But now that the economy is faltering, there is some talk at City Hall of halting the tax cuts. That's the worst message Mayor Nutter and City Council could send to workers, businesses and residents.

Ending the meager wage- and business-tax cuts already on the books - as well as failing to push ahead with the business cuts proposed by the mayor - would signal that the city is headed in the wrong direction.

Instead, Nutter and Council need to take a hard look at the spending side of the ledger.

Their task isn't easy, by any means. While Nutter and Council need to plug holes in the budget that opened in recent weeks, they should not alter the general goals set out by the new administration: that is, to streamline and improve city services, meet the looming demand posed by employee pension costs, and soon reach fair but affordable contracts with the police, fire and municipal unions.

But the early reports from talks between the mayor and Council last week raised some red flags. Since some Council members seem ready to go south on the tax cuts, it made even less sense to propose new spending (such as additional city hires, or Council staff raises that should await union contract results).

It's time for the heavy lifting that's missing in the Nutter administration's first stab at the budget. With good reason, the $4 billion budget was described as crowd-pleasing. It proposed smart new investments that should be retained in some form - for police and fire protection, parks, the community college, and more.

But the new spending relied in large part on tax revenues that since have softened, and $50 million that would have been freed up by a potentially risky deal to sell $4.5 billion in pension bonds.

It's good news that the bond deal may be scaled back, delayed or even scuttled. The mayor's plan to shore up the pension fund by borrowing billions comes with costs and risks that need scrutiny.

That, of course, leaves a city budget to balance in other ways. Nutter knows how, since he launched this budget round by asking city departments to trim spending by 3 percent to 5 percent. Other efficiencies could produce further savings.

Meanwhile, no one should forget candidate Nutter's pledge to "continue my leadership in reforming the self-defeating tax structure in Philadelphia."

That's the right course.