Hard-liners versus capitalist roaders: Mr. Clinton's economic picks range from moderate to Martian - which is good news for Republicans - Bill Clinton's appointees have increased taxation in common

National Review, Feb 1, 1993 by Daniel J. Mitchell, Andrew F. Quinlan

Mr. Clinton's economic picks range from moderate to Martian--which is good news for Republicans.

FOR ALL the talk about the "diversity" among Bill Clinton's personnel choices, the most notable thing about the new economic team is their conformity. Every Clinton nominee whose new job has anything to do with the economy believes that government should tax more, spend more, and regulate more.

If anything good does come out of the new Administration, it probably will be a result of Clinton's pick for Treasury Secretary, Senator Lloyd Bentsen of Texas. As Chairman of the Joint Economic Committee, Bentsen produced the 1980 annual report which endorsed supply-side economics. [See sidebar p. 47.] Bentsen also voted for the 1981 tax cuts and, even as recently as 1991, proposed a budget package that would have reduced both taxes and spentling.

On the other hand, Bentsen's moderate history may have been a calculated attempt to appeal to conservative Texas voters. As he became increasingly entrenched in the Senate, his voting record moved left. He joined in the 1989 filibuster against capitalgains tax relief. He also supported the 1990 budget deal, and has increasingly sided with big labor's political agenda. Most worrisome, he favors higher marginal tax rates.

As liberal as his voting record has become, though, Bentsen is a Tory Democrat compared to other appointees such as Leon Panetta of California, Clinton's pick to head the Office of Management and Budget (OMB). Panetta, who chaired the House Budget Committee, can only be described as a compulsive tax increaser. The media have labeled him a "deficit hawk," but vote ratings for the last three years put together by the National Taxpayers Union reveal that he is more likely to vote for deficit spending than the average Democratic congressman--no easy accomplishment.

Perhaps even more revealing, after leading the fight against a balancedbudget amendment last year, Panetta introduced legislation that would have imposed automatic tax increases on the American economy any time Congress failed to comply with budget laws. In other words, for refusing to cut spending, Congress would be rewarded with higher taxes that would be used to fund even more spending, all without ever having to vote for a tax increase. Panetta's defenders argue that his budget package also would have imposed automatic spendmg cuts, but it is instructive to note that Panetta's definition of spending cuts includes automatic increases in the taxation of Social Security benefits. This is what, according to the media, constitutes being serious about the deficit.

Little is known about the ideological predilections of a third economic appointee, Robert Rubin, a Wall Street investment banker (and a big financial backer of Clinton, and also of Mondale in 1984), picked to head the new National Economic Council (NEC). Rubin's Wall Street background may make him somewhat leery of ideas pushed by the more radical Clinton appointees, but, as with Bentsen, that will simply mean that he advocates expanding government at a slower rate.

Another Wall Street transplant is Roger Altman, Clinton's choice for deputy treasury secretary. A classmate of Clinton's at Georgetown, Altman is a Carter Administration retread who, while at Treasury from 1977 to 1980, was involved in the Chrysler and New York City bailouts. Altman is closely identified with the tactic of redefining wasteful domestic spending as "investment" and then using higher spending in these categories to justify ridiculously optimistic economic assumptions. As Stephen Moore of the Cato Institute has pointed out, however, President Bush allowed record spending increases in all these categories, and yet the economy languished.

For deputy director of OMB, Clinton selected longtime Washington insider Alice Rivlin. Although she has been at the Brookings Institution since 1983, Mrs. Rivlin is best known for her tenure as director of the Congressional Budget Office. In that post, she ardently opposed supply-side economics and used Keynesian analysis to predict that the Reagan tax cuts would increase inflation. Her paper trail includes articles in favor of wage and price controls and nationalized health care. She also has advocated using the tax code to redistribute income.

Of all the Clinton economic appointees, the most radical probably is Laura D'Andrea Tyson, the incoming chairman of the Council of Economic Advisors. Professor Tyson is an advocate of protectionism and industrial policy, ideas which even most liberal economists are loath to support. Her academic writings include articles defending the economic policies of thenCommunist Eastern European nations

Other Clinton selections are not much better. Carol Browner, proposed as Environmental Protection Agency administrator, used to be in charge of environmental issues for Al Gore. Miss Browner's radicalism could have a huge impact on the economy. In fields like wetlands regulation and implementation of the Clean Air Act, she will be able to take the provisions of a bad piece of legislation and make them even more expensive.