Panetta fights battle of budget from the other side Democratic Congress, popularity help budget director on some controversies nTC

April 07, 1993|By Gilbert A. Lewthwaite | Gilbert A. Lewthwaite,Washington Bureau Assistant National Editor Clara Germani contributed to this article.

WASHINGTON -- Leon E. Panetta sees himself as the man on the old Ed Sullivan television show who used to start one plate spinning on a table, then another on a string, then another, and another, rushing back and forth to keep all of them spinning.

The Clinton administration's budget director laughs at the image. But as he presents the president's fiscal 1994 budget tomorrow and begins pushing it through Congress, Mr. Panetta will find ever more plates to keep spinning.

For four years, Mr. Panetta was the Democratic chairman of the )) House Budget Committee, picking apart the last four Republican federal budgets. He will now offer his own budget for others to pick apart.

It is role reversal almost as complete as the poacher turned gamekeeper, but the turf on Capitol Hill remains familiar, and at least most of the poachers he faces are fellow Democrats, making his budget the first in 12 years to have a real chance of passage.

Pondering his move from one end of Pennsylvania Avenue to the other, Mr. Panetta said: "On Capitol Hill, you face some very tough votes and you have to make some very tough decisions . . . but that doesn't happen every day of the week.

"Here, the fact is that almost every day there is a difficult decision to be made, and with a new administration you have to make sure you coordinate with the right people."

Every day in his second-floor office in the Old Executive Office Building, Mr. Panetta helps the administration make the tough calls, whether it is raising taxes on the better-off recipients of Social Security, cutting spending on programs that will cost jobs, or introducing an energy tax that will hit everyone.

A Republican-turned-Democrat, Mr. Panetta is the first to admit that not all his ideas have carried the day in the new administration. He was not originally a Clinton enthusiast. During the campaign, in fact, he criticized Mr. Clinton's economic plan as not being sufficiently tough on the deficit.

He now finds himself surrounded by close Clinton campaign advisers, including Robert E. Rubin, the Wall Street investment banker who now heads the new and influential National Economic Council; Laura D'Andrea Tyson, who advised Mr. Clinton on trade and now chairs the Council of Economic Advisers; and Robert B. Reich, mastermind of the Clinton campaign's economic blueprint, who is now labor secretary. Also at the table is Treasury Secretary Lloyd Bentsen, a patrician and powerful presence.

Mr. Panetta "knew he was going to be competing with a number of other people for the president's ear on economic matters, and his view was only one of several," said Stanley Collender, budget director for Price Waterhouse in Washington. "There's no doubt he didn't get everything he wanted."

Mr. Panetta wanted to freeze Social Security cost-of-living adjustments for a year, but it was too much of a political hot potato for a new Democratic administration to handle. He wanted more spending cuts but couldn't convince the president that Congress would accept them. He wanted to put the spending cuts ahead of the stimulus package, but Mr. Clinton, anxious to spur the recovery and create jobs, put spending on the fast track.

Much to Mr. Panetta's satisfaction, his former colleagues in Congress sided with him, increasing the administration's spending cuts and passing the budget resolution ahead of the stimulus package.

Despite his devotion to cutting the deficit, Mr. Panetta has not been above cutting deals on the Hill to garner support for the president's economic program.

When the Massachusetts delegation, led by Sen. Edward M. Kennedy, pressured for federal funding to clean up the Boston Harbor, Mr. Panetta went along with a $100 million outlay. It represented only a small portion of the total $6 billion cost but was still a helpful chunk of money.

The administration also gave way when a group of powerful Western Democratic senators objected vehemently to higher grazing, logging and mining fees on federal land, threatening to withhold their support for the economic package.

The higher fees were stripped out of the budget resolution passed by the House and Senate last month. While Mr. Panetta insisted that the fees would be resubmitted in separate legislation, a free-standing bill to increase the charges is given little chance of passage.

Mr. Panetta has two major advantages over Richard G. Darman, his Republican predecessor as budget director: Fellow Democrats are in political control of Congress, and he is &L personally popular with members of both the House and Senate.

"Leon Panetta brings an awful lot of integrity and credibility to the position of director of OMB with Congress," said Maryland Democratic Rep. Benjamin L. Cardin. "When he comes here and makes certain statements and certain commitments, the members feel comfortable."

Not everyone is so impressed.

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