Power to the Senate House eclipsed Majority Leader Trent Lott sets tactics for dealing with centrist president.


WITH NEWT GINGRICH precariously perched in the House speaker's chair, and his future by no means secure, the most powerful figure on Capitol Hill this year is Senate majority leader Trent Lott. The Mississippi Republican, suave but tough, has made it clear House Republicans will no longer be setting the legislative agenda as they did in 1995 and 1996. Much of the initiative is going to shift to the Senate.

Senator Lott will begin by pushing that old chestnut, a balanced budget amendment to the Constitution. But of more immediate significance is what he will do about taxes. His latest proposal is for tax cuts ranging anywhere from $100 billion to $150 billion over five years -- an approach very much in the ball park with President Clinton's reported $100 billion goal. The nitty-gritty, however, won't be the size of the pie but what it is made of.

Both parties are pretty well committed to a $500 tax credit per child plus tax incentives for education. But Republicans, as always, are focused on cuts in the capital gains tax, and the latest word from Mr. Lott is that the president may be more forthcoming than anticipated. The White House approach is to eliminate capital gains taxes on the sales of all but the most expensive houses and negotiate over any lowering of the tax on gains from sales of equities.

Does this seeming convergence on taxes mean the Gingrich era of partisan warfare is over? Not by any means. While Mr. Clinton intends to govern from the "vital center," much to the dismay of party liberals, Democrats and Republicans remain deeply split over Medicare, the most incendiary issue on Capitol Hill.

The president is courting trouble, and will richly deserve it, if he seeks to extend the life of the payroll-tax financed Medicare Trust Fund, which covers Part A hospital expenses, by shifting the $55 billion cost of home health care to the Part B (medical expenses) program financed out of general revenues.

Republicans, who resent the way Democrats have demagogued on Medicare, rightly consider this a "gimmick" that does not save money. They want to force Mr. Clinton to take the lead on Medicare and other painful budget issues so they can retaliate with some demagogy of their own. Senator Lott will be setting the tone and dictating the tactics of the Republican majority. After the brash excess of the Gingrich heyday years, that will be welcome.

Pub Date: 1/13/97

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