The big question that keeps coming up in this thread is... who is Tsongas's running mate and successor?
Given that he's a white ethnic from the northeast, I imagine that he'd need somebody from middle america or the south. I also think that he would pick somebody moderate-to-conservative in the Democratic Party. To me that pretty much means Gore, Nunn, or Gephardt. Maybe David Boren or Zell Miller. Boren would be fun given that Goldwater said he ought to have been elected President. Evan Bayh might also be a possibility, though he's still pretty green at this point. Two young Indianan VPs in a row would be amusing.
Tsongas won't have as bad a 1994 midterm as Clinton did. I imagine, given his deficit hawkishness, that he wouldn't go for the same comprehensive health reform that Clinton did. He'd try for something more modest and budget-friendly if he tries at all. Modest medicaid expansion? CHIP? Middle-class insurance subsidies? Paid family leave?
Tsongas opposed middle class tax cuts but supported cutting capital gains taxes on stocks and bonds (but not real estate). I imagine this would extend either to (1) corporate tax rate cut as well, (2) more pro-investment loopholes like being able to carry forward losses and not pay taxes on money reinvested into the business, or (3) some combination thereof.
I think it'd be very amusing if the 1994 Massachusetts Senate Race involved a Republican (Mitt Romney) who supported the administration and a Democrat (Ted Kennedy) who opposed it. Romney's kind of wonk-business-mercantilism fits very well with Tsongas. Kennedy would lambast Tsongas's fiscal policy whereas Romney would support it.
Tsongas would pass NAFTA while president. He also would be pretty into giving the Japanese a whack.
Tsongas probably doesn't piss off the populists the way Clinton did. His snubbing of Casey in 1992 wasn't very wise.
Tsongas's mercantilism wasn't of the tariff sort. I imagine there'd be more support and funding for the Export-Import Bank, Small Business Administration, and government research.
Shifting the US towards a more pro-savings (and thus more pro-investment) model would be impactful. The US is a very low-savings country relative to many others. The material condition of many americans would be a bit tighter (due to less consumerism, less imports) and there'd be fewer flows of american capital abroad (so less growth in China, not sure about Mexico). Abundance of capital would mean real interest rates would be lower, which is good for borrowing and investing. The question is, what is that borrowing and investing going into. Houses? Manufacturing? Pharmaceuticals? Services?
Less debt will also mean lower real interest rates.
There's going to be big Foreign Policy differences. Bill Clinton saw himself as a Domestic President and kind of phoned in the international stuff. This isn't to say he wasn't intelligent, it's that it very much wasn't his area of interest. In contrast, Tsongas wanted the US, Europe, and the Pacific Rim to collectively invest in a second Marshall Plan for Eastern Europe. Tsongas's 10 years in the House and Senate would mean he'll have much more alertness with regards to things abroad than Clinton did.
Tsongas was also just more socially liberal than Clinton was. I doubt we'd get DOMA under Tsongas. I figure there'd be more environmental conservation under Tsongas.