Clinton shows that he counts Budget impasse leaves White House quietly delighted

THE BALTIMORE SUN

WASHINGTON -- It seems such a short time ago that President Clinton insisted, rather pitifully, that yes, he was, too, "relevant."

Well, now he's shown he's relevant all right, derailing the Republican juggernaut and shutting down half the federal government rather than accept even a temporary GOP spending plan he didn't like.

With tourists being turned away at the Lincoln Memorial and Republican leaders twisting in a cold November wind, Mr. Clinton was having so much fun calling the shots from the Oval Office that he canceled a campaign-style trip to Boston and sent Vice President Al Gore to Japan in his place.

Publicly, White House officials wore long faces over the partial shutdown. Privately, they were delighted with public opinion polls showing that American voters, by a 2-to-1 margin, blame the Republicans for the crisis more than Mr. Clinton.

A former White House press secretary, Marlin Fitzwater, once noted "Polls go up, polls go down," something the Clintonites say they realize. But after the vetoes, name-calling and government shutdowns have run their course, one question remains: What does Mr. Clinton want to have achieved from this fight?

Interviews with a half-dozen White House officials and several prominent Democratic Party professionals reveal that the president's strategists have three short-term goals:

They want the president to demonstrate to the nation that he has some backbone. They want to solidify his support among Democratic Party liberals by resisting certain elements of the Republican budget-cutting plans. Then, after having done that, they want him to align himself with the move to balance the budget, which is a wildly popular issue with swing voters.

If he can pull all this off, many of his advisers agree, the president will take a large step toward his over-arching, long-term goal: being re-elected in 1996.

"That's what this is all about, ultimately," says a Democratic campaign consultant, Dane Strother. "The Republicans know it, too."

Clinton's strategy

To accomplish his aims, Mr. Clinton wanted to back the Republicans down on their short-run, stopgap funding measures and still be able to negotiate with them on the overall budget. This document would be sold by the White House as a compromise solution more humane than the original Republican budget but more fiscally prudent than liberal Democrats would have liked.

Here is how he is trying to put that scenario together.

* Standing tall. First and foremost, Mr. Clinton, who has a reputation for vacillating on crucial issues, realized he needed to be seen as more resolute, several White House aides conceded.

One Democratic consultant who has talked to White House strategists said that in focus groups and polls of voters it became apparent that it was imperative for Mr. Clinton find an issue, any issue, take a position on it and stick with it "come hell or high water."

The budget gave him that chance, and even conservatives concede he took advantage of it.

"It looks like this president may have guts, after all," said Stephen Moore, an economist with the Cato Institute, referring to Mr. Clinton's vetoes last week. "This is what President Reagan should have done. I wrote every year that we should veto, veto, veto. The Reagan White House would talk tough -- but then caved."

* Shoring up the base. The budget battle also gave Mr. Clinton an opportunity to solidify his credentials with traditional Democratic Party liberals. These are not swing voters, but they are the foot soldiers who donate money, lick the stamps, knock on doors, and, in short, make a successful national campaign possible.

For months, as Mr. Clinton has portrayed the Republican plan to balance the budget in seven years as unfair to poor children, menacing to retirees and dangerous to the environment, his words have at times been indistinguishable from those of Congress' most intemperate Republican-baiters.

A $7-per-month increase in Medicare Part B premiums is a "crippling cut" that would cause Medicare "to wither on the vine," he says. Slimming down the administrative costs of the school lunch program is "harsh" and "extreme." Tax cuts that would give middle-class families 75 percent of the benefit are "tax breaks for the rich." And so on.

Hitting the old themes

Last Saturday, the president who promised to be a "new kind of Democrat" hit all the old, the traditional Democratic Party themes with a single analogy:

"Imagine the Republican Congress as a banker and the United States as a family that has to go to the bank for a short-term loan for a family emergency," Mr. Clinton said. "The banker says to the family, 'I'll give you the loan, but only if you'll throw the grandparents and the kids out of the house first.' "

This kind of talk may not be fair, but it seems to be taking its toll on Republican popularity. It has also emboldened the Democratic left wing, which is now pressing the president even to veto a compromise version of a welfare reform bill the White House once signaled he would sign. Even party moderates are poised to support him.

"Look, we swallowed hard and accepted the Senate version of the welfare bill," said Will Marshall, president of the centrist Democratic Progressive Policy Institute. "But the bill that is emerging from [a House-Senate] conference committee is $20 billion under the Senate. Even we, who want radical reform, think that is cutting too deeply."

* Balancing the budget. The politics of this equation are difficult, but the math isn't. Annual interest on the national debt costs nearly $250 billion, defense spending has been cut and cut, funding for most nonentitlement federal programs has been stagnant. The only way to balance the budget in seven years -- while enacting tax cuts deeper than Mr. Clinton supports -- is to eliminate certain agencies, curb the rate of increase in federal health care costs and scale back the growth in other entitlements.

Mr. Clinton and his advisers know this, and getting a balanced budget plan that the president will sign will require give-and-take -- by both sides.

Possible compromises

Interviews with conservative economists advising Congress and

White House economists advising the president reveal some obvious areas for compromise:

First, Republicans would get some of their proposed Medicare and Medicaid cuts -- Mr. Clinton has proposed some, too -- but Congress would likely have to split the differences with the president.

Next, Mr. Clinton would swallow some of the Republicans' proposals lessening the level of environmental protection because they are included in sweeping budget bills. But Congress would restore some of their cuts in education and job training, including the president's pet program, the new national service agency, AmeriCorps.

Also, some version of welfare reform would be signed into law, but only as part of a deal not to erode the Earned Income Tax Credit, the rebate program for the working poor. Likewise, the Republicans would get their capital gains tax cuts, but the GOP's $500-per-year child tax credit would be capped at families making about $100,000 a year.

If Mr. Clinton engineers all this, he could prove himself to 'N Democrats as a man who made the best of a bad situation -- and to swing voters as a man who was fiscally conservative without being hard-hearted.

And what about the Republicans' nonnegotiable demand for a balanced budget in seven years?

"Here's what they can do," says Mr. Moore. "Change the way we do the consumer price index so the cost-of-living increases on entitlements don't increase as much [annually]. And accept Clinton's [rosier] economic assumptions. Bingo! You've got a balanced budget and everybody's happy."

The bad news

That's the tidiest scenario. But there's a messy one, too.

For months, Mr. Clinton has used a good-cop, bad-cop approach on the Republicans -- casting himself in both roles. When he issues an attack on the Republican budget plans, he invariably shifts gears moments later, reminding them sweetly that his door is always open. Whether that is really true -- or whether Republicans will still feel like walking through it after being called names for six months -- remains to be seen.

Senate Budget Committee Chairman Pete V. Domenici, a man the White House had characterized Tuesday morning as a "voice of reason," went ballistic Tuesday afternoon when Mr. Clinton used the "wither on the vine" line about Medicare.

The president, he said, was "filling the airwaves with half-truths."

This kind of poisoned atmosphere raises the possibility of the no-compromise scenario. Favored by Democratic flame-throwers such as House Minority Leader Dick Gephardt, this entails the United States going all year without a budget, with Mr. Clinton basically expanding by fiat what constitutes an "essential" government service.

The White House chief of staff, Leon E. Panetta, and the press secretary, Mike McCurry, hinted at this strategy late last week. They called this approach "taking the budget to the people." By that they mean making next November's elections a kind of plebiscite on the budget.

Mr. Clinton himself, however, playing the good cop, hinted Thursday afternoon that he was more inclined to sit and negotiate with the Republicans.

But not just yet.

Carl M. Cannon covers the White House for The Sun.

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