A Step Back in Time: September 6, 1993

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CLINTON'S ADVISERS STUDY NEW MOVES TO SPUR ECONOMY

By SYLVIA NASAR, NYT

Stuck with a tight budget and uncertain economic prospects, top economic advisers in the Clinton Administration are eyeing the same types of measures to stimulate the economy that the Bush Administration used during the Presidential election campaign last year.

The measures on the drafting table, which, by and large, would not require Congressional approval, are being discussed by Labor Secretary Robert B. Reich; Laura D'Andrea Tyson, the head of the Council of Economic Advisers, and other high-level aides. The plans include speeding work on military contracts or easing regulations on Government lending.

Such steps are supposed to provide small but concentrated doses of job stimulus for selected industries, groups of workers and regions -- California, in particular -- in the event that the economy stalls or job growth fails to pick up.

"Several of us are developing ideas and exchanging memoranda with an eye toward advising the President on this matter," Mr. Reich said in an interview last week. Should Affect Spending Schedule

The measures are intended to affect the timing and the target of spending, loans and tax collections without changing the overall budget totals, as well as to stimulate private business activity by rewriting banking, airline and other regulations.

Since the defeat of the Administration's stimulus package by Congress, the economics team has been frustrated by the Administration's lack of fiscal tools to bolster the modest and uneven economic recovery. "Given defeat of the stimulus plan, given slow growth," an Administration official said, "the question became: What could you do? Are there ways to stimulate the economy with little or no on-budget effects?" Still in Draft Stages

Senator Bob Dole, the minority leader who worked to defeat the Administration's stimulus package during the spring, said Friday: "It's fine with me as long as they don't overreach. They've got the authority."

While the broad outlines of a plan have been spelled out, the specifics are far from final. "This has not reached the level of the full N.E.C.," said Mr. Reich, referring to the National Economic Council. "The President has made no decisions yet."

Last year, the Bush Administration used its discretionary authority to cut income tax withholding and to hasten Pentagon purchases of military hardware, both actions intended to lift confidence and economic growth. At the time the Clinton camp derided the moves as gimmicks, but now the Clinton economic advisers say the measures were effective in temporarily lifting growth and that their earlier criticisms had more to do with President George Bush's motivation -- re-election -- than with his methods.

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