Clinton's Early Decisions Confirm New Direction

PRESIDENT Clinton started with the easy ones, the red-flag issues that had especially angered many Democrats inside and outside government.

As of Friday, counselors at federally funded health clinics can once again offer abortion advice. Medical researchers can again use fetal tissue. Foreign aid can once again support agencies that offer abortion services. The Competitiveness Council that former Vice President Dan Quayle used to alter environmental regulations is now disbanded.

Mr. Clinton, however, has also made his first major decision on the central issue of controlling the federal budget. He decided to delay strict controls, although he managed to avoid sending definitive signals.

The budget deal of 1990 had required the president to decide by last Thursday whether to move to fixed deficit limits that would force spending cuts by specific percentage amounts. Clinton chose not to.

Instead, the deficit targets will continue to float based on economic conditions and other factors, and the debt ceiling will be raised.

Wall Street, concerned that the federal deficits will raise interest rates and slow the economy, nevertheless easily forgave Clinton this first budget move.

"It doesn't mean he isn't serious about deficit reduction," says Marilyn Schaja, money-market economist at Donaldson, Lufkin, and Jenrette.

The markets would have reacted even better if he had adopted the fixed deficit limits, she adds, but no one expected it.

Bond-market prices even rose as the nominee to head the Council of Economic Advisers, Laura D'Andrea Tyson, testified in her confirmation hearings Thursday that Clinton may move to shorter-term federal borrowing. That means lower long-term interest rates for the private sector.

The next major economic move Clinton is expected to make is to introduce his economic stimulus program in three or four weeks. He has not indicated yet whether he will submit it together with his budget for the year beginning next October. The budget is legally due to Congress a week from today, but that deadline is routinely ignored.

The first flurry of executive actions out of the White House last week changed no laws on either abortion or the environment.

Yet, in the wide space between what laws require and what government does, Clinton shifted the weight of federal policy solidly leftward from the Bush positions.

The results are that abortions may be somewhat easier to obtain, here and abroad, especially for poor women, and business interests are likely to have fewer chances to make their case as environmental regulations are drafted.

Some of the most intractable disagreements between the Bush White House and Congress concerned these issues.

Many of former President Bush's vetoes were of spending bills he blocked because they included funding for abortion-related programs. Several involved federal funding for abortions in the District of Columbia, where the municipal budget is federal.

The question of abortion advice at clinics that receive federal funds went to the Supreme Court, which decided in 1991 in favor of the Bush administration. But the court did not mandate the Bush policy.

Although the Bush administration had a fairly moderate overall record on the environment, neither the opponents nor proponents of strict regulation were very happy.

The Competitiveness Council was a target for liberals, Democrats in Congress, and environmentalists.

The mandate of the council was to streamline regulation of business to keep the economy competitive. It had all the freedom from public oversight of White House staff, unlike the closely monitored Environmental Protection Agency.

To the tiny staff of the council, the bureaucrats at the EPA were part of the enemy, the "iron triangle" of special interests, congressional members and staff, and the permanent federal bureaucracy.

Environmentalists and members of Congress, such as Rep. Henry Waxman (D) of California, thought the council was an end run on the public process of translating law into regulation. The vice president was council chairman, and he gave it special clout.