White House weighs revival of tax cut idea


WASHINGTON -- President Clinton's respite on Martha's Vineyard has rendered him rested and relaxed, aides say, but today he returns to an array of unfinished business -- including whether to revive a long-dormant campaign pledge to cut middle-class taxes.

This idea, which one aide said is kicking around at mid-levels in the White House, appeals to presidential advisers desperate for something, anything, that would offset what are projected to be debilitating Democratic losses in Congress in the November midterm elections.

"I think it's a good idea, and I think it's almost inevitable," said Will Marshall, president of the Progressive Policy Institute, a think tank that often opposes traditional liberalism in favor of centrist policies. "This administration badly needs to get back to the . . . themes that powered his election, such as 'the forgotten middle class.' "

Centrist Democrats such as Mr. Marshall and Dane Strother, a political consultant who represents several conservative Southern Democrats in Congress, believe that proposing a tax cut would not only be wildly popular as a pocketbook issue; it might also signal the revival of a candidate who promised in 1992 to be a "new kind of Democrat."

But it is not the only such issue.

The administration's own polling data show that on several other issues also seen as centrist or conservative, the public wants action. Those include streamlining government, crime legislation and welfare reform.

The president signed a crime bill before leaving for vacation -- one that was attacked by both liberals and conservatives, but enjoyed strong support from the center. But although Mr. Clinton has proposed ambitious plans to reform welfare and to "reinvent" government, the follow-through on those issues has taken a back seat to health reform.

With the administration's ambitious plans for health reform stalled, many Democrats would like the president to somehow extricate himself from health reform -- not to mention potential pitfalls in Haiti and Cuba. Instead, they would like him to concentrate on welfare reform and the other domestic issues.

Mr. Strother, who represents several Democrats who are in tough re-election fights, hopes that it will happen even before November.

"Welfare reform is popular everywhere in the country, especially the South," he said. "People want to see some cuts. And more cuts."

White House officials say that they have far too much invested in health reform to walk away from it now. They also concede that hashing out the details of even a scaled-down program threatens to eat up the legislative calendar until election time.

At the same time, they insist that the president will use the time dTC before the midterm elections to show that he understands the values of the middle class. On Friday, for example, Mr. Clinton is scheduled to deliver a speech to the National Baptist Convention in New Orleans. He is expected to speak, as he did in a widely praised speech in Memphis earlier this year, about the need to exercise personal responsibility.

In so doing, Mr. Clinton hopes to mend fences with evangelicals. He also is harking back to his roots at the centrist Democratic Leadership Council, which was formed in the 1980s as a counterweight to traditional liberal groups that had come to dominate the party.

On Monday, Mr. Clinton will hold a reception to trumpet the kick-off of his National Service program, another idea long championed by the leadership council.

Finally, the administration will try to persuade Congress to ratify the pending General Agreement on Tariffs and Trade (GATT). This agreement has received much less attention than the North American Free Trade Agreement but would have more far-reaching effects on U.S. businesses.

On all those issues, Mr. Clinton is trying to lead the modern Democratic Party in directions it has not necessarily wanted to go, and which polls show are popular with a majority of Americans.

And yet, all over the country, particularly in the South and the border states, Mr. Clinton is being portrayed by Republicans -- and is viewed by crucial blocs of swing voters -- as the president who supports such liberal causes as gays in the military, gun control and a plan for health care that is but one step removed from socialized medicine.

The president has expressed deep frustration over this perception -- he tends to blame the news media for not focusing enough on his achievements. But the perception, whether fair or not, is a fact of political life, and it leaves the president in an awkward position.

Mr. Clinton wants badly to help conservative-to-moderate Democratic members of Congress, such as Texas Rep. Martin Frost, so that he can minimize the Democratic losses in November -- and have a better chance for legislative success next year. But he is a liability in Mr. Frost's suburban Dallas district -- and similar Southern and Western swing districts -- and must, instead, content himself with appearing at closed Democratic fund-raisers or making an occasional appearance before relatively contented audiences, such as a unionized shipyard in Bath, Maine, where workers had just signed an accord with management.

Outside the White House, but within the Democratic Party, some critics put the blame less on the news media coverage than on Mr. Clinton's own priorities as president. It was the president and his advisers, they say, who made a sweeping, government-mandated national health reform their top initiative.

But earlier, when he ran for president, it was Mr. Clinton's support of a middle-class tax cut, not health care, that helped separate him from the pack of Democratic candidates.

Bringing back the middle-class tax cut now won't be easy. The federal budget deficits, while lower than projected under Mr. Clinton, have hardly vanished. And his new chief of staff, Leon E. Panetta, is notoriously hard-nosed when it comes to budget deficits.

But his broken promise has seemed to haunt Mr. Clinton. It comes up in town meetings from San Diego to Charlotte, N.C. And Mr. Clinton always says some variation of the same thing: I haven't forgotten about it, he says. Give me time.

Is now the time?

Yesterday, White House officials were coy. "It's always been something the president's interested in, it's always been something he said he would consider as circumstances permit," White House spokeswoman Dee Dee Myers told reporters on Martha's Vineyard, Mass.

"I wouldn't expect an announcement this month or even this year on it," she added. "Of course it will depend on economic circumstances as we go forward." She also noted, as the president has in the past, that Mr. Clinton was less than halfway into a four-year term.

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