WHERE THE CANDIDATES STAND ON THE ECONOMY. The next president will have to sustain economic growth while shrinking the budget deficit. What's that mean for taxes? Second in a series on the key issues of '88. BUSH

WHEN George Bush talks about the economy, he inevitably goes back to his days in the oil patch. The vice-president recounts how he started a company that leased oil equipment for offshore oil drilling. ``It was a small business, but not too small to learn the economic facts in the real American economy,'' he told a Chicago audience recently.

From his experience as a businessman, Bush says he learned about risk and decisionmaking. According to Charles Greenleaf, a friend of Mr. Bush who worked with him in the 1980 election, ``When Bush is asked an economic question, he is familiar with it in a business sense, not just as something studied in school.''

The business experience extends to his economic philosophy and the people he surrounds himself with. His chief economic advisers are likely to be James Baker III, former Treasury secretary; Nicholas Brady, the current Treasury chief; Richard Darman, a former Treasury official; Martin Feldstein, former chairman of the Council of Economic Advisers; and Michael Boskin, a Stanford University economist.

``The most important thing is to provide an environment where the private sector can grow and generate employment and rising family incomes,'' Mr. Boskin says. Thus, Bush prefers to give tax credits to individuals for such things as child care and education instead of starting new federal programs.

Boskin says Bush's first economic priorities as president-elect would be to keep the economic recovery going and inflation under control. This is essential for other Bush economic proposals, which include:

A flexible spending freeze on the government, which would hold overall government spending to the rate of inflation, except for social security, which would be exempt. Bush advisers are cautious when talking about how to lower the budget deficit. ``We need to reduce it gradually,'' says Boskin. Although Bush proposes no major cuts in current programs, it is likely the ax will fall on some farm programs.

Bush advisers stress that it is important that the economy grow faster than the rate of inflation, so that tax revenues expand. ``The only tool for a home run is the economy,'' says Deborah Steelman, Bush's domestic-policy adviser.

By now, most everyone has read Bush's lips as he announces, ``No new taxes.'' Instead, he proposes lowering the capital gains tax to 15 percent from 28 percent, maintaining it will bring $6 billion in new revenue to the government.

Bush would also provide a tax break to the middle class by asking Congress to give wager earners making under $50,000 a year a tax-free savings account if the funds are committed for at least five years. The maximum contribution would be $1,000 a year. It's unclear how much this would cost the Treasury in revenue.

The oil industry would get tax credits to encourage new exploration. Bush would also fight Congress to get all natural gas prices decontrolled. He opposes an oil-import tax. The Strategic Petroleum Reserve, which now contains 550 million barrels of oil, would be topped off at 750 million barrels at an annual cost of $750 million.

Under Bush, ``Energy will have a higher visibility than it has today,'' says Bill Martin, a former Department of Energy official and Bush energy adviser.

The vice-president also vows he will keep the social security trust fund off limits to Congress as it seeks to balance the budget. Instead, Ms. Steelman says, social security should be made an off-budget item to keep it away from revenue-hungry lawmakers. It is unclear, however, where these revenues would be made up.

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