What will Clarkonomics look like? A lot like Clintonomics. Clark wants to position himself as a centrist well to the right of liberal Howard Dean. The main points of Clark's economic vision: boost international trade, trim the budget deficit, roll back President Bush's tax cuts for the wealthy, and use a mix of spending and targeted tax breaks to create jobs in the short run. "He's got good instincts on fiscal discipline and open markets," says one Washington veteran who has advised Clark on policy. "But he knows the issues better than the political nuances."
Clark briefly taught economics at West Point in the early 1970s, but he has a lot of catching up to do. So far, he has been getting much of his advice from Clinton Administration veterans, including former Treasury Secretary Robert E. Rubin, ex-National Economic Council head Gene Sperling, and former Council of Economic Advisers Chair Laura D'Andrea Tyson.
It's no surprise that Clark embraces the sort of progressive centrism that defined Clinton. Rivals such as Senators John F. Kerry (D-Mass.) and John Edwards (D-N.C.) have tried to stake out a similar position, but to little effect. Clark, who was an investment banker after retiring from the Army in 2000, is about to take his turn. Here's how he'll try:ROLL BACK THE TAX CUTS. Unlike Presidential hopefuls Dean and Representative Richard A. Gephardt (D-Mo.), who would repeal all of Bush's tax cuts, Clark would cut only those tax breaks for families making $200,000 a year or more. Ending those breaks would generate about $50 billion a year in 2004 and 2005 and $900 billion through 2013.
The plan is drawing fire from Republicans, who say Clark will boost taxes on small business. But the rollback would give Clark the money to accomplish several other goals, including beefing up homeland security, paying for a health-care initiative and other domestic spending, and reducing the deficit.IT'S STILL THE ECONOMY, STUPID. Top on Clark's list is an economic stimulus plan. Clark would use $100 billion over the first two years, including $40 billion to boost investment in homeland security and infrastructure such as roads and hospitals. A further $40 billion would help hard-pressed states in education and health care; and $20 billion in tax breaks would encourage companies to purchase new equipment, hire workers, and keep manufacturing jobs in the U.S. But $50 billion a year is not much money in a nearly $11 trillion economy. And Clark would simply replace Bush's mostly supply-side tax cuts with an equal amount of demand-side spending.ATTACK THE DEFICIT. Clark would use some revenues generated by his upper-bracket tax hike to fund a still-evolving health-care plan and other initiatives. The rest -- maybe $500 billion -- would go for deficit reduction. But even that would trim cumulative deficits by just 10% over the next decade, according to private estimates. And it is unlikely that candidate Clark will roll out a specific plan for long-term fiscal balance. Such a proposal would require even bigger tax hikes, as well as sharp cuts in popular programs such as Medicare -- issues that candidates are loath to tackle.KEEP ON TRADIN'. Clark is a Clintonesque free-trader who backs existing accords such as NAFTA and the World Trade Organization. But he would insist that new agreements satisfy international environmental and labor standards, and he opposes fixed exchange rates in countries such as China -- a policy that would boost U.S. exporters.
For Clark's Presidential campaign to succeed, he must first convince primary voters that his mix of market-oriented economics and deficit reduction can create jobs and solve social problems. That sort of zig to the center worked for Bill Clinton a dozen years ago. Clark is betting it will work again. By Howard Gleckman, with Paul Magnusson, in Washington