Clinton to slash costs of the state

IN A second symbolic dose of the deficit-cutting therapy he is preparing for his country, President Clinton yesterday announced plans to eliminate 100,000 jobs from central government, slash administrative costs and abolish some of the more egregious perks and privileges enjoyed by senior federal employees.

Just a day after unveiling proposals for a 25 per cent reduction in the White House staff, Mr Clinton appeared live on national television before the assembled members of his Cabinet to fulfil his campaign pledge to 'cut the cost of government' with a series of executive orders and presidential memoranda designed to save some dollars 9bn ( pounds 6.29bn) over his four-year term of office.

The moment was picked for maximum effect, a few hours before he left for Detroit for his first 'electronic town hall' meeting since the election. There, in the person-to-person format at which he excels, he was due to explain the sacrifices he would demand in the economic programme he will present in next week's State of the Union address.

Apart from the 100,000 reduction in the 2.1 million strong federal workforce, a cut of almost 5 per cent, Mr Clinton wants all government agencies to trim administrative costs by 3 per cent a year. Washington's forest of commissions and quangos is also to be thinned; two examples cited by White House aides yesterday were the Board of Tea Experts and the Advisory Panel for the Dictionary of Occupational Titles.

But even indispensable top officials will see some of their fringe benefits disappear. Federal executive dining rooms will have to cover their costs or shut down, while all but Cabinet secretaries will lose their chauffeur-driven limousines, except where required by national security.

Like most exercises smacking of public relations, there is less to the cuts than meets the eye. In the White House, for example, the 25 per cent reduction will not take effect until October; staff will be added temporarily to help through the first hectic months.

And Mr Clinton told his Cabinet members that the elimination of 100,000 jobs, which was 'just a beginning', would be achieved by attrition not redundancies. But the overall message is clear. 'The federal bureaucracy went up under Reagan and went up under Bush,' said his domestic policy adviser, Bruce Reed. 'Under Clinton it's going to go down.'

Above all, the President wants to set an example from above on the eve of an economic package which now looks as though it will bear more directly on the deficit than seemed likely even a month ago. Middle-class voters, courted by promises of tax cuts during the campaign, seem bound to find life more expensive if Mr Clinton goes ahead with mooted energy and consumption taxes.

Hence the trumpeted new austerity and egalitarianism at the White House. Quite apart from 'limo-loss' many senior officials will be paid between 6 and 10 per cent less than their predecessors.

The measures should lop dollars 10m from the White House annual budget of dollars 140m. The true cost of the presidency is of course far higher. Much transport and communication spending is covered by other departments. Air Force One, for example, which Mr Clinton will board for the first time to go to Detroit, is paid for by the Air Force. It costs dollars 59m a year.

DENVER - The Transportation Secretary, Federico Pena, says he failed to pay social security taxes on a household employee, becoming the second member of President Clinton's Cabinet to acknowledge breaking the tax law, AFP reports. Mr Pena said he would pay more than dollars 100 ( pounds 70) in taxes owed on wages paid to a babysitter in 1991.

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