How Much Would Perot Plan Help? : It’s strong medicine--but is the timing right?

Is Ross Perot using his deficit-cutting plan to leverage a comeback to the presidential campaign? Very possibly--but his happy-trails talk-show banter often avoids candor about all the necessary sacrifices and unpleasant trade-offs in his approach to deficit reduction.

Make no mistake--his is a real plan, but it would be a very painful one. The questions are: Is it politically realistic--and is the economic timing right? The answer on both counts is “not now.�

The single-minded, no-nonsense goal is to wipe out the budget deficit by 1998. That means hefty tax hikes and painful spending cuts. Nothing is sacred. Among his proposals: Taxes would go up on Social Security benefits paid to the affluent elderly, who would also make higher payments for Medicare. Tobacco and gasoline prices would go up a lot; the tax rate would rise for top income earners, and a $250,000 cap would be slammed on the maximum mortgage eligible for interest rate deductions.

It’s not surprising, then, that Perot unveiled all this only after he bowed out of the presidential race in July. In better times, many economists believe, Perot’s plan might be both desirable and doable--policy-makers have been recommending many of the proposals for years. But in today’s stumbling economy, the blueprint appears too Draconian, squelching what little economic growth there is now.

In the face of a new batch of unsettling economic data, the Federal Reserve is said to be contemplating another round of interest rate cuts. But because ever-lower interest rate cuts have so far yielded scant demonstrable economic benefit, a measure of stimulative government spending may be the only alternative, no matter who is President. And of course spending measures without major tax increases will mean more red ink, at least in the short run.

Thus Perot needs to demonstrate a better sense of the political realities. His plan would have to be approved by a tax-shy Congress. The billionaire businessman is used to calling the shots himself. Managing a nation is a delicate process of give-and-take. Perot exhibits little patience for that. That tendency may make him a shrewd businessman, but it surely doesn’t make him an ideal candidate for President.

In fact, Perot ought to quit teasing about re-entering the race. He maintains that his decision, which may come soon, rests with his volunteers. Maybe, but Perot has already had his glory. He has helped clarify the budget debate and that’s been helpful. But the second time around, he’s somehow much less fun. More to the point, a Perot candidacy now seems somehow much less pertinent and useful.