Clinton Revives Corporate Theme of Calvin Coolidge

Article excerpt

LOS ANGELES _ Calvin Coolidge lives!

It's taken almost 70 years, but at last his forlorn pronouncement that "the business of America is business" has been getting some serious attention _ and in that most unbusinesslike of cities, Washington, D.C.

President Clinton, of all people, was sounding a properly corporate theme the other day in announcing plans to chop, shutter or spin off a bunch of formerly protected programs. In business lingo, it amounts to a wholesale restructuring, the sort of overhaul that many corporations have now gone through several times over.

He certainly has the rhetoric down. "We propose to stop doing things that government doesn't do very well and that don't need to be done by government," Clinton said in outlining _ though not detailing _ the $24 billion in savings. Substitute "government" for the Fortune 500 company of your choice and it's a story on the financial page.

Clinton's immediate motivation is to find budgetary room for the middle income tax breaks that have become the capital's hottest gift-giving idea this season. The economics behind Clinton's proposal _ as well as other tax cut plans being bandied about _ make little sense at this stage of the growth cycle (it merely stimulates an economy that needs to be cooled off), but there's more going on here than handing out a few hundred bucks in politically motivated givebacks.

What makes the current gamesmanship so interesting _ perhaps revolutionary _ is the recognition that revenues and expenses should balance out, that if you reduce tax receipts by $60 billion, you had better cut the cost of government by roughly the same amount.

And here's the extraordinary part: They are actually willing to slash expenses before they cut taxes, thus avoiding the trap of generating a revenue shortfall and not making up the difference in budget cuts _ the one-two sidestep that has jacked up the deficit to death-defying heights. Even the Reaganites never got that far.

Republican Robert Packwood, who will become chairman of the Senate Finance Committee next month and who has seen the "tax and spend" cliche turn into "borrow and spend," said, "I am not going to support any tax cuts that are going to widen the deficit, period. I just don't want to see us once again send out tax cuts with. …