Ambition, damaged leaders stall balanced budget deal Would-be successors may profit by delay

THE BALTIMORE SUN

WASHINGTON -- Put President Clinton, House Speaker Newt Gingrich and Senate Majority Leader Trent Lott in a room somewhere, says the conventional wisdom, and they could quickly agree on a way to balance the budget.

Trouble is, these leaders must cope with the ambitions of several would-be successors who threaten to gum up the works. With Clinton and Gingrich weakened by ethics controversies, neither man can easily overcome defections in his ranks.

Thus, a delicate process requiring leadership, statesmanship and political courage is being undercut, some analysts say, by a cast of characters with their own agendas and perhaps more to gain if no deal is reached.

"It's like the tail wagging the dog," said Stuart Butler of the conservative Heritage Foundation. "I find it very depressing, frankly."

For Clinton, the difficulty stems in part from the intense competition already under way between Vice President Al Gore and Missouri Rep. Richard A. Gephardt, the House Democratic leader, for the party's presidential nomination in 2000.

Gore vs. Gephardt

"Whenever the president says something on the budget process, you can be sure that soon Dick Gephardt will say something exactly opposite, because Clinton is linked with Gore," said Martha Phillips of the Concord Coalition, a group dedicated to eliminating the federal budget deficit.

Clinton is grooming Gore as his successor. And Gore, who is playing an active role in the talks, thinks it would be in his best interest for a budget deal to be reached soon. A workable agreement that proves popular with voters would be viewed as a major achievement for the Clinton administration; it could also head off budget deficits that might otherwise plague the next presidency.

Gephardt, by contrast, appeals to a more liberal base of Democrats who say Republican efforts to balance the budget would come at the expense of working Americans, the poor and the elderly. Gephardt might benefit by blocking a deal that appears to threaten such groups.

Presidential allies

With congressional investigations under way into White House fund raising in the 1996 campaign, the president -- some observers say -- cannot afford to alienate any of his potential allies on Capitol Hill, particularly the Democratic leader of the House.

"He's sort of in a real tight spot right now," Rep. Tom DeLay of Texas, the Republican House whip, said of Clinton, in words echoed privately by Democrats. "So he needs his liberal base, because if they ever leave him he's in big trouble."

That explains why Gephardt was able to easily torpedo a Lott proposal to study whether to adjust the government inflation index to achieve budget savings. Such an adjustment would reduce cost-of-living increases in Social Security benefits and push many Americans into higher tax brackets.

The Lott proposal was privately welcomed by the other key players, including Clinton, Gore, Gingrich and Tom Daschle of South Dakota, the Senate minority leader. Treasury Secretary Robert E. Rubin said he agreed with the many economists who say the index overstates the inflation rate.

But a few discouraging words from Gephardt at a private White House meeting were enough to scare Clinton off. The House Democratic leader made clear, aides said, that he was not about to quietly acquiesce to a congressional change in the index, which was vigorously opposed by labor unions and senior citizens groups. Gephardt said Republicans want to change the index to pay for a tax cut for the wealthy, an assertion denied by GOP leaders.

Shortly afterward, the White House signaled that it could not deal with the issue now.

"I think what we did was to make a rational analysis of the environment in which we were operating," Rubin said Sunday on NBC-TV's "Meet the Press." In the face of Gephardt's resistance, Clinton feared that endorsing Lott's proposal would "set the process back," Rubin said.

A wounded Gingrich

Gingrich has a similar problem on his political right. He was badly wounded by an ethics violation that resulted in January in the first-ever House reprimand of a speaker. As Gingrich struggles to regain his footing, a few Republicans are talking openly of replacing him. Others, such as House Majority Leader Dick Armey of Texas, appear to be preening for the job.

Like Clinton, Gingrich would like to refocus public attention on a historic agreement to balance the budget, a top Republican goal since the party gained control of Congress in 1995 for the first time in four decades.

But Gingrich's suggestion three weeks ago that a tax cut might be delayed until after a budget deal is struck was hooted by conservative critics, led by presidential aspirants Jack Kemp and Steve Forbes.

"Now is not the time to get wobbly on tax rate cuts," Kemp said.

And Rep. John R. Kasich, chairman of the House Budget Committee and a close Gingrich ally who is seen as a rising Republican star, took pains to distance himself from the speaker's remarks.

"A Republican Party that doesn't have tax cuts is in danger of losing its soul," Kasich said in a series of interviews shortly after Gingrich made his suggestion.

While a Kasich spokesman denied any change in views, Robert D. Reischauer, former director of the Congressional Budget Office, said the comments marked a "change in tone" for Kasich, who has long stressed the need for a balanced budget more than the need to cut taxes. As Kasich's political horizons broaden, tax cuts -- believed to be more popular with voters than spending cuts -- seem to have become a higher priority for him.

Neither Kasich nor any of the others is ready to confirm his political intentions. But today the 44-year-old Ohio Republican travels to New Hampshire, home of the first presidential primary. He follows Gephardt to the state by a matter of days. Kasich also has been mentioned as a possible successor to Gingrich.

In the Senate, Lott must contend with what is often described as a chamber full of would-be presidents, each endowed with the power to hold the budget hostage to his or her demands.

Among the players there is Sen. Phil Gramm of Texas, a 1996 GOP presidential contender still believed to be interested in the White House. He is making a pitch this year for curbing growth in Medicare spending. That is likely to be a hard sell to Republican colleagues who were attacked by Clinton for backing similar curbs in 1995 and felt that voters punished their party for that stance in 1996.

"A huge problem we have is the budget process itself: In order to achieve anything you need political heroes," said David Mason, a Heritage Foundation analyst. "We have to find a system that can function with poll-driven politicians."

Pub Date: 4/04/97

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