Rep. Obey: Government Back in Control

ONE of Congress's strong liberal voices, Rep. David Obey (D) of Wisconsin, does not foresee a major impact on the economy from the president's budget proposals for three or four years.

But he says he expects the Clinton budget to raise confidence in at least two ways:

* Consumer confidence would rise with the perception that the wealthy are bearing more of the tax burden.

* Business confidence would rise as the private sector sees the government more unified and under control.

"I don't know whether this package will work or not," Mr. Obey said at a Monitor breakfast yesterday. "I only know it's put together better than packages we've had in the past."

Public opinion "tremendously soured" in 1990 when budgetary war broke out between the White House and Congress and George Bush vetoed the "continuing resolution" to keep government running in the interim.

"The economy will begin to improve when the private sector sees that government is back in control," he says.

He would act more aggressively than Clinton to shift the tax burden onto wealthy taxpayers to create a greater sense of equity among middle-class taxpayers. "I would happily raise that top rate to 50 percent" for the top 1 percent of taxpayers.

He is not concerned that higher taxes on the investing classes would dampen growth. "Equity in taxes raises consumer confidence."

"One of the reasons we're in the dumpster is that we've let slip the share of taxes on the highest income group," he adds.