Anybody for Tennis?

DAVID STOCKMAN, Ronald Reagan's budget chief, in the early 1980s forecast $200 billion federal budget deficits "as far as the eye can see." It didn't pan out quite that badly. The deficit slipped to around $150 billion for a few years before recession and faster spending pushed it back above the $200 billion mark in 1990. But all that red ink has gradually caused Americans to see red - they most decidedly want the deficit down.

So, when President Clinton proposed his plan to shrink the deficit from a projected $332 billion this fiscal year to $206 billion in fiscal 1997, it got three cheers. More than 70 percent of citizens approved, even though the program calls for new energy taxes that reach down to the lower middle class, as well as the boost in income taxes for the more prosperous. In fact Congress is under pressure to cut spending further.

According to the administration's count, the program calls for $246 billion in revenue increases and $247 billion in spending cuts from the fiscal years 1994 to 1997. But the plan also includes $109 billion in increased spending (or investment, to use Clinton's terminology) on education, highways, and other public works, and $60 billion in tax incentives for business to encourage it to expand and invest. So the numbers work out to $138 billion in net spending cuts and $186 billion in net tax increases.

In a way, it takes some chutzpah for President Clinton to maintain that a program involving major tax increases and spending cuts will stimulate the economy. Most economists maintain that such measures should dampen growth. Consulting economist Arnold Moskowitz notes that as soon as 1994, the net fiscal drag on growth will be $55 billion or 0.9 percent of total national output. He predicts slow economic growth ahead.

Clinton is counting on the early extra spending on infrastructure to keep the expansion vigorous enough to absorb later fiscal blows without harm. He's also anticipating that lower long-term interest rates will give consumers and businessmen the extra wherewithal to continue their spending plans. Lower interest rates, though, also mean lower incomes for debt owners.

The program's success is not a sure thing. But there are no easy choices for the White House. Basically, the administration needs monetary support from Alan Greenspan at the Federal Reserve for lively growth in output and jobs. It's no wonder Hillary Rodham Clinton invited him to sit with her during the president's economic address. Maybe if the president invites him to play tennis, interest rates will go down another one quarter of 1 percent.