LOCAL TAXPAYERS AGREE CUTS ARE NEEDED

President Bill Clinton has issued a call for national sacrifice. While it remains to be seen how Americans will respond to this call, a panel of six Cape Girardeau residents shared with the Southeast Missourian a guarded optimism that Clinton's sweeping economic package will accomplish at least some of its goals.

However, the panelists insisted that the "shared sacrifice" must truly be shared and that there be, as one panelist described it, "a level playing field" of obligation.

The panel, convened Wednesday at the Southeast Missourian offices, was not intended to be a group of experts, but merely a cross-section of people affected by tax and economic policies.

The panel included:

Kermit "Moose" Meystedt, president of Genesis Transportation Co.

Calvin Bird, director of the Cape Girardeau Civic Center.

Robert Mothershead, chief financial officer of General Sign Co.

Don McGill, vice president and sales manager for Admiral Plastics.

Cecilia "Skeets" Sonderman, former newspaper reporter and city council member and an advocate for senior citizens.

Cora Lee Sample, a co-owner with her husband, Doyle, of Sample Carpet & Decorating Center and Pop's Pizza Restaurant.

The economic program that the nation's chief executive unveiled before Congress Feb. 17 has some small-business owners contemplating plans to expand and hire. But, it has left others holding back, awaiting more information.

Clinton's proposal to boost the economy and cut the deficit is a complex package that would trim the budget imbalance by $325 billion over four years, expend $169 billion to stimulate the economy, raise $246 billion in increased taxes and reduce spending by $247 billion.

The program would impose higher energy taxes, higher income tax and corporate tax rates, and larger taxes on Social Security benefits.

The panel was in agreement on some points, including the need to finalize the plan, make significant spending cuts and ensure no groups shoulder an excessive tax burden.

The group also agreed that energy costs will create the biggest hardship.

The energy tax implications have forced some companies to delay production of their price catalogs.

"We're concerned about the effective date," said McGill. "We're holding up on our catalog because we don't know what is going to happen to energy prices, and this will definitely impact our prices. Every time I listen to a broadcast it seems there is something different. We need to see something happen."

Meystedt concurred that the focus is on energy costs.

"I'm in the transportation business," said Meystedt. "We have a small coast-to-coast trucking line, and my focus is what's in store for Genesis Truck Co. on this broad-based energy tax."

Meystedt said his firm has 40 tractors and they travel five million miles a year.

"It's simple to compute that at five miles per gallon of diesel fuel, we're buying one million gallons a year. That's what we purchased in 1992. It's also easy to compute that every 10 cents a gallon for fuel means another $100,000 a year in costs for little Genesis, And we've heard diesel prices could increase as much as $1 per gallon over the next few years."

The BTU tax will have a direct impact on General Sign Co., Mothershead said.

"Our utilities are already in the $90,000 to $100,000 range, because of the amount of aluminum used in various production programs."

The Aluminum Association reports that energy is the single largest (30 to 40 percent of total costs) cost of producing aluminum, and that a significant energy increase would cause U.S. aluminum companies to lose ground to foreign producers.

Mothershead added that other factors, such as freight costs, also contribute to increased costs.

"All sign companies, however, will have the same problem," added Mothershead. "We'll all be playing on a level playing field. Everybody has to shoulder the burden."

Sample pointe out, "We have a lot of deliveries. With the proposed new energy tax, this will result in higher freight costs. We're already heavily taxed."

Many businesses and shoppers appear to be apprehensive about the new proposals, noted Sample.

"We've noticed this in customer spending," she said. "A lot of people are buying only the necessities."

Energy costs will affect many senior citizens, said Sonderman.

"We have senior citizens out there who can't pay their utility bill now," she said. "If the bills increase some of these people may have to leave their homes and go into an apartment where heat may be less."

Sonderman said the increase in Social Security, although a red flag in the eyes of many elderly, should not affect too many senior citizens.

Currently, Social Security beneficiaries with total income including interest from tax-exempt bonds of more than $25,000 single, or $32,000 for a couple, pay taxes on up to 50 percent or one-half of their benefits. Clinton's plan would raise the portion of benefits subject to tax to 85 percent.

"I have talked with many senior citizens," added Sonderman. "Most of them agree that something must be done about the growing deficit."

However, Sonderman's greatest concern is not the proposed tax increase.

"The thing that bothers me more than taxes is what has happened to interest rates," said Sonderman. "My husband and I have been saving each month since we were 50 years of age. We retired at 62, thinking that with our savings interest and Social Security we could make it comfortably. But, with interest rates the way they are now, we have lost 65 percent of our interest."

Bird said, "I'm on the other spectrum of senior citizens. I work with young people, and most of the people I work with are from families making less than $30,000 a year. The proposed income tax won't have that much impact on these families."

What will affect the Civic Center, said Bird, is that the price of some food commodities purchased by the center will increase because of increases in other areas.

"My wife and I are at the breaking point for taxes," he added. "We're not going to be taxed that much more, but prices of things that we buy will increase. We may not be affected right now, but we will be affected in the end.

"Everybody is going to have shoulder some of the burden," he noted. "My main thing is helping to prepare these youngsters for the future. If they don't plan now, they will be in trouble."

Clinton's plan for the nation's economy may also face an uncertain future, but panelists agreed that only time and more details can put it on a course of success or failure.

"I'm a man of conviction," said Bird. "I voted for Clinton and I will stick to my guns. I want to see what he can do. I'm willing to give him a chance. Let's bite the bullet and get it done. If I'm wrong about Clinton, then I will admit it."

Bird pointed out that Presidents Reagan and Bush "made decisions we didn't like, but we did them. Let's give the president a chance."

McGill observed, "I'm still confused. I always have to wait until the next broadcast to see if the president has backed off something. He should start something and stick to it."

He added, however, that he believes the president is doing the right thing. "He's throwing out the proposal, getting reaction, and looking at the program. We just need to get it done and not drag it out in Congress five or six months."

Mothershead said, "I haven't seen enough yet to say whether I support the program. I support government cuts. I think everything needs to be evaluated on what it does to the economy because the economy means everything.

"If I see that the government won't shoot me in the foot, I will be right behind the program," said Mothershead. "But, I don't want any more `pork-barrel politics.' I'll support anything that will strengthen the economy."

Sonderman said, "I'll go along with the sacrifice. We have to reduce the deficit, and we have to reduce spending."

While Sonderman said she does not favor closing military bases, she does back cutting out "silly projects like grants to determine how many spots there are on a spotted owl."

Another economic priority for Sonderman is rebuilding a manufacturing base in the United States.

"It makes me sick to see a boot or shoe factory close in the U.S. and relocate to some foreign country because taxes are less. We need manufacturing here to create more jobs."

Meystedt noted, "It's a little early for me to say whether I favor the program. If we have shared sacrifice, and make this a level playing field, we'll adjust. We adjusted to Reagan and Bush, and we can adjust to Clinton. We don't mind the sacrifice."

Sample said she wants to see more cuts in government.

"The salaries of politicians and their staffs are too high," she said. "Our legislators are overpaid now, and (they) seem to give themselves raises each year."

One of the tax proposals by Clinton would put a pay freeze on three million federal workers for a year. After that they would be allowed increases at less than the rate of inflation. Clinton has said congressional staffs would follow suit.

None of Clinton's proposals offer immediate cures, Bird emphasized.

"We're trying in the country right now to rectify things in eight or nine years that have taken 30 years to create."