The Next Dose of Medicine

By PRISCILLA PAINTON

MANY AMERICANS TOOK last week's call for "contributions" in the spirit of a bracing tonic, bitter but salutary. But how will they feel about being asked to drink from the same cup two months from now?

To fund his grandest reforms -- from a health-care system to an industrial policy -- Bill Clinton is sure to come back a few months from now with another appeal to sacrifice. Less than 48 hours after hitting up Americans for $246 billion in new taxes over four years, Clinton was already discussing the idea of a national sales tax as if it were a not too distant possibility. "I did not mean to float a trial balloon," Clinton said Friday, as the issue threatened to engulf his campaign to push his first round of tax proposals. Meanwhile in Washington, Clinton's Budget Director, Leon Panetta, brought up the likelihood of new taxes on guns, alcohol and tobacco. "It's a bit too early to say," Panetta said, but then he went ahead and said it.

In his speech Clinton emphasized the importance of his health-care plan but left out any reference to what it would cost: additional taxes in the range of $30 billion to $90 billion a year by 1997. The President argues that health- care reform could save large sums for the economy, but federal spending will go up. In addition to a national sales tax and the so-called sin taxes, the Administration is considering a number of other levies to recapture the savings that private companies will enjoy from a national health-care system. The taxes were described in a memo, which was leaked to the Wall Street Journal, from Clinton adviser Ira Magaziner to task-force leader Hillary Rodham Clinton. Among the levies discussed: taxes on benefit plans that offer coverage above a certain level (currently all employee health-care benefits are exempt); a corporate tax in addition to the general increase in the corporate rate to 36% that the President proposed last week; and taxes on "noncritical" health measures such as plastic surgery. The President has also discussed with health-care experts limiting the deductions that businesses can take for providing employee health insurance.

Clinton could restrain his need for new revenues by curtailing his reformist ambitions: his aides have privately discussed phasing in his health-care plan so that it covers all uninsured children by the end of his first term and only grows to include adults in his second. But even if he slows down on the health-care front, Clinton is still left with expensive campaign promises. , Among them: his pledge to establish a program for college loans that students could repay in national service instead of dollars, which could cost as much as $30 billion. Then there is his vow to "end welfare as we know it," which may save money in the long run but require more spending on health care, child care, job training and education. As he indicated in his speech Wednesday, Clinton also seems intent on spending money to develop an industrial policy by subsidizing technologies, industries and perhaps even specific firms that Washington bureaucrats determine will create new jobs and capture new markets. "It is not enough to pass a budget or even to have a trade agreement," he said. "The world is changing so fast that we must have aggressive, targeted attempts to create the high-wage jobs of the future."

What may eventually sour some taxpayers on Clinton's reforms is the persistent trade-off of short-term pain for long-term benefits. Before long, voters may develop a renewed taste for 1980s-style instant gratification, or at least the delivery of promises within a four-year presidential term.

With reporting by Michael Duffy and Dan Goodgame/Washington