Under Fire, Clinton Looks to Future

By JONATHAN PETERSON

Jan. 28, 1998 12 AM PT

TIMES STAFF WRITER

WASHINGTON — In a moment both awkward and electrifying, President Clinton set aside his own political travails Tuesday night to present a carefully targeted legislative agenda designed to help Americans “shape this global economy, not shrink from it.”

“This is not a time to rest,” Clinton declared in his State of the Union address, an upbeat, 72-minute speech in which he emphasized America’s mighty stature in a world that has changed in startling ways. “It is a time to build.”

Clinton, speaking in a crowded House chamber with the pall of a presidential crisis in the air, used the annual speech to launch a national debate on Social Security, urging Congress to dedicate money from expected budget surpluses to shore up the giant retirement program for the long haul.

Individually, many of the proposals were modest in scope, and consistent with prior announcements by the White House, such as tax credits for employers that provide child care and an expanded Family and Medical Leave Act. Still, they fit into Clinton’s broader framework of a nation coming to grips with rapid-fire technological and economic change--”a truly new world,” as the president put it.

“Rarely have Americans lived through so much change, in so many ways, in so short a time,” Clinton said. “Quietly but with gathering force, the ground has shifted beneath our feet.”

Unveiling his 1998 legislative agenda, Clinton called for raising the minimum wage, hiking cigarette taxes, providing new protections for participants in managed health care plans, reforming the Internal Revenue service and protecting the rights of pensioners.

“Let us say to all Americans watching tonight--whether you are 70 or 50 or just beginning to pay into the system--Social Security will be there when you need it,” Clinton declared to applause. “Let us tonight make this commitment--Social Security first.”

The White House budget request for next year will be balanced four years ahead of schedule, he announced with evident pride, in contrast to a budget deficit “once so incomprehensibly large that it had eleven zeros . . . And if we maintain our resolve, we will produce balanced budgets as far as the eye can see,” Clinton said.

While the address focused heavily on domestic policies, he aimed at least some of his remarks overseas. Clinton voiced his support of the U.S. troop commitment in Bosnia, and offered words of warning to Iraqi President Saddam Hussein: “You cannot defy the will of the world. You have used weapons of mass destruction before. We are determined to deny you the capacity to use them again.”

Members of the House and Senate responded to the president’s message with enthusiasm, rising repeatedly to applaud his rhetorical flourishes and exhortations. While the lines in his face hinted of fatigue, Clinton appeared focused, confident and resolute as he described his vision of America in the 21st century.

Notably, neither Clinton nor his audience betrayed any indication that the capital has spent the last week consumed by a personal crisis that threatens his presidency. First Lady Hillary Rodham Clinton watched the speech from the First Lady’s Gallery, surrounded by a group of citizens selected as leaders in “discovery, service and building ‘One America,’ ” according to the White House.

The president personally introduced one of the first lady’s gallery companions, Elaine Kinslow of Indianapolis, a former welfare recipient who earns $18,000 a year as a transportation dispatcher.

Stress on Access to Quality Education

Clinton repeatedly stressed the the need to expand access to quality education to help Americans acquire the skills needed for the future. He highlighted new proposals to hire 100,000 teachers, finance school renovations and establish higher standards in public schools.

“We have opened wide the doors “We have opened wide the doors of the world’s best system of higher education,” he said. “Now we must make our public elementary and secondary schools the best in the world, too--by raising standards, raising expectations and raising accountability.”

Despite the many and varied proposals outlined in his speech, Clinton sought to go beyond what one advisor called “a national to-do list,” attempting to provide his vision of a prosperous society, he said, is “within our reach.”

“An America where everybody has a chance to get ahead with hard work,” he said in a series of brush strokes that conjured a sunny, almost Reaganesque picture of the nation. “Where families are strong, schools are good, and all young people can go to college. An America where scientists find cures for diseases from diabetes to Alzheimer’s to AIDS. An America where every child can stretch a hand across a keyboard and reach every book ever written, every painting ever painted, every symphony ever composed.”

Yet Clinton clearly was seeking to draw a sharp distinction from former President Ronald Reagan and other conservatives who have long fought to slash the size of the federal government.

Clinton’s declaration that “the era of big government is over” gained great attention in his State of the Union address two years ago. Tuesday night, he sought to broaden the point, defending the role of government and trying to distinguish his approach from the typical dichotomy of liberals vs. conservatives.

“We have shaped a new kind of government for the information age,” he said, and “moved past the sterile debate between those who say government is the enemy and those who say government is the answer. My fellow Americans, we have found a third way. We have a smaller government, but a stronger nation.”

The new America, Clinton maintained, would have several fundamental characteristics: “An economy that offers opportunity. A society rooted in responsibility. And a nation that lives as a community.”

For weeks, Clinton’s White House had been anticipating the speech as a high-water mark for a president who had been strengthened by last year’s balanced-budget deal and seemed to have survived official investigations into campaign finance practices with little damage to his stature.

The furor forced a rattled White House to crank up emergency damage-control machinery, robbing the State of the Union address of the optimistic aura that officials had hoped for.

Still, advisors who had labored over the address for weeks insisted that the public remains more interested in Social Security, health care, education and the environment than in the lurid allegations that have preoccupied the media and political Washington for a riotous week.

“These are the things people care about,” said Gene Sperling, a top economic advisor to Clinton, shortly before the speech. “These are the things the president was elected to deal with.”

Highlights of Year’s Agenda

Some highlights from Clinton’s 1998 agenda:

* The president called for raising the $5.15 hourly minimum wage, while stopping short of citing a dollar figure. White House aides said a precise proposal might come within days. Clinton called it a “simple, sensible step to help millions of workers struggling to provide for their families.”

* Tobacco should be taxed heavily, in order to discourage children from smoking, he declared. “Let’s raise the price of cigarettes by up to $1.50 a pack over the next 10 years, with penalties on tobacco companies if they continue marketing to kids.”

* Congress, he said, should enact a consumer bill of rights that would protect patients in managed-care health plans. Americans, he said, have the right to know all their medical options, “not just the cheapest,” along with the right to choose doctors, receive emergency room care wherever it is available and keep medical records confidential.

As a way to ease the “fund-raising arms race” in politics, Clinton said he would ask the Federal Communications Commission to provide free, or cheaper, television time for candidates. Broadcasters, he said, “have a responsibility to help strengthen our democracy.”

* Clinton called on Congress to pass legislation for “sweeping” reforms of the Internal Revenue Service. “We need new citizen advocacy panels, a stronger taxpayer advocate, phone lines open 24 hours a day, relief for innocent taxpayers,” he said.

* On the environment, Clinton endorsed $6 billion in tax cuts and research spending to promote cleaner factories, fuel-efficient cars and energy-efficient homes. “Every time we have acted to heal our environment, pessimists have said it would hurt economy,” Clinton said. “Well, today our economy is the strongest in a generation--and our air and water are the cleanest in a generation.”

* The president reiterated his call for “fast-track” authority enabling him to negotiate trade deals that Congress would not be able to amend. “We must shape this global economy,” Clinton said, “not shrink from it.”

Proposal to Save Social Security

In one respect the state of the union is markedly different from past decades: The federal budget is expected to move into a substantial surplus--perhaps $200 billion--over the next five years, with the biggest savings accruing in the latter part of that period. Clinton said he would “reserve every penny of every surplus” until political leaders agree on a long-term solution for Social Security.

As a first step, the White House plans to have the American Assn. of Retired Persons and the anti-deficit Concord Coalition host forums on Social Security this year, with Clinton, Vice President Al Gore and other political leaders in attendance.

Under current law, the pension system faces a long-range financing problem with the retirement of the baby boom generation. The crisis is expected to hit in 2029, when the system will be able to pay only 75% of its promised benefits. Changes must be made long before then to avoid sizable tax increases or benefit cuts.

In the speech, Clinton attempted to pull together such varying sources of anxiety about the changing world as the Asian financial crisis and trade policies that fuel fears among American workers.

Striking a teacher-like tone, Clinton lectured that Americans should be concerned about the financial problems of Thailand, Indonesia and South Korea because “if Asia sinks into recession, they won’t be able to buy the goods we want to sell them [and] if their currencies lose their value, the price of their goods will drop, flooding our market and others with cheap goods, making it tougher for us to compete.”

That in mind, he asked Congress to authorize an $18-billion line of credit to help the International Monetary Fund deal with the economic crisis in Asia. The IMF legislation languished on Capitol Hill last year.

“Preparing for a far-off storm that may reach our shores is far wiser than ignoring the thunder until the clouds are overhead,” the president said.

Clinton, who was stung last year by the defeat of his request for broader, “fast track” authority to make trade accords with other countries, sought to assure the nation that “I have listened carefully” to the concerns. He said he had concluded that the resistance was based on fears of losing American jobs and also that trading partners would maintain lower environmental and trading standards.

Nonetheless, he said, “We can’t influence other countries’ decisions if we send them a message that we’re backing away from trade.”

Clinton won applause for his vow to propose legislation to fight abusive child labor practices in other nations.

Throughout, Clinton was accorded respect and dignity--as usual during a this kind of speech. The cheers from the Democrats--and the occasional jeers from Republicans--came over policy differences for the most part. The first lady was greeted warmly by most when she entered with the vice president’s wife, Tipper Gore. After the speech, Democrats were restrained in their response, taking pains to separate Clinton’s public and private lives as much as possible.

“The president delivered a very strong speech under difficult circumstances,” said Senate Minority Leader Tom Daschle, (D-S.D.).

Said House Minority Leader Richard A. Gephardt: “This speech turned Washington’s attention back where it belongs--to the business of the people. People want us to start talking more about them and less about the scandal of the day.”

GOP Comments More Freely

Republicans, in contrast, seemed to feel freer to speak their mind. Their responses ran the gamut from outright disapproval and disdain to an expressed willingness to give Clinton the benefit of the doubt.

Some avoided the uncomfortable topic of Clinton’s private life altogether and commented only on policy. “He said a lot of good things about education, crime, Iraq but people were thinking about what he didn’t say,” said Sen. Arlen Specter (R-Penn.).

Not so, said Rep. John R. Kasich (R-Ohio), a sometime Clinton foe. “People came into the chamber, we’re all there. I don’t think once he got started anybody was thinking about it. We wanted to hear what he had to say. I think most of us hope none of this stuff is true.”

Times staff writers Norman Kempster, Robert A. Rosenblatt, Alissa J. Rubin and Jodi Wilgoren contributed to this story.

* LEADERSHIP TEST: Protecting budget surplus will be challenge, analysts say. A13

* SOCIAL SECURITY: Debate looms on future of retirement program. A14