(FORTUNE Magazine) – As John Kerry took to the stump in Detroit in late March to promote his economic plans, one of the people by his side was someone most campaign watchers hadn't seen there before. Gene Sperling, the former director of President Bill Clinton's national economic council, was doing all the things that high-profile campaign advisors do: huddling with the candidate between speeches; doing TV interview after TV interview; taking cellphone call after cellphone call with the press and other campaign officials. Sperling's appearance proved that Kerry, the Democratic nominee presumptive, is no longer trying to stoke his party's base. He's trying to soothe the broad, sensible center of American politics. And that means one thing above all: It's time to channel Bill Clinton.

When it comes to domestic policy in general and economics in particular, Kerry's general election campaign is going to try to wrap itself in Clintonomics--both the policies and, more critically in political terms, the results of the former President's years in office. Kerry is listening closely to a group of former Clintonites who are helping him finally unveil some concrete economic proposals, including his March 26 call to overhaul corporate taxes (see table). Politically, Kerry obviously hopes that the proposals, and those that will follow over the next month, will give him some buoyancy, given the widespread economic angst that still exists about jobs and deficits. Whether they will work economically--a subject we'll get to in a minute--is another question.

Considering the nation's strong economic performance in the '90s, particularly during the last four years of Clinton's tenure (unemployment below 4%, minimal inflation, and a soaring stock market), seeking help from his people would seem like a no-brainer. But there is irony in it for the Democrats. Many, including the former President himself, were infuriated by Al Gore's hesitance to run on Bill Clinton's economic record four years ago. Kerry will not be so reluctant.

That is clear not so much because of what the candidate has said or proposed but because of who is buzzing around him as the campaign goes forward. After his March 26 economic speech, it was Sperling and Roger Altman who took the lead in promoting it. Altman, now chairman at Evercore Partners, a private-equity firm, was a high-ranking Treasury official under Clinton until he got caught up in the Whitewater mess. Both men repeatedly mention that former Treasury Secretary Robert Rubin, the poster boy for Clinton's economic success, informally advises the campaign on economics.

Politically speaking, the messengers were at least as important as Kerry's message that day. The subtext of their presence was obvious: Decry the "bubble economy" of the late '90s all you want--it still beats the unease now prevalent about outsourcing, jobless recoveries, and big deficits.

Looking to the fall, Sperling makes it clear that Kerry's economic team will be pitching one thing above all else: competence. In terms of economic policy, centrist Democrats--Clinton Democrats--believe that they are the grownups and that people trust them more than they do Republicans to make the right, and sometimes tough, decisions. Further, they believe--and so far, most polling backs them up--that despite what is now a solidly growing economy, Bush is vulnerable on the domestic front, mainly because of continuing job insecurities.

Thus Kerry's first major economic policy announcement of the campaign, which was classic Clinton: a couple of ideas that made it plain that Kerry was trying do something about jobs--and in particular this year's economic bogeyman, outsourcing--without doing anything crazy. Kerry proposed a change in the tax code that currently subsidizes companies to keep profits abroad. He would eliminate that subsidy in return for a lower overall corporate rate, in hope that companies might move some money and jobs back to the U.S. In addition, Kerry says he would offer a tax credit--which would cost $22 billion over two years and be funded by a one-time 10% tax on the repatriated profits--for manufacturers adding employees at home.

That is all arguably fine, as far as it goes. But the fact is, it doesn't really go that far. A recent study by consulting firm A.T. Kearney shows that few companies locate factories or offices (and thus jobs) abroad for tax reasons. And those that do would probably find ways around Kerry's proposal. That's what accountants are for. Economically speaking, in other words, it's not likely that Kerry's plan would have much of an impact on the economy, for good or for ill. "It really doesn't make a big difference one way or another," says Mark Zandi, chief economist at Economy.com. "I really see it as a creative attempt to talk about these issues without doing a lot of damage."

And that is precisely the point. As long as the recovery remains jobless, at least Kerry will be seen as willing to try something, in contrast with the Bush team, which seems to just cross its fingers and hope for the best when the monthly job numbers come out.

Kerry is playing a similar finesse game when it comes to trade. For all the gruff rhetoric he spouted on the subject during the Democratic primaries, few economists believe that Kerry is out of the internationalist mainstream on the issue. He says in speeches, for example, that he will hold China "accountable" for valuing its currency artificially low and boosting exports at U.S. manufacturers' expense. But good luck getting a Kerry economic advisor to tell you what "accountable" means. The fact is, as with Japan and the U.S. in the 1980s, China and the U.S. are becoming so economically intertwined that any serious trade retaliation is folly. Kerry appears smart enough to know that.

Democrats, moreover, conveyed the impression during the primaries that they'd raise heaven and earth to persuade our less developed trade partners to adopt labor and other standards that would significantly raise the cost of their goods (and thus allegedly save American jobs). But trade agreements with labor and environmental components were actually fairly common during the Clinton years: What they said was that the trade partner in question had to enforce its own laws and regulations on wages and environmental standards, not ours. Kerry is not likely to stray far from that model.

Kerry's people--that is to say, Clinton's former people--try to draw a link between an economic policy run by grownups (a.k.a., them) and the confidence that business executives need to hire more workers. Sperling conjures up the relatively "disciplined approach" of the Clinton years on fiscal policy ("when people [on both sides of the political aisle] really did ask, 'How are we going to pay for this?'"), which he contrasts with the "anything-goes, bidding-war, free-for-all" climate he says exists now in Washington. "That's Bush's biggest fault, in my view," Sperling says. "The [public's] sense that the U.S. has an unmanageable fiscal future." In turn, he argues, that has helped "undermine the confidence people need to hire. I really believe that."

Politically, Kerry's economic proposals may make sense. But where politics ends and economics begins, he's got some trouble. Simply put, the candidate's tax and spending proposals don't add up. Economist Zandi puts it rather clinically when he says, "What I don't like about Kerry's plan is that it's budget-neutral compared to the President's plan." In other words, when it comes to budget deficits as far as the eye can see, there's not a dime's worth of difference between Kerry and Bush. At least not so far.

Kerry has said repeatedly throughout the campaign that he would bring down the deficit by half, to about $250 billion, during his first four years. But in the primaries and ever since, Kerry has also said he would raise taxes only on those with incomes above $200,000. That would include resurrecting the estate tax--or "death tax," as Republicans prefer to call it--as well as rolling back Bush's tax cuts on dividends and capital gains.

Kerry insists, however, that he would retain the child tax credit and the reduced marriage penalty--the repeal of which, he says, "would cost the typical middle-class family with two children an additional $2,000." Kerry has even called for a middle-class tax cut of unspecified proportions (shades of Clinton circa the 1992 campaign--a pledge that was quickly dropped once he was in office).

The problem for the campaign is how to fit those proposals into Sperling's vision of what Kerry's economic plan should be: smart, sober, and fiscally responsible. Everyone this side of the most crazed supply-side economist concedes that getting a grip on the deficit is a worthy goal and that it will have to be done through a combination of tax increases and spending cuts. The Bush campaign's proposals on this score don't impress much of anyone. But, as Zandi says, neither do Kerry's.

On the spending front, major cuts in defense are presumably out of the question unless al Qaeda and its Islamo-fascist allies suddenly become Quakers. Social Security? Please. Medicare or other health-care spending? Well, part of Kerry's platform is a health-care overhaul that would cover more than two-thirds of the 26 million Americans who are currently uninsured. It's a plan that in fact gets pretty good reviews from some health-care economists. Its basic thrust is to use existing programs to expand coverage, not to completely reinvent the health-care wheel as the Clintons tried to do. The problem from Kerry's standpoint is that it would cost roughly $900 billion from 2004 through the year 2013, according to Emory University's Ken Thorpe, a leading health-care economist. In fairness, Thorpe has said that over time the plan may create some efficiencies, making it possible that the overall cost would come in at less than $900 billion. Still, Kerry himself has said that Thorpe's cost estimate is in the ballpark.

Polls show that health care by itself is a winning issue for the Democrats. And Kerry's plan is not completely pie-in-the-sky. As Zandi points out, dealing seriously with skyrocketing health-care costs would have the added benefit of allowing employers to add more workers to their payrolls, because they'd be cheaper to hire. But, as outlined, the Kerry plan is expensive, and the campaign has not amended it yet in a way that might trim some of the costs. That's why, at least so far, the GOP has a point when it raises questions about how Kerry would pay for it. Says Glenn Hubbard, former chairman of President Bush's Council of Economic Advisors: "John Kerry has a fiscal surprise in store for the voters: a massive tax increase or a ballooning federal deficit."

FORTUNE asked several economists without a political horse in the race whether it's possible to cut the deficit in half in four years and retain Bush's middle-class tax relief and offer a new health-care plan that costs roughly $900 billion--and pay for it all by raising taxes on those with incomes over $200,000. Their answer: not without raising the top individual tax rate to well above 40%, a level this country hasn't seen in 20 years, or cutting spending in a way that no politician would dream of talking about publicly during a campaign, given the realities of Washington.

That is the dilemma the Kerry team faces. We'd like to be able to tell you how it intends to make its budget and tax plans more credible. But we can't. For more than a month FORTUNE sought an interview with Kerry to talk about his economic plans, but he declined. The campaign's detailed economic positions are clearly still a work in progress. In the meantime, Kerry's team parries questions about its numbers' adding up with jibes at Bush. "Hey, at least people are talking about fiscal responsibility now," says Sperling. "First time that's happened in three years!"

But privately Kerry's people understand that "they definitely need to put more meat on the bone," says one of Kerry's advisors. "And they will." Over the next month, his aides say, he will make two more "major" economic speeches that will include more details.

Politically speaking, Clinton might tell them to hurry up. With the details of the Kerry plan still being thrashed out, the Bushies are hard at work talking about all the tax increases Kerry has voted for over the course of his Senate career, warning that past is prologue. Kerry and his team yell "Distortion, distortion!" every time that happens. But the fact is, finding damaging stuff to shout about over the course of 20 years of votes is like shooting fish in a barrel. Kerry could ask his former longtime colleague Bob Dole, Clinton's opponent in 1996, about that.

Sperling says that one of the lessons Robert Rubin taught the Clintonites in the 1990s was that "good economics is good politics." That was particularly true of the tax increases in 1993 that helped move the budget toward balance and eventual surplus. With Kerry surrounding himself with ex-Clintonites, the question now is whether what Rubin said holds true in campaigns and not just while governing. In this run for the White House, at least so far, neither side's numbers add up when it comes to the nation's fiscal future. Will John Kerry have the guts to change that?

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