His Seven Most Urgent Decisions

By GEORGE J. CHURCH

DURING THE CAMPAIGN, BILL CLINton seemed to emit a five- or six-point plan every time he opened his mouth. As a vote-getting strategy, it worked: he convinced many people that he understood their concerns and had thought hard and developed specific ideas about what to do. But now he is bumping into the fact that some of his pledges were contradictory and others were easier to voice than fulfill. So he faces an unusual number of tough calls that are bound to disappoint some followers and make some enemies. Yet Clinton will have to move fast to begin enacting his policies before the momentum of his election begins to fade. And the choices he faces in doing so are far more complex than anything foreshadowed by campaign oratory. A partial rundown:

THE ECONOMY

Jobs and red ink: Which campaign promises to break?

Clinton simply cannot fulfill his pledges to "grow the economy" through both short-term stimulus and long-term investment (read: spending) while cutting the deficit in half in four years -- at least not while cutting middle-class taxes, avoiding a gasoline-tax boost and carrying out other ancillary pledges. His numbers have never added up. Yet Clinton cannot just ditch either growth or deficit reduction. Spurring the economy into faster job creation is the core promise that got him elected, but letting the deficit balloon further could eventually put a stop to that very growth.

While backing away from a middle-class tax cut, Clinton is sticking to the idea of pumping an extra $20 billion in deficit spending into the economy this year -- down from a $50 billion stimulus that was under serious discussion in mid-December -- through investment tax credits and public-works spending. Deficit hawks wanted no quick stimulus at all. Political considerations, however, are winning so far. Clinton feels a need to please some loyal constituents, chiefly organized labor and big-city mayors, and to create some happy winners from his economic policies before deficit reduction produces some angry losers.

Clinton, further, is sticking to his promise to pour an additional $220 billion into the economy over four years in spending for job training, education and infrastructure projects (roads, bridges, high-speed railroads, fiber-optic communications), which only makes it harder to attain his goal of cutting the fiscal 1997 deficit $145 billion below current projections (that would represent a 38%, rather than a 50%, cut). But if he is to retain any credibility, he must produce a concrete program for doing it, and soon.

How? Clinton's people are studying all manner of nasty moves they had hoped to avoid: raising gasoline taxes; limiting mortgage-interest deductions, perhaps to $20,000 a year; further restricting itemized deductions for upper- income taxpayers; taxing more of the Social Security benefits of high- income pensioners. Any one of these would enrage politically powerful groups, but efforts to ease the pain -- rebating gasoline taxes to lower- and middle-income people, for example -- would soften any bite taken out of the deficit. "We aren't close ((to agreement)) yet," says an adviser. "Will we be there in three weeks? Maybe."

HEALTH CARE

How to cover everybody while holding down costs?

If economic growth was vote-winning promise No. 1, health-care reform was No. 2. A compassionate government, says Clinton, must extend care to the 37 million people in the U.S. who have no medical insurance. And a government out to cut the deficit must slow the rocketing rise in medical bills. Needless to say, the two goals are extremely difficult to combine.

Clinton's aides have pretty well decided on the general approach: managed competition. The government would encourage (or force) health-care providers -- doctors, hospitals and insurance companies -- to vie for customers by offering competing packages of services and premiums. But economic advisers want to phase in universal coverage slowly to hold down costs. Others insist that benefits must reach many people fast. Object: to set up a political counterpressure against attempts to overturn the plan by people who lose out -- for example, those who would have to pay a new tax on medical benefits provided by employers.

Another heated debate rages around the idea of a "global budget" -- that is, a fixed ceiling on annual health-care expenditures. Won't work, say opponents: price controls would distort competition, even managed competition. Advocates reply that without a ceiling, any health-care plan would hand over to doctors, hospitals and insurers the keys to the federal Treasury.

BOSNIA

When should the U.S. use military force overseas -- and how much force, and to what ends?

Those are the overarching questions for American foreign policy in the post- cold war era. Secretary of State-designate Warren Christopher asserts that he "will not attempt to fit the foreign policy of the next four years into the straitjacket of some neatly tailored doctrine." Decisions will continue to be made case by case -- and Bosnia is likely to be the first case. During the campaign, Clinton bashed Bush for not doing enough to stop Serbian aggression and "ethnic cleansing." But so far, he is contemplating nothing - more than Bush eventually came around to: enforcing the no-fly zone over Bosnia and lifting the embargo on arms sales to Bosnia's Muslims. Moreover, Clinton aides talk of doing these things only in combination with European allies, which would be a recipe for inaction, since the allies are afraid. Clinton's people are also searching for "middle options" short of massive use of ground troops. But as Christopher has pointed out, if the U.S. were, say, to stage air strikes on Serbian artillery positions, that would raise "the question ((of)) what is the ultimate objective." Saving what is left of Bosnia? But what is left is not a viable country. Forcing the Serbs to make a compromise settlement? But what compromise is acceptable? And suppose air power cannot force such a settlement? Can the U.S. really walk away, and if not, how does intervention stop short of escalation into a new Vietnam?

SOMALIA

Now that we're in, how -- and when -- can we get out?

Clinton's advisers are clear enough on what they want to do: Hand over the job of keeping order to a United Nations peacekeeping force -- soon. But that force does not exist. Creating it will involve tough decisions, to be negotiated with U.N. Secretary-General Boutros Boutros-Ghali, on size, composition and, above all, rules of engagement. As forerunners of more muscular U.N. forces of the future, the peacekeepers will have to be given more authority to shoot than past forces, which could only hunker down while violence raged around them. Other decisions to be made soon: what degree of order and disarmament the U.S.-led multinational troops will have to impose before passing the baton, and what residual U.S. presence might be required. The penalty for getting those decisions wrong would be severe: either a premature withdrawal, allowing Somalia to collapse back into starvation and anarchy, or a long American presence with no visible end date.

MILITARY SPENDING

How much can Clinton cut -- and how hard will he tromp on Pentagon toes?

The incoming President's pledge to slash $60 billion from George Bush's defense budget over five years, beginning with $5.7 billion in fiscal 1994, is central to his economic strategy. Yet Secretary of Defense-designate Les Aspin indicates that that might not be doable. One reason: Bush's spending plan might not have been enough to pay for all the weapons the Pentagon has contracted to buy. Aspin proposes to cut three Army divisions out of Bush's & projected base force of 18, 110 ships from the projected Navy of 450, and five of a projected 43 active-duty fighter wings.

But if Bush's budget would not pay for Bush's force, $60 billion less might not pay for the smaller Clinton force. To save as much as he wants, Clinton might have to force a Pentagon overhaul cutting out much duplication -- consolidating air-combat missions now performed by different military services, for example, and assigning the primary responsibility for quick intervention in Third World fights to either the Army or the Marines, rather than maintaining divisions capable of the job in both services. But in a draft report, Joint Chiefs of Staff Chairman Colin Powell is believed to have rejected almost every such proposal. To change that would require an early presidential commitment to a bruising fight.

TRADE

How tough should Clinton get with U.S. partners?

The President has two deadlines coming up on March 2. That is the expiration date for broad White House authority to negotiate agreements with Canada and Mexico and with the 107 other members of the General Agreement on Tariffs and Trade. The Bush Administration, Canada and Mexico have already signed a treaty setting up a North American Free Trade Association, but before pushing for ratification, Clinton has pledged to negotiate supplemental agreements with Mexico on labor and environmental issues and to guard against a sudden surge of imports into the U.S. from Mexico. Can he do so by March 2? If not, he could ask for and probably get an extension of negotiating authority -- but that would risk losing so much momentum that opponents of the treaty might mobilize and prevent it from ever going into effect. The same is true in spades for the GATT talks, which already have dragged on for six years; many experts believe it is now or never. The fundamental problem is that freer trade will wipe out tens of thousands of jobs in noncompetitive U.S. industries like apparel and glassware -- but pushing too hard to protect U.S. interests could torpedo agreements that would give a long-range boost to fully competitive industries.

EXECUTIVE ORDERS

How far should Clinton go in pleasing special interests?

Aides have prepared a thick book of orders Clinton could put into effect with a stroke of the presidential pen. Some samples of their diversity: three would overturn bans on homosexuals in military service, discussion of abortion in % federally aided family-planning clinics, and admission into the U.S. of foreigners with the AIDS virus; another would cut the size of the White House staff; still another would require federal vehicles to run on natural gas or other nongasoline fuels. But should Clinton start pouring them out right away or wait until he has drafted, say, a budget and a health-care plan?

Arguments for quick issuance: they would get the Clinton presidency off to a fast start and please supporters whom Clinton will need for the bruising battles ahead on broader policy. Arguments against: a blizzard of such orders would convey an impression that Clinton is more intent on playing to special interests than on addressing the larger concerns of the people, and it would raise doubt about whether he really is a "new kind of Democrat." Some, notably the order on gays in the military, could ignite loud fights that would use up political capital the President should conserve for bigger battles.

Formidable as it is, this list is not necessarily complete. The fall of Boris Yeltsin and the accession of a hard-line nationalist government in Russia, a new outbreak of racial rioting in the U.S. -- any of a dozen unpredictable developments could suddenly sweep almost everything else off Clinton's agenda. But even if nothing of the sort happens, Clinton still faces monumental decisions. Welcome, Mr. President, to the White House -- and the real world.

With reporting by Dan Goodgame, J.F.O. McAllister and Jay Peterzell/Washington