Democrats are flocking by the thousands this week to anoint Gov. Bill Clinton of Arkansas as their presidential candidate, and his campaign bears watching by the municipal market.
For hints about what could lie ahead for government finance, bond prices, and interest rates under a Clinton presidency, we telephoned his headquarters in Little Rock last week for a copy of Putting People First -- A National Economic Strategy for America.
The 21-page booklet, delivered by priority mail within two days, describes what Mr. Clinton hopes to do if he overcomes President Bush and Ross Perot in November. And there is promise of help for cities.
Like documents of this sort, it badmouths the opposition. The Republican policy of "cutting taxes on the richest individuals and corporations and hoping that their new wealth would 'trickle down' to the rest of us has failed," Mr. Clinton declares in the booklet.
Richard G. Darman, the White House budget director, has called Mr. Clinton's strategy "transparently phony," and Vice President Quayle has dismissed it as a liberal's "tax and spend" creed.
The apparent Democratic nominee says he will strive to close both the budget deficit and the investment gap. He will rebuild America, create millions of high-wage jobs, and smooth the transition from a defense-based economy to one based on commerce.
He will renovate roads and bridges, build a high-speed rail network, develop "smart" highways and short-haul aircraft. He will start a national information network that eventually will link every home in America. He will work on environmental technology and defense conversion.
To do this work, Mr. Clinton would create a Rebuild America Fund, invest $20 billion of Federal money each year for four years, and leverage that amount with state, local, private sector, and pension fund contributions. Presumably, the municipal bond market would play a role and bond issuance would increase.
If he wins in November and carries out his strategy, Mr. Clinton predicts the federal government's $400 billion annual deficit will shrink to $141 billion by 1996 if the economy grows moderately, and to $76 billion if it shows strong growth.
He will reduce the deficit by cutting spending and raising taxes, mostly on the "very rich." If he suceeeds and if inflation remains under control, the bond market will be in wonderful shape.
Well, there's a long way to go until Nov. 3, and a three-sided race is more unpredictable than most. But if Bill Clinton wins, the Democrats will have shifted toward the political center and may treat the federal deficit more seriously, and the municipal bond market will have lots of work to do.