By Michael Rezendes and Royal Ford, Globe Staff

©Globe Newspaper Company 1995

DERRY, NH -- Testing the Republican Party's belief in a reduced role for the federal government, members of a citizen panel challenged Sen. Phil Gramm of Texas last night to explain how less government will improve the lives of average Americans.

Raising questions about white-collar job opportunities, the quality of public education and US foreign policy, the four-member panel of Derry residents also pushed Gramm into offering a detailed explanation of his philosophy of government that went beyond his oft-repeated refrain: ''I want less government and more freedom.''

Marjorie Melisi, a mother of three in her '50s who has been in and out of the work force, wondered if government should be more involved in creating jobs for workers who have been laid off in corporate downsizings.

Joel Olbricht, an accountant with two children, asked if Gramm might reconsider his proposal to abolish the US Department of Education in the interest of maintaining national education standards for public schools.

And Jo Ellen Cumpata, a 41-year-old mother with three sons, wanted to know if Gramm would support President Clinton's plan to send 20,000 US troops to Bosnia to enforce a recent peace plan.

All of the questions were asked as part of an exercise in ''citizen journalism'' sponsored by the Boston Globe, television stations WABU (Channel 68) and WNBU (Channel 21) in Concord, N. H., and radio station WBUR (90.9 FM).

The project is designed to give residents a voice in presidential campaign coverage by allowing them to meet the candidates and define issues that are important to them.

In nearly every instance, Gramm's responses to the questions posed by the panel were consistent with a world view that holds that policy decisions are best made by families sitting around their kitchen tables ''trying to figure out how to pay the mortgage or the rent.''

Similarly, in explaining his opposition to President Clinton's plan to send troops to Bosnia, Gramm said members of Congress voting on the proposal should ask themselves if they would send their own children to the conflict in the Balkans.

''I think that's one of the tests that ought to be applied,'' Gramm said.

Answering specific questions of the Derry panelists, Gramm said he believes the federal government can best tackle the problem of unemployed white-collar workers by creating an economic climate that encourages business investment and job growth.

''It's always tempting to have the government do more, but we always have to pay for it,'' Gramm said.

Balancing the federal budget, Gramm added, would mean lower interest rates that would result in greater investments in new businesses and job growth. ''There's no government program that can substitute for a private job,'' Gramm told the panelists.

Responding to a question about the appropriate role for federal government in public education, Gramm stuck by his proposal to abolish the Department of Education. He said parents and local school districts are better equipped to make decisions about what local schools teach and how school districts spend money.

''It's too important to be controlled by the federal government,'' Gramm said.

Half of the money spent by the Education Department, Gramm said, should be returned to parents in the form of tax credits, and the remainder sent to school districts.

When Olbricht asked what Gramm would do as president to ''encourage . . . and bring family values back to where they used to be,'' Gramm preached the gospel of smaller government.

''I believe government programs and . . . policies have helped create some of these problems,'' he said.

Specifically, Gramm said the federal tax system penalizes married couples, while the welfare system encourages illegitimate births by giving more money to mothers on government assistance.

Gramm's espousal of smaller government was perhaps most evident when he explained his plans for revamping the tax system.

''The most important tax reform is to not spend the money,'' he said.

Gramm has pledged to balance the federal budget in his first term as president, if he is elected. He has also promised not to run again if he fails to reach that goal.

Gramm also said he favors abolishing graduated income taxes in favor of a flat tax, largely because of the myriad deductions for special interests and the wealthy. ''It's a totally rotten system,'' he said.

Gramm said he believes that for a flat-tax proposal to be approved, it would have to retain deductions for home mortgage interest and charitable contributions. It also could not reduce the overall amount of taxes the government collects.

Reponding to another question about welfare, Gramm said federal assistance programs can destroy the work incentive by providing benefits that exceed the salaries of some entry-level jobs.

In the District of Columbia, Gramm said, the average pretax welfare benefit is worth $22,000 a year. ''I pay Harvard graduates $18,500 per year to come to work for me,'' he said.

In some cases, he said, welfare is necessary. ''If the best job somebody can get is $4 per hour, we ought to supplement their income where they're better off working.''

But when assistance is required, he added, those receiving the government's largesse should be required to give something back.

''If somebody can't find a job, we ought to ask them to pick up litter along our streets and highways, help clean up our parks, wash windows in public buildings, ask everybody to contribute,'' Gramm said.

Ultimately, Gramm said, government should leave more choices to families.

''I see an active role for government'' in such areas as criminal and civil justice, he said, but ''I want families to make more decisions.''

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