Economic plan presents crucial test for Clinton ON POLITICS



WASHINGTON -- After six tumultuous months in the White House, President Clinton is facing the first truly critical test of his leadership in finding a compromise with Congress on his economic plan.

The conventional wisdom here is that the Democratic Congress has no choice but to approve the plan or be written off as incapable of governing.

But it shouldn't be forgotten that just five months ago, the city was awash in optimism after the president presented the plan to a joint session of Congress. "The perception in the country was that this was a done deal," House Majority Leader Richard Gephardt recalls.

Instead, the plan squeaked through the House 219-213, its fate in doubt until the last moment, and through the Senate 50-49 only on the strength of a tie-breaking vote cast by Vice President Al Gore.

Meanwhile, after relentless and effective pounding by the Republicans, the resistance to the plan, as reflected in opinion polls, rose steadily within the electorate. Clinton was suddenly another "tax and spend" Democratic throwback to the liberalism of the Great Society.

The result is that the new president is now back at Square One in terms of bringing the public along and making it at least marginally comfortable for his fellow Democrats to go along with him.

In fact, although the plan would take a healthy whack at the affluent who so enjoyed the Reagan years, it would impose a minimal burden on the middle-class taxpayer. It would have been about $200 a year under the original energy tax proposed by Clinton and reluctantly swallowed by the House. It is now down to $50 a year from the increase of 4.3 cents a gallon in the gasoline tax.

But the key is whether Clinton and Democratic leaders on the Hill can put together the pieces in a situation in which the president has far less political capital to offer than he did five months ago. They must find a way, for example, to deal with the concerns of western legislators worried about the impact of higher gasoline taxes with those of urban congressmen who want more money for liberal programs than the plan now allows.

The Congressional Black Caucus may be a particular problem. Black congressmen were outraged when they voted for the energy tax only to see it scuttled in the Senate in what they saw as a case of Clinton caving in to Sen. David Boren of Oklahoma and a few others from Oil Patch states. At the same time, the Senate scuttled funding for the "empowerment zones" in inner cities, the earned income tax credit that rewards the working poor and immunization programs.

But putting those things back in the final version -- probably a necessity to put together the 218 Democratic votes needed in the House -- will require more money either from cuts in other programs or a higher tax on gasoline, a difficult sell to those westerners in the Senate already resisting the relatively modest levy now in the plan.

There also will be some pressure in the next two weeks for the White House to drop its target of $500 billion in deficit reduction over the next five years. But both Clinton and the congressional leaders in both houses seem to understand that any retreat from that target would send a discouraging message to the financial markets.

Gephardt, for one, thinks the context has improved for action on the plan. He points out that the economy has shown some signs of life lately and is now creating 145,000 jobs a month, seven times as many as in the Bush years, and offering middle-class homeowners a chance to realize major savings by refinancing their mortgages to take advantage of sharply lower interest rates.

The majority leader sees these signs as a strong argument for quick and decisive action.

The president, Gephardt says, has enjoyed "two or three good weeks" and has put most of the most difficult and abrasive issues behind him, including gays in the military and the replacement of William Sessions as FBI director. He has been showing, Gephardt says, that he is willing to "step up to the plate" and take on the tough ones.

But Bill Clinton was a de facto political virgin when he made that first speech on the plan Feb. 17. Today he is approaching a critical turning point carrying heavy political baggage.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.