Fiscal Plan's Credibility Is Key to Clinton Success

DURING the presidential campaign, Republicans tried hard to paint Bill Clinton as too untrustworthy to hold high office. They failed. But now the "trust" issue may be rearing its head again - and even some Democrats are concerned that President Clinton could be damaged by inconsistencies in his economic plan.

A public opinion survey conducted by Republican pollster Ed Goeas and Democrat Celinda Lake for U.S. News & World Report magazine shows that only 39 percent of the public believes Clinton is "good" or "very good" about keeping his promises, while 48 percent rated him negatively on this score. Those surveyed were almost evenly split over whether Clinton's economic program "showed leadership" or reflected "broken promises."

Poll takers say the credibility concerns focus on two related issues: Does Clinton's economic plan violate his campaign promises to cut middle-class taxes and not to boost the gasoline tax? And was the plan presented in a misleading fashion that played down tax hikes while exaggerating spending cuts?

Samuel Popkin, a professor at the University of California at San Diego who did polling for the Clinton campaign, says that concerns about whether Clinton's budget numbers add up might ultimately be more damaging to the president than whether he broke campaign promises.

"What's critical is that this should be a plan he can stand up and be straight about - a plan with no games and no evasions," Professor Popkin says.

To counter charges of fiscal sleight-of-hand, the Clinton administration has used budget numbers generated by the Congressional Budget Office. In the past, many presidents have relied on overly optimistic figures from the Office of Management and Budget.

"The press has not gotten the point about how important it is that Clinton has used straight numbers.... That inspires trust," Popkin says.

But the jury is still out on the plan. Among the key debates:

* What will increased taxes, and especially the energy levy, cost ordinary Americans? Clinton says higher taxes will hit only families earning more than $30,000 a year and that the energy tax will cost them $200 annually. But critics insist that, once indirect costs are added, the energy tax might cost families up to $500 a year. They also point out that Clinton has redefined "income" to include fringe benefits and the imputed rental value of a home. Under the definition of pretax income used by the Inte rnal Revenue Service, the tax bite will affect families earning only $20,000 in cash annually.

* What is the relationship between taxes and spending cuts? The administration says its budget contains a rough balance between them. But Republicans say that the only way to achieve that one-for-one claim is by counting $30 billion or $40 billion in fee or tax increases as spending reductions, and by not counting new spending that offsets planned budget cuts.

* How much will the Clinton program reduce the deficit? Administration officials originally claimed their plan would cut the deficit by $500 billion over four years, a figure that ignored planned stimulus spending. Then they said the economic package would deliver $325 billion in deficit reduction. Now, in response to a Los Angeles Times report, officials concede the lower figure may be inflated because it does not take into account the cost of the ongoing savings-and-loan bailout, which is expected to b e $15 billion to $25 billion.

The question is: Does anyone care? These are complex budget details not readily accessible to the average person. Defenders of the Clinton administration contend the public will overlook these matters and focus on the larger picture.

"The US people are not going to be sitting around with some promise book, saying he [Clinton] missed a little here or there. They'll be looking at whether he's doing what he set out to do," says Rep. Richard Gephardt (D) of Missouri, the House majority leader. He adds that Clinton has made a good start in focusing on the economy, the deficit, and health care.

But some Bush administration veterans are not sure Clinton will get off so easily. They remember the heavy price former President Bush paid for breaking his no-new-taxes pledge.

"Clinton has a real problem," says William Kristol, one-time chief of staff to former Vice President Dan Quayle. "Just as inside-the-Beltway wisdom underestimated how damaging Bush's breaking of the no-new-taxes pledge would be, people here underestimate the risk to Clinton of walking away from the middle-class tax cut and walking into a tax increase."

Ultimately, analysts say, the administration's best defense against the charge that it has misled voters about its intentions is to create a robust economy and reduce the federal deficit.

"If the plan works, people will think breaking promises was worthwhile," says Ms. Lake. "If the plan fails, voters will remember the broken promises."