Beyond paper cuts.

• Author: Peters, Charles
• Position: Ways to reduce budget deficit

In December 1992, two of Bill Clinton's top economic advisors, Roger Altman and Lawrence Summers, wrote the president-elect a private memorandum wargaming the first Clinton budget's economic goals. The two men - they are now top deputies to Lloyd Bentsen at the Treasury - argued that a deficit-reduction target which stabilized the growth of debt to the growth of the economy (a figure that turned out to be $500 billion) was "the least ambitious deficit target that is defensible." Guess what target the President settled on? Not surprisingly, $500 billion.

When Congress finally passed the plan by the landslide margins of two votes in the House and one vote in the Senate this summer, the president hit the hustings. "Now we can truly say change has come to America," Clinton announced at one rally at the State Capitol in my old hometowm of Charleston, West Virginia.

Or has it? Even by the president's men's own admission, what Clinton got this year was the bare minimum. The Congressional Budget Office's own figures, too, indicate that the public debt will actually grow from 52.5 percent of the gross domestic product in 1993 to 54.6 percent by 1998 and still higher thereafter - meaning that the $500 billion wasn't enough to begin with. So despite the President's cheerful words, true change won't come until Washington clears out the kudzu of stubborn subsidies, untouched benefits for the well-off, and tax loopholes that escaped pruning this year.

In that spirit, the Monthly would like to suggest how Clinton and Congress can free up money to cut the deficit and help pray for programs that are really needed. They were on the right track when they expanded the Earned Income Tax Credit and raised the top income tax rates - steps which put money in the pockets of the working poor while making the rich pay their fair share. Only 4,442 West Virginia families will pay higher income taxes while 105,000 families will get tax breaks - a small economic stimulus package on its own.

This is only the first step. While Clinton has tried to push a few of our cost-cutting ideas through Congress - freeing federal pay and ending ludicrous subsidies - Capitol Hill has resisted. We hope the President presses on, adopts the ideas he hasn't already, and that Congress will see the wisdom in taking money from bureaucrats, well-off entitlement junkies, and speculators to pay for rebuilding our roads and bridges, providing universal health care, and investing in education to create a better workforce.

Take just one example: Each year, the United States admits 800,000 new legal immigrants without investing in rudimentary training in English. These people,, once in the workforce, could jumpstart the economy for everybody. But there is no federal money to teach them English, and churches in New York are holding lotteries for limited spaces in volunteer classes. As Bilga Abramova, a 35-year-old Russian refugee, told The New York Times at her third time through such a lottery, "My future is on hold. Without English, I cannot begin a new life. I do not want to depend on welfare. That is shameful."

So for the deficit chickens on both sides of the aisle, and for Clinton, here are cuts that would give people like Mrs. Abramova a chance:

* Freeze federal salaries. Savings: $29 billion by 1998.

One of Clinton's most courageous stands this year, sadly lost in the fallout from Cristophe's tarmac coiffing and the succession of Nannygates, was targeting the 2 million-strong federal civilian workforce (total payroll = $107 billion) for a pay freeze. Too tough on the feds? Consider this: Civil servants make an average of $36,279 in the U.S. and $45,000 in Washington; pay can go as high as six figures-plus for top bureaucrats. Meanwhile, the average private sector worker makes $26,758, and only 10 percent of private workers make as high a salary as a third of civil servants do.

Nevertheless, the well-connected federal employee unions wanted a 2.2 percent pay raise worth $3.1 billion in 1994. A big problem...