WASHINGTON -- Economists agree that President Clinton's budget and tax package will depress economic growth at least through next year, but they differ as to whether the plan will help or hurt the inflation picture.

Their comments came as President Clinton yesterday signed into law the plan that, in theory at least, will trim the federal budget deficit by $496 billion over the next five years by raising taxes by $241 billion and cutting federal spending by $255 billion.

Economists generally describe the plan as "contractionary" to economic growth in the short-term -- not because the government will take in more money than it spends but because the plan paves the way for less red ink in the coming years. The federal deficit hit an all-time high of $290 billion last year and is expected to fall just short of that mark this year.

Economists at The Boston Company predict that the package will shave about a half percentage point off real growth of gross domestic product in each of the next three years, according to David Kelly, a senior economist at the investment advisory firm. He predicted GDP will grow by just under 2.5% this year and by just over 2.5% next year.

Kelly said the plan will probably put some downward pressure on prices. "This is a deflationary package -- it takes money out of the economy," he said.

Among other things, the plan raises the top corporate tax rate by one percentage point to 35% on taxable income exceeding $10 million. The plan also raises the top personal income tax rate by a sharp five percentage points, to 36% for individuals earning more than $115,000 and couples earning more than $140,000, and to 39.6% for those making more than $250,000 annually.

Higher taxes on the wealthy will constrain consumer spending and overall economic growth next year, according to Susan Sterne, economist and president of Economic Analysis Associates, Inc., in Stowe, Vt.

Higher taxes, especially on the corporate side, will eventually be passed on to consumers, which makes the Clinton plan inflationary, Sterne said. "Inflation will accelerate under this plan," she said.

Hugh Johnson, chief investment officer of First Albany Inc., agreed that the higher taxes are inflationary. But he said the just is still out on what effect the overall plan will have on prices. The plan will have a marked negative impact on growth next year, he predicted, which would help to keep a lid on inflation.

"In my judgment, it's going to hurt the economy quite seriously next year," Johnson said. "There's a strong chance we could have another recession in 1994."

Such a deterioration in growth would prompt the Federal Reserve to shift back to a neutral stance on interest rates, assuming it still has a bias toward tightening, Johnson said. It might even cause the Fed to consider another easing of interest rates sometime next year, said Johnson, who is slightly more bearish than most analysts surveyed.

Like several other analysts, Alan Gayle, director of short-term investments of Capitoline Investment Services, said the Clinton plan will constrain growth but not by enough to throw the economy back into a recession. "This plan won't derail the current expansion," he said.

The plan will put some downward pressure on prices but the end result will be "negligible," Gayle said. "At best, the plan is inflation-neutral."

Because the Clinton plan is likely to slow growth, it may make the Fed more reluctant to raise rates, Gayle said. "The plan will encourage the Fed to look a little longer and think a little harder about their next tightening," he said.

With the plan in place, Gayle forecast real growth of around 3% in the second half of this year and growth closer to 2.75% in 1994.

Veronika White, an economist with First Fidelity Bancorp. in Philadelphia, also anticipates about 3% growth in the third and fourth quarters of this year. She said the plan may depress retail sales, which might first become noticeable during the holiday shopping season at the end of the year.

But proponents of Clinton's package, even after alterations in Congress, say the plan will bolster long-term growth in the economy by reducing the federal deficit.

Shrinking the deficit will help keep long-term interest rates low and increase the national savings rate, leading to more investment by the private sector and higher productivity down the road, they say.

But some economists are highly skeptical whether the Clinton plan will succeed in the long run.

"The plan will put a drag on growth in the short-term, but added growth in the long-term will be difficult to notice," Capitoline's Gayle said.

He pointed out that the plan relies on tax hikes in the early years and puts off the major spending cuts until later years. Gayle and other analysts wonder if the spending cuts will ever materialize. "Congress' mettle will continue to be challenged," he said.

White said another crucial question is whether the plan will generate enough revenue to enable the government to run smaller deficits in the coming years. "I have my doubts," she said. "But from a long-term perspective, it's better than doing nothing."

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