SQUEAKER VOTE: CLINTON FACES A TOUGH ROAD AHEAD ON TAX PLAN

In the first major test on the specifics of his economics program, Bill Clinton eked out a cliff-hanging 219-213 victory in the House. Twelve years ago, Ronald Reagan had a much easier time of it with his economic program. Reagan had a very simple, easy-to-comprehend message which he could sell time and time again to the American people: drastic cuts in taxes will create an economic boom that will bring in billions of additional tax dollars. Everything will be just fine.

It was called "Supply Side Economics" or "Reaganomics." George Bush, Reagan's opponent for the 1980 Republican presidential nomination, called it "Voodoo Economics," but never mind. People like the notion of tax cuts especially the rich folks and they wanted to believe in Reagan's blithe hope that it would all work out in the end.

Along the way, Bush became a "convert" as Reagan's vice-president and later president himself. So, Voodoo Economics was the order of the day and year 12 years, to be exact. For quite a while we had the boom. It was the go-go, get-rich-quick, easy-credit style of the '80s: deals, junk bonds, and skyscrapers galore. The rich got richer, the middle class declined a bit and the poor got poorer.

All the while the annual budget deficits grew and grew. The cascade of new tax revenue that Reagan envisioned never materialize. Entitlement programs ("Give it to me; I'm entitled to it") ballooned. The national debt grew from $1 trillion to $4 trillion under Reagan and Bush.

Twelve years later we are into Clintonomics. It isn't simple. It's complex. Americans are, by and large, big picture types. Too many details cause their eyes to glaze over. Bill Clinton can't easily sell his plan with a sentence and a smile. The American economic dilemma is twofold: get the economy moving and reduce the budget deficit both at the same time.

Reagan didn't worry about the deficit, thinking that somehow it would magically work out by itself. Those days of magic and voodoo are over. Reality is harsh. Clinton wanted to spend ("invest") on things vital to our future education, job training, infrastructure, etc. and cut the deficit at the same time. The only way you can begin to do that is to raise some new tax revenue and cut some spending in existing programs.

All of this is complicated and has enormously unpopular ramifications. Cutting taxes for Reagan was easy. Raising taxes for Clinton is difficult. Increasing military spending was easy for Reagan. Cutting military and other spending is difficult for Clinton. His program does contain elements of tax, spend and save and the first two words haunt Democrats in Congress. In political reality, it is more likely that one will be remembered as a tax raiser than a deficit reducer. The former you can see in your reduced paycheck. The latter is a vague mist.

All the budget experts know that hefty progress on deficit reduction can't take place until you control the galloping entitlement programs, especially Medicare and Medicaid. The states keep dumping off more and more of their Medicaid costs on the federal government. At the present rate of growth, unless something is done, the Medicaid portion of the federal budget just that one item will exceed the entire defense budget in the early part of the next century.

Unless the government gets a firm control on health care costs, you can forget about the notion of a balanced budget ever.