Candidates Resist Perot Math as They Try to Multiply Votes

WASHINGTON —  Last spring, Ross Perot ordered up an economic road map that would point the way to his cherished goal of a balanced U.S. budget. His aides prepared it. The Texan mulled it over. Then he bailed out of the race.

“He saw this plan, and he responded like the average American voter,” recalled Barry Bosworth, an economist at the Brookings Institution. “He quit.”

Now Perot is considered likely to return to the fray, with the stated aim of casting new attention on his painful prescription of tax hikes and spending cuts to fix the U.S. economy. He has faulted President Bush and Democrat Bill Clinton for failing to “face the issues”--notably the $330-billion budget deficit the government is running up this year and the $4-trillion national debt it has accumulated.

Indeed, many experts agree with Perot that Bush and Clinton are trying to sell more than they can deliver on the economy, in effect telling voters they can have a rosy future at little personal cost. The truth, the experts say, is that painful trade-offs could be lurking just around the bend, no matter which path is pursued.

Yet if a certain Oz-like quality permeates the economic pronouncements by Bush and Clinton, they are probably taking cues from an electorate that seems dubious about the need for sacrifice or the benefits it might bring, according to public opinion polls. For example, Americans still prefer the notion of spending more , not less, on popular government programs, surveys have shown.

And the budget deficit, while a troubling symbol of a fundamental governmental breakdown, remains less important to people than more down-to-earth concerns like jobs or schools or the environment, according to the polls.

From former Massachusetts Sen. Paul E. Tsongas, who liked to remind voters during his presidential campaign earlier this year that he wasn’t Santa Claus, to former Vice President Walter F. Mondale, who vowed to raise taxes in his star-crossed 1984 White House bid, politicians with austere messages have tended to get clobbered.

“There’s some willingness to sacrifice, but there are limits,” said Larry Hugick, a vice president of the Gallup Organization. “There’s a lot of resistance to cuts that would affect the middle class as a whole.”

Few analysts expect Perot to influence the campaign in a way that seemed possible earlier this year, when he galvanized a grass-roots army and then chose to stay home. And many experts say the U.S. economy is too fragile right now for the sort of drastic fix-all the Texas maverick has in mind.

Nonetheless, some observers say he still could play a useful role in the economic debate, using his position in the spotlight to prod fuller disclosure from both Bush and Clinton.

The President, for example, has embraced a hodgepodge of economic goals, some of which seem contradictory: A balanced federal budget, a spending cap on big-ticket entitlement programs, across-the-board tax cuts and big increases in programs aimed at key constituencies, such as farmers and aerospace workers. So far, he has avoided divulging just where he would make the hundreds of billions of dollars in spending cuts that would be needed to pay for all his promises.

Clinton is generally credited with providing more details than Bush, but he has been faulted for practicing his own version of voodoo economics: He promises to slash the deficit by half in four years while boosting spending significantly in key areas such as education, infrastructure and job training. Many experts say the numbers do not quite add up. The Arkansas governor seems to be relying on upbeat assumptions about economic growth and his ability to wring big savings from a bureaucracy that past presidents have found difficult to shrink.

“Can Perot force them to talk about specifics?” asked Mickey D. Levy, an economist for CRT Government Securities in New York. “The electorate needs more and deserves more. It may be late for Perot to pry out the details, but I’d like to see him try.”

Richard B. Hoey, chief economist at the Dreyfus Corp., agreed. “After Ross Perot dropped out, the quality of the economic debate between Bush and Clinton deteriorated. The sense of reason dropped. ‘Rosy scenario’ is playing a higher and higher role.”

Unlike Bush, whose campaign basket brims with unlabeled spending cuts, or Clinton, who believes big programs will spark prosperity, Perot offers a different vision: He would blast through the budget with a blowtorch.

Perot has proposed, among other things, a 10% across-the-board cut in government programs, vast new defense cuts and forced savings in everything from the use of government airplanes to the proposed U.S. space station, which he once called a “vacation home in space.”

And that’s just the beginning. Perot envisions a battery of tax hikes that would horrify mainstream politicians: A phased-in, 50 cents-per-gallon increase in the gasoline tax, higher levies on cigarettes and a heavier burden on many Social Security beneficiaries and “wealthy” workers, whom he defines as those earning more than $55,500 annually.

These and other measures could bring the federal budget into surplus in five years, according to a generally accepted analysis done for Perot with the help of forecasters at DRI-McGraw Hill in Lexington, Mass.

“The choices may be painful, but they must be plain and clear,” Perot declares in “United We Stand: How We Can Take Back Our Country,” his paperback book. “Government is not a candy store in which every group can pick from any jar it wants. This is not free money. It’s your money, and more importantly, it’s your children’s money.”

Like it or hate it, the Perot program seems graphically clear. Bush and Clinton, by contrast, have said things that remain too fuzzy to focus on clearly.

The President, for example, has recommended a cap on the overall cost of mandatory spending programs--the enormously expensive “entitlements” such as Social Security and Medicare that must pay benefits to all who qualify and are not subject to the annual appropriations process. The explosive growth of some entitlement programs, particularly Medicare and Medicaid, are the biggest contributors to the ballooning deficit.

By the Bush Administration’s calculation, its formula for capping these programs could save $294 billion over five years. The mystery: Whose hide would the savings come out of?

If the cap were applied evenly to all major programs, it would capture most of the money by curtailing runaway growth in Medicare and Medicaid. But the White House would allow the cap to be imposed unevenly, as long as the total savings came out the same.

Bush has declined to say where the budget ax should fall, except to insist that Social Security, the biggest entitlement of them all, will remain off limits.

Separately, the President has called for an across-the-board tax cut and other measures that would reduce government income significantly. He said the revenue reductions would be offset by unspecified spending cuts.

Yet as he courts key voters on the campaign trail, Bush has proposed significant new government spending, such as a job training program that would cost $10 billion over five years and the rebuilding of Homestead Air Force Base in hurricane-ravaged South Florida.

In addition, the President’s proposal to increase medical coverage for the uninsured through various incentives could cost the government up to $100 billion over several years, specialists say.

According to a recent calculation by the Wall Street Journal, there is a $440-billion shortfall between Bush’s proposals and the savings he has actually accounted for to cover them.

When faced with questions about the President’s grab bag of proposals, Administration officials have offered generalities and eschewed specifics. “We want to cut spending. We want to get taxes down,” Deputy White House Chief of Staff Robert B. Zoellick recently told an interviewer.

Administration officials like to note that Bush proposes $132 billion in spending cuts that Congress has failed to enact.

To critics, however, the vague approach is troubling: Bush’s statements reflect “gross inconsistency to the point of befuddlement,” said Henry Aaron, a Brookings Institution economist who backs Clinton.

Clinton’s economic strategy raises a different set of questions, mostly based on his perhaps overly confident expectations.

The Democrat assumes, for instance, that over four years the government could take in an additional $83 billion in income by raising taxes on wealthy families who earn more than $200,000 a year, $45 billion by cracking down on taxes paid by foreign corporations, and another $22 billion in unspecified “administrative” savings in the federal bureaucracy.

Yet each assumption requires a leap of faith. Foreign corporations with far-flung divisions are well positioned to manipulate their U.S. income figures, and no President has curtailed the entrenched federal bureaucracy to the extent Clinton hopes he can.

Overall, Clinton is counting on his ability to produce $300 billion in governmental savings over four years. That, in theory, would more than cover his plan to increase federal spending by $220 billion, including hefty investments in worker training and infrastructure, and leave money to help cut the deficit in half by 1996.

Clinton also hopes to broaden the nation’s health care system significantly, a goal that many experts say would cost as much as $40 billion per year. But the Democratic nominee says that imposing effective cost controls would allow him to implement his health care reforms without increasing the federal budget.

Budget experts are not so sanguine. They believe that Clinton’s economic agenda, in the short run, at least, might do little to reduce the deficit beyond the improvement that would come, in any case, from a recovery.

“I think in both cases, Bush and Clinton are assuming more economic growth than is reasonable, or assuming that whatever they do is going to have a lot more influence on the economy than is reasonable,” said A. Gary Shilling, a private economist in Springfield, N.J.

Would a belated entry by Perot into the presidential race add a bracing dose of reality to the economic debate?

The obstacles are formidable, as Bush and Clinton understand well. Public opinion surveys have shown a sharp division over the perceived urgency of dealing with the deficit. In a CBS News/New York Times Poll earlier this month, six out of every 10 Americans said they were not willing to pay higher taxes to reduce the federal budget deficit. Other surveys have shown even larger majorities unwilling to cut Social Security benefits for that purpose, and found that Americans would rather use savings in defense spending to help schools, the homeless and health care than to reduce the federal red ink.

“The public is naturally disinclined to make the kind of cuts Perot is talking about,” observed the Gallup poll’s Hugick. “He’d have to make a case.”

Some place the public reluctance to wage a grueling battle against the deficit on the White House doorstep. They criticize Ronald Reagan’s Administration, and now Bush’s, for generally having viewed tax increases as taboo and declining to make a balanced federal budget a genuine priority, even when the economy was stronger in the 1980s.

“There’s no way that a presidential candidate in the current atmosphere can frankly discuss the budget deficit without getting clobbered,” said Brookings’ Bosworth, who worked in Democrat Jimmy Carter’s Administration. “I think if Perot gets back in, he’ll find that out.”