President Clinton headed down the electoral home stretch Monday, taking credit for a bit of sunny economic news: the smallest budget deficit since 1981.

Opening a campaign swing through three Midwestern states, Clinton announced that the deficit for the fiscal year that ended Sept. 30 was $107.3 billion. The White House said the drop was due largely to a stronger economy than the administration had projected.Republicans said it was their work that had brought the deficit down.

"This is a huge credit to the common-sense Republican Congress, which fought for spending constraints," party chairman Haley Barbour said.

But the administration disagreed. "The spending reduction since the Republican majority's been in place has been relatively modest compared to the overall total, although we have been able to work with them in the last year on a mutually acceptable budget," said budget director Frank Raines, who accompanied Clinton here.

With the deficit falling four years in a row, the administration said Clinton has more than fulfilled his promise to slash the deficit by half in four years. Raines acknowledged that the deficit is expected to grow in 1997.

The ever-diminishing deficit was one item on the four-point sales pitch Clinton was making as he courted voters from the Washington suburbs to politically vital Pennsylvania and the Midwest in the final days of the campaign against Republican Bob Dole.

Before arriving in St. Louis, he told a crowd in Nashville, Tenn., on Sunday that the nation would be better off with the targeted tax cut he has proposed because his plan would not cause the deficit to climb again.

"Now we can finish the job of balancing the budget and do it in a way that reflects our values," Clinton said.

Besides the budget deficit, Clinton's four-point agenda also includes education, safe communities and welfare.

In Nashville, he stressed that the welfare law he signed in August was "a good thing" that will succeed only if private sector companies hire people as they come off the public assistance rolls.

The government, Clinton said, will not be able to put massive numbers of people to work as it has in the past. "This is not the New Deal and the Great Depression anymore," he said.

"We may not be able to get enough private sector jobs in the short run," Clinton cautioned. "But in the end, we can do this. We have got to take this law and make it live in the lives of all people."

The president concentrated his efforts Sunday on building support in places where Republicans have enjoyed a solid base.

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Before traveling to Tennessee, a state he carried in 1992, Clinton addressed a rally in northern Virginia, which last supported a Democrat for president in 1964, when Lyndon Johnson won in a landslide.

The estimated deficit announced by Senate Budget Committee Chairman Pete Domenici, R-N.M., and House Budget Committee Chairman John Kasich, R-Ohio, represents the lowest deficit since $79 billion in 1981.

It is the fourth consecutive decline, down 33 percent from $164 billion last year. The deficit reached its height, $290 billion, in 1992.

After Monday's stop in Missouri, Clinton planned to campaign in Minnesota, Illinois, Ohio and Pennsylvania before going back to the White House Tuesday evening. He is campaigning non-stop until Nov. 5 election.

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