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No Tax Cuts Planned for Clinton Budget

December 21, 1997|PETER BAKER and ERIC PIANIN | THE WASHINGTON POST

WASHINGTON — The White House has decided against offering any major proposals to cut or simplify taxes in its forthcoming election-year budget, gambling that it can successfully counter Republican plans by portraying them as regressive and irresponsible.

While producing their own tax-simplification formula had political appeal, senior administration officials said they kept coming back to the conclusion that there was no way to do so without increasing taxes on the middle class or derailing the plan to balance the federal budget by 2002.

"The best way for us to get a balanced budget earlier is to stay with this fiscal discipline the president has led over the last five years and resist the temptation to spend money we don't yet have," said Gene Sperling, head of the White House National Economic Council.

Rather than make major tax proposals, President Clinton and his aides probably will sit back and let congressional Republicans take the lead, on the theory that they are too divided among themselves to forge a unified approach and, even if they do, tax cuts would require unpopular trade-offs that could be exploited by Democratic candidates in the 1998 elections.

"This is an issue where we're better off counterpunching," said one top official.

White House officials said Clinton has completed the major conceptual choices in his budget proposal, which will not be unveiled until February.

Aides said the spending blueprint includes several targeted tax cuts intended to further specific policy goals, such as increasing the tax credit for child-care costs and adding incentives for energy efficiency.

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