President Clinton won the White House last time out by focusing like a laser on the doldrums economy that prevailed during the Bush administration. Next time out the economy is likely to top his agenda again, but in much different circumstances.
If the situation is upbeat throughout 1996 -- if growth is steady, unemployment low and inflation under control -- the president will claim full credit. That is evident in his new budget and economic reports. But if conditions turn sour, the administration predictably will blame it on Speaker Newt Gingrich's Contract with America, now halfway through its 100-day journey to House passage.
Recent history, Clinton version, is clear enough: Troubles began when President Ronald Reagan took office and the Congress, then under Democratic control, went along with his deficit-causing tax cuts. Or as Mr. Clinton vividly put it the other day: "We had a bipartisan conspiracy to quadruple the debt of this country." And the quadrupling, according to White House pronouncements, is the sole reason it is still projecting $200 billion yearly deficits till the end of the century. Without the interest costs on Reagan-Bush debt, it is argued, the federal budget would be in balance today.
Having issued his budget, Mr. Clinton is challenging Republicans to come up with theirs. "I've done my duty," he says. There is every indication that in the next two months the House Republicans will indeed do their duty, as least as they see it, by doing a job on the Clinton budget. Therein lies the president's political strategy for 1996.
Laura Tyson, the president's chief economic adviser, has warned that "too aggressive" an approach to deficit reduction -- meaning excessive slashes in federal spending -- could actually cause economic growth to decline a lot more than anticipated in 1995-96. "So Congress needs to be aware of and careful of what they do and how it might affect the macro-economy," she warns.
As we interpret Ms. Tyson's words -- which doesn't mean we accept her excuses for not taking action to put the budget on a glide path toward average-year balance -- it appears the Clinton camp is preparing to blame any economic downturn on the Republicans. That Senate Republicans realize this full well may explain why many would prefer to slow down the Gingrich revolution.
GOP strategy is obviously to deny Mr. Clinton the political bonus he will claim if the economy prospers and to make sure he, rather than Republicans, gets the blame if recession returns.
Yet in testimony yesterday before the Senate Banking Committee, Federal Reserve chairman Alan Greenspan drew Republican praise and Democratic criticism for his year-long fight against inflation through higher interest rates. Since Mr. Clinton has wisely, if quietly, backed Mr. Greenspan's policy all along -- this on the theory it is the best way to prolong the recovery -- one has to wonder which (if any) party in Congress is getting the message that "It's still the economy, stupid."