White House Balancing Act

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WASHINGTON: With the director of the National Economic Council predicting "surpluses as far as the eye can see," President Clinton may think he's found an answer to Republicans' 1998 election season demands for tax cuts: balancing the budget in 1999, three years earlier than was promised in last year's budget deal.

"He's asking people to resist the temptation of big tax cuts," says TIME White House correspondent Karen Tumulty, "by trying to make credible what he's been saying for years: that the budget can actually get balanced." The lesson -- live within your means -- is not particularly sexy politically. But Clinton feels that Americans asked him to clean up the deficits of the Reagan and Bush years, tax-cut-fueled deficits which Monday he called "the failed policies of the past." Now he's offering to finish the job.

"He's just made the tax issue a lot more difficult for Republicans," Tumulty says. Not to mention lining up a nice legacy-builder for his last years in office. But all this political jockeying depends on one thing remaining constant: revenue. If the economy slows down this year, the best-laid plans of fiscal 1999 will go right out the window.