Balance Sheet

Assets

Cheap Executives. Governors take a walk on the supply side. New Jersey's Christine Whitman proposes a retroactive 5-percent income-tax cut. Virginia's George Allen backs a constitutional amendment to require a two-thirds majority vote before the legislature can raise taxes. And Mississippi's Kirk Fordice calls for higher standard exemptions for families with children. The Cato Institute's Stephen Moore says look for more tax cuts in state houses this year.

Stern Rebuke. The Federal Communications Commission temporarily curtails its crusade against Howard Stern. The FCC lets Stern's employer, Infinity Broadcasting Corporation, buy KRTH-FM in Los Angeles. Commissioners delayed the deal, driving up Infinity's purchase cost. As of early February, the FCC still hasn't let Infinity buy two other stations it wants.

Disloyal Opposition. ClintonCare's high costs and price controls draw the wrath of managed competition's architect, Stanford economist Alain Enthoven. "The Clinton plan puts the federal budget at enormous risk and will result in huge tax increases," Enthoven tells the American Insurance Association. "The first thing Congress should do is delete pages 1 through 1,342 of Clinton's 1,342-page bill."

Express Lanes. Ever so slowly, governments let congestion-pricing highway projects begin. The feds permit increases in peak-hour tolls on the San Francisco-Oakland Bay Bridge. The California legislature lets solo drivers pay to "rent" open space in high-occupancy-vehicle lanes on the I-15 in San Diego. Arizona asks the U.S. Department of Transportation to allow single-occupancy HOV-lane renting in Phoenix.

Liabilities

Struck Out. The tough-on-crime crowd ignores one consequence of the "three strikes, you're out" frenzy: courtroom gridlock. In 1992, plea bargains averted trials for 42,339 persons indicted in U.S. district courts--73 percent of all felony suspects; with a three-time loser law, everyone indicted would demand a trial. Forget building prisons. What about courtrooms?

Clintongue II. The State of the Union address drips with presidential doublespeak. While pushing tougher gun-control measures, Clinton says, "Law-abiding adults should always be free to own guns"--a rather NRA-ish position. And he praises the federal employees' health program, saying, "We need to give every…American the same health care security they have already given to us." The Heritage Foundation proposes exactly that. Does Clinton prefer Heritage to Hillary?

The Welfare Channel. "Deregulator" Al Gore invents a new entitlement--the right to HBO. Gore backs an end to regulations on cable, telephone, and satellite technologies, with a catch: The "less fortunate sectors of the population" get government subsidies to ride the information highway. As Los Angeles Times technology columnist Michael Schrage says: Can't afford cable? Read a book.

Recovery Pan. Last year's steady economic growth--a temporary blip? Notes Washington Post trend spotter Jim Glassman, the new top marginal tax rate (including Medicare) for the super-rich is 41 percent--a 28-percent increase above 1993's top rate. Glassman fears higher taxes will stifle investment. "You don't have to be a supply-side ideologue," he says, "to recognize that people can't spend money they don't have."