Some months ago, President Clinton and the Congress had signed off on a "historic" balanced-budget agreement. It was an occasion that had been marked by an unseemly burst of congeniality between Clinton and the congressional Republicans: beaming uncontrollably, they had presented the gift of fiscal rectitude to the American public.

Homer dimly recalled the details of that historic agreement. There had been talk of umpteen tax cuts, mainly, it seemed, for the benefit of the middle class. And to bring the budget into balance, some spending cuts had been proposed - although, for the life of Homer, he couldn't recall what they were.

But tax cuts had been promised - and plenty of them. A per-child tax credit, some credits for higher education (a Clinton favorite), reduced capital gains taxes (a Republican imperative).

Homer sipped his coffee. The child tax credit would come in handy. The cost of raising children these days was prohibitive. With the tax credit, perhaps they might be able to afford private school for Junior. Homer was briefly reminded of P.G. Wodehouse's remark that the prospect of claiming exemptions for dependents led parents to look fondly upon their bratty kids at tax time.

Perhaps he could avail of the education tax breaks as well. The Hope credit, wasn't that the name? Very clever - hope springs eternal in the human breast and all that. Or, wait a minute, was it named after Hope, Arkansas? Never mind, it didn't matter. And there was something called the Lifetime Learning credit too, wasn't there? He had been thinking of a career change. That would mean going back to college, a course of action that he had been forced to set aside in view of the unconscionably steep tuition fees charged by institutions of higher learning. Now these education tax credits promised to bring the cost of attending college within his reach.

Talking of education, wasn't there something called an Education IRA? Something that would allow parents to set aside some money each year - $500, wasn't it? - in an account with generous tax provisions. That would help build up Junior's education kitty, Homer thought. If they contributed $500 a year till Junior started attending college, they would have accumulated enough to pay for - he did a rough calculation - a whole semester's tuition at a state school.

There had been much ado about cutting taxes on capital gains, Homer recalled. The stock market's impressive performance in 1997 had saddled his mutual fund accounts with significant capital gains. Now with the lower tax rates - a maximum of 20 percent, wasn't it? - he would be able to trim his tax bill quite handsomely.

Pleased with his ruminations, Homer drained his cup of coffee and opened the 1040 booklet.

The feeling of pleasure didn't last long. Thumbing through the booklet, Homer learned that most of the tax cuts were not yet in place. The child tax credit would become effective only in 1998, and that would be subject to a $400 limit (rising, in subsequent years, to $500.) Well, that ruled out private school. But at least, the $400 credit would pay for Junior's diapers for the year.

The Hope credit didn't hold out much hope either. That wouldn't apply in his case, and the Lifetime Learning credit - well, that would hardly make a dent in the tuition fees at a state school. Homer dejectedly reconsidered his plans to go back to college.

Matters got worse when he got to the section on capital gains. While a top tax rate of 20% had been promised for long-term capital gains, it would be applicable only under certain conditions. In fact, Homer noted grimly, there were five different tax rates depending on how long the assets had been held and when exactly they were sold during 1997. Suddenly, Forbes' flat tax didn't seem so outlandish any more.

But the news in the 1040 booklet wasn't all bad. He could, for instance, invest $500 in the Education IRA immediately. Ah, but wait - he remembered that most mutual fund families were less than lukewarm about the Education IRAs. The administrative costs associated with the smallish accounts, they claimed, would be too high - and, with pious reluctance, imposed a $10 annual fee on them. That, Homer thought fumingly, would be akin to a 2% load for the first year. He would have to search for a no-fee mutual fund.

Perhaps best of all was the Roth IRA - in which he could invest upto $2000 a year. Of course, to take full advantage of both the Roth and Education IRAs, he would have to somehow come up with $2500, a not inconsiderable sum for a professor. The $400 that he was going to save on diapers would be a start.