Clinton demands tax sacrifice

THE LAST pretences have vanished. If Bill Clinton is as good as the word of his first television address to Americans from the Oval Office, not only the rich are going to get soaked in the economic package he presents to Congress tonight. Every citizen making more than dollars 30,000 ( pounds 21,000) will have to make a 'contribution'.

Such is the kernel of Monday night's economic 'call to arms' that was winning less than ecstatic reviews yesterday. In a telling change of terminology, 'contribution' has replaced 'sacrifice' as Mr Clinton's noun of choice. But no lip-reading was required to grasp his message to the middle classes who elected him. Times are tough, and the promise of a tax cut which helped him win in November is dead, buried and forgotten for the foreseeable future.

The fault was not his, but of 'the enormity of the crisis' caused by 12 years of Reagan-Bush neglect, and a budget deficit increasing 'so much beyond my earlier estimates and beyond even the worst official government estimates' - though not beyond the warnings of every serious economist from the summer of 1992 on.

The price of doing 'the same old thing', Mr Clinton said, was higher than the price of change. 'We just have to face the fact that to make the changes our country needs, more Americans must contribute today so that all Americans can do better tomorrow.'

He promised 'more than 150' cuts in government spending, but said a dollars 31bn short-term stimulus would create 500,000 jobs. Those earning dollars 100,000 or more would pay 70 per cent of the new taxes - a signal that the rich will have to dip into their pockets more deeply than expected.

But it was his spokesman who dropped the most loaded negative of the day: it was very likely, said George Stephanopoulos, that people making less than dollars 30,000 'will have no increase at all in their taxes'. But let the 65 per cent of Americans who earn more beware. When the taxman cometh, the middle-class net is broad.

Style counted as much as substance. Behind the President was a bust of Abraham Lincoln. Like so many of his predecessors on similar occasions, he wrapped himself in the Stars and Stripes. 'When I was a boy, we had a name for the belief we should all pull together . . . we called it patriotism, and we still do.'

But will this summons from the third youngest president in US history do the trick? The reaction from Wall Street - a 67-point fall by midday in the Dow Jones Index - was predictably cool. The country at large, however, still seems ready to give him a chance.

According to one poll, by a 56 per cent to 37 per cent margin, the public feels that, however painful, the treatment will be applied fairly. And while the energy tax Mr Clinton seems certain to impose is less popular, opposed by almost six in 10, 54 per cent believe they should pay higher taxes if the deficit is to be reduced.

But these findings came before Mr Clinton's address. If he is to succeed he must, as Roosevelt and Reagan before him, carry his message over the head of Washington and its stubborn congressmen, smooth-tongued lobbyists and catty journalists, to the nation at large. To do so, he is borrowing heavily from the rhetoric and stage props of Ross Perot.

Common sense demanded an attack on the deficit, 'but in the 26 days I've been your President, I've already learned that in Washington common sense isn't too common'. But, Mr Clinton told Americans, 'this is your country. I urge you to stay involved. If you're vigilant and vocal, we can do what we have to do.' The Great Communicator from Dallas of 1992 could not have put it better.

Mr Clinton even used charts, another Perot trademark, to underline his economic points: the deficit had quadrupled to dollars 300bn in 12 years; recovery was not cutting unemployment; and investment, the seedcorn of future prosperity, was continuing to decline.

Somehow, though, the performance didn't quite make the grade. Maybe it was his youth that was such a shock, after a decade of government by 60- and 70-year- olds. 'Who's that kid sitting behind the desk in the Oval Office?' began the Washington Post review by Tom Shales, its television critic. He added that 'it's still hard to take Clinton as seriously as a president would like to be taken'.

Physically, Mr Clinton is an imposing man. But he was dwarfed by the huge black leather chair he sat in. For an instant, his face bore the amazed imprint of a man who cannot quite believe he's got the job. As he started to talk, Mr Shales noted, 'his features snapped to attention, into that look of country bonhomie he has perfected. It was touch-and-go there for half a second.' Tonight, at a joint session of Congress, it will be touch-and-go again.

Markets fall, page 20

(Photograph omitted)

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