE FOR ME BECAUSE THEY WANT A LEADER, NOT A BOSS'
Give Bill Clinton credit for trying. Just weeks before the Democratic Convention, the Arkansas Governor has slimmed down his chunky profile, revamped his economic plan, and picked a fight with Jesse Jackson. Clinton has even dabbled with some Perot-style populism. So far, none of it has lifted the candidate's standings in the polls. But in a June 23 interview with BUSINESS WEEK's Washington Bureau Chief Lee Walczak and Economics Correspondent Howard Gleckman, Clinton showed he's still an optimist.
Q: Why are you revising your economic strategy now and backing away from the goal of a balanced budget by 1996?
A: When I began the campaign, the projected deficit was $250 billion. Now, it's up to $400 billion. I've watched the economy pick up very slowly, if at all. I hadn't cut government as much as I wanted to, and I needed to put teeth into that idea.
Q: Critics of your middle-class tax cut always felt it was low on tax relief and high on symbolism. With the recession over, why retain this measure?
A: The main portion of the middle-class tax cut for me in its present form is the children's tax credit. The idea is to provide a family allowance. We're still getting a disproportionate amount of taxes from the middle class. This is an attempt to put some fairness back in the system.
Q: You call yourself a probusiness governor, but your plan seeks $150 billion in new taxes from corporations and upper-income individuals. And it requires business participation in a costly health plan. What's probusiness?
A: We're going to spend a lot of money to give business a better-educated and-trained work force. That is worth a lot. No. 2, if the cost-control program in my plan works as I believe it will, we'll get health care costs more in line with inflation. We'll free that capital up to go back in the private sector. The investment tax credit is very good for business. For all those reasons, this is very much a probusiness plan.
Q: Some economists feel that your economic plan consists mainly of well-intentioned tinkering. Your response?
A: I don't think you can ignore the deficit, and I think cutting it by more than 50% in four years is a real step in the right direction. For people who say this is tinkering, I say this is the biggest investment program anybody's ever offered while running for President. It's more than Perot and Bush have offered--which is nothing so far.
Q: You characterize as "investment" your plan to spend $50 billion a year to "put America back to work." The Federal Reserve is likely to call it by its old-fashioned name, "spending." What will that do to interest rates?
A: There's spending, and there's spending. We're not spending this money on consumption, we're spending it on direct investment in ways that will promote jobs and economic growth. Certainly, the Fed shouldn't raise interest ratesin the face of it. There is no reason to believe that this will spark a round of inflation.
Q: You want to slash 100,000 federal employees by attrition. Why not just scrap entire outmoded agencies?
A: Federal agencies need the kind of restructuring that major corporations have undergone, which means compressing middle management, pushing decisions down to front-line workers, and using data processing instead of paper-pushing. The best companies do it by attrition, not by layoffs.
Q: When you headed the Democratic Leadership Council, you emphasized the need to control the cost of entitlement programs. Why is there no attack on social spending in your plan?
A: I decided that the real savings were in health care cost control and the reduction of poverty.
Q: You propose to raise $45 billion by taxing U.S. subsidiaries of foreign corporations. Won't other countries merely retaliate against U.S. multinationals?
A: In the U.S., foreign corporations' income has gone up dramatically in the 1980s, and their taxes have gone down. All I want to do is try to even it up a little bit...I'm not worried about retaliation. We're going lighter on them than they are on us.
Q: Ross Perot has been far less specific than you. Yet he seems to have struck a chord by vowing to mount an all-out attack on economic stagnation, government waste, and political corruption. Can your stack of position papers compete with Perotmania?
A: I have to learn to describe what I've done in those kind of terms. My plan is an attack on political corruption and on economic stagnation. The difference is, if you ask me how I'm going to attack those things, I've got an answer. He is a very gifted sound-bite politician. And he is a good salesman--that is how he made a lot of his money, selling to the government. I'm also at a disadvantage because I'm an elected official. That turned out to be a negative with people who are fed up with politics as usual. Perot says, "I'm a businessman, I have nothing to do with this," which isn't so--he's been a Washington power player for 20 years.
Q: You've tried radio talk shows and TV call-ins. You've tried satellite town hall meetings, infomercials, and 800 numbers. If you're still in third place during the Democratic Convention, put yourself in the shoes of a typical delegate. Would you back a Clinton nomination?
A: Sure...That's like saying, should GOP delegates have dumped George Bush in 1988 when polls showed he was 17 points behind? He had a sense of the underlying realities of the election, and he won by eight points. Two-thirds of the American people know we need a change in leadership. In the end, they'll vote for me because they want a leader, not a boss--somebody with a plan and a proven record. I'm on the right side of history.