Predicting Clinton's programs.

• Author: Schnepper, Jeff A.

THE TORCH has been passed to a new generation. Bill Clinton and Albert Gore, America's first baby boom ticket, have been elected President and Vice President of the United States. What are the economic problems facing the new Administration and the initiatives the new President will endeavor to implement in response to those dilemmas.

The election of Clinton, a Democrat, presents an opportunity that has existed only in four of the last 24 years--the potential to end the kind of interparty gridlock the nation has suffered in the past. There will be a presumption of cooperation and action between the Executive Branch and Congress. However, the new President faces the same economy that proved to be the undoing of his predecessor. Clinton will have to decide whether to stimulate the economy with spending initiatives that the Republicans certainly will criticize and also must prepare a Federal budget that likely will inflict pain on the very constituency that helped elect him. Meanwhile, he will be confronted by an accumulated Federal debt that passed four trillion dollars on July 31, 1992.

It is questionable whether deficit reduction will be Clinton's main objective. As a candidate, he focused on three areas of primary importance to him--creating jobs, reforming health care, and training the workforce. As he said on Oct. 11, 1992, "My first priority would be to pass a jobs program." The huge, unanswered question is where deficit reduction fits in his pyramid of proposals. Does it make the top tier, or, like the crazy aunt Ross Perot invoked time and again, does it stay muffled in the basement?

During the campaign, Clinton repeatedly emphasized that a recession is the wrong time for a major deficit reduction plan. He has promised to accelerate spending billions in unused transportation funds to stimulate the economy. This means the deficit more likely than not will go up before it goes down. However, Clinton recognizes that a major component to the solution of the deficit dilemma lies in the reformation of entitlement programs.

As only a Richard Nixon could go to China or an Israeli Prime Minister Begin to Egypt, only a Democratic president can plunge the knife deep into entitlement programs and the bloated Federal bureaucracy. Clinton's current agenda, however, is modest and easily could be compromised down to meaninglessness. For example, his proposed cutting of 100,000 Federal jobs through attrition is appropriate, but far less than...