Jobs, Jobs, Jobs

Clintonomics is turning out to be some kind of high-wire act. The President’s economic team is preparing to walk a tightrope that requires a balance between job creation and deficit reduction. In the campaign, the Clinton tilt was toward jobs. But now he is leaning toward deficit reduction--and tax increases.

The crucial test for President Clinton is whether he can harmonize the two competing tensions into a program that will help the economy grow while shaving the deficit. Not so easy. It requires policies that encourage lower interest rates, private investment, savings and job creation while cutting spending and, yes, raising some taxes.

With the economy showing signs of recovery--though California remains hip-deep in recession--the President appears to be giving less emphasis to his much ballyhooed public works program to create jobs. The new Administration now is thinking about a public works “investment� of $15 billion to $20 billion--less than a third of what Clinton advocated in his campaign and not enough to make the average economist raise even one eyebrow.

What’s peculiar about this recessionary cycle is that jobs are being lost--not added--as a recovery (of sorts) proceeds apace. Boeing, Sears, McDonnell Douglas and United Technologies are the latest companies to announce massive layoffs. Pay and benefits for workers in 1992 grew at the slowest annual rate in a decade. It’s no wonder that consumer confidence is waning again.

The Administration has hinted at a deficit reduction program of spending cuts and higher taxes. A too-narrow concentration on deficit reduction could crimp the delicate economic recovery. Granted, that would help push interest rates down, but so would trimming the amount of long-term bonds that the Treasury Department sells. Clinton should consider other incentives to stimulate private investment and create jobs. The private sector could be the most powerful engine for economic growth, especially with federal spending locked in the deficit straitjacket.

During the campaign, Clinton aides pinned up signs to help themselves stay focused: “It’s the economy, stupid.� That’s still true, but we would focus the message even more: “It’s jobs, stupid.� Without more of them, the economy will remain in big trouble.