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News: Analysis & Commentary
AGENDA ITEM: THE ECONOMY
Expect a push for deep domestic spending cuts and a cap on entitlements other than Social Security. Conservatives would give parents a $500-per-child tax credit while cutting taxes on capital gains, business investment, and savings. A priority for Bob Dole: Sending a balanced budget amendment to the states for a vote. On trade, a yes on GATT but restrictions on the President's right to include labor and environmental protections in future trade accords. An initiative that will play to business: Conservatives want more risk-assessment and cost-benefit analysis before regulations are imposed on companies.
The White House likely will counter with a plan for modest deficit reduction, calling for new budget cuts of around $100 billion over five years. Clinton will back a small-scale "public investment" package, including new funds for job training and education. Top White House aides such as Leon Panetta intend to resist deep spending cuts and a cap on entitlements but will seek medical cost curbs as a part of health-care reform. Under political pressure, Clinton also may be forced to accept a middle-class tax cut, most likely in the form of child-care credit. He will push GATT and new trade pacts with Chile and Latin America.