During his successful campaign, Bill Clinton laid out an extremely ambitious economic agenda. He promised to redress the gross inequities that had developed during the Reagan years, by shifting the tax burden back to the wealthy. He promised to increase federal funding for the infrastructure, education, and training in order to lay a foundation for future growth. He also promised a short-term stimulus to jump start the economy beyond the limp growth it was then experiencing. He promised to guarantee all Americans access to high-quality, affordable health care. And, finally, he promised to bring down the deficit. It is still very early to assess Clinton's overall economic performance, but his interim grades on meeting the commitments he set for himself are mixed. Clinton gets his highest mark in the category of fairness, where his budget presents a significant step toward reversing the tax giveaways to the wealthy of the last decade. His health-care proposal has begun a debate that is almost certain to lead to universal coverage and serious controls in the provision of health care. Unfortunately, his grades for promoting economic growth in both the short and long term are substantially lower. The reasons for this failure are not those generally given by conservatives--insufficient spending cuts and excessive tax increases--but precisely the opposite.
With the defeat of his stimulus package last spring, the immediate prospects for the economy appear much bleaker. Furthermore, the Clinton budget plan reduces the deficit too much, too quickly and fails to carry through his campaign commitment to significantly expand the government's investment in physical and human infrastructure. Clinton's "invest and grow" economics has given way to Ross Perot economics as deficit reduction has been given central stage in the Clinton program.
The wealthy pay
Since I have plenty of company in criticizing the Clinton plan, let me first emphasize its positive aspects. While the package raises over $200 billion in new taxes over the next five years, the vast majority of this sum comes from corporations and wealthy individuals. Only the gas tax, which will cost the typical family about a dollar a week, will have an impact on most middle-and lower-income Americans. While politicians and pundits have screamed about this burden at great length, most people will probably not even notice the higher gas tax unless they monitor their bills very carefully.
This shifting of the tax burden back toward the wealthy is a step toward reversing the huge upward redistribution of income that took place in the 1980s. While the economy as a whole saw weak growth in the 1980s (compared to the 1970s, and far worse by
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