11/18/96 TABLE: What May Fly, What Won't

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What May Fly, What Won't

The parties agree on balancing the budget and probably can compromise on pension portability--but that leaves plenty of issues to fight over during the next two years
BALANCING THE BUDGET: The President and many Hill Republicans desperately want to get the issue behind them. Look for them to cut a deal in the first six months--overriding the objections of hard-core House GOP conservatives.
CRIME: Both parties will spend more on anti-drug programs, but the real battle will be over antiterrorism initiatives. Libertarian Republicans and left-wing Democrats blocked key provisions this year. The new Congress is likely to accept a plan to track explosives.
EDUCATION AND TRAINING: Clinton and Hill Republicans were close to a deal this year to replace federal job training with vouchers for private programs. That is likely to become law, but Clinton won't get his coveted tax breaks for college tuition.
ENTITLEMENT REFORM: A bipartisan panel to make long-term Medicare reforms is just about a sure bet. Both parties will want to resolve the problems without being blamed for the pain they will cause future retirees.
THE ENVIRONMENT: Big environmental laws will be up for consideration, including Superfund. A business-backed compromise was torpedoed by Republican firebrands in the last Congress. Under the influence of moderates, the GOP will sign off this time.
REINVENTING GOVERNMENT III: Al Gore will continue his push to reduce the federal workforce and make it easier for business to deal with government. Congressional Republicans will say it is not enough but will happily go along.
TAXES: A big tax cut is out, but Clinton will put forward a package of middle-class capital-gains tax cuts. Hill Republicans will counter with a broader capital-gains cut and may push for broad tax restructuring. The likely deal: Clinton will get his middle-class reduction and take deeper cuts in capital-gains levies.
HEALTH CARE: Clinton vows to expand health-care coverage for children and the unemployed. The Republican Congress will resist kid care but may expand limits on benefits for the unemployed.
WELFARE REFORM: Clinton will push hard for more training and child care, while restoring the social safety net for legal immigrants. Republicans will resist spending any more money on the program. Clinton will only get crumbs.
PENSION REFORM: Clinton will want to let workers carry pensions from one job to another and prevent companies from raiding retirement funds--both priorities of labor. Though worried about increased regulation, Republicans will go along with watered-down pension portability.
REGULATION: A mixed bag here. Clinton will impose some tough new rules on tobacco, but continue efforts to ease the regulatory burden on health and safety issues. No big new antitrust initiatives are likely.
TRADE: Clinton will attempt to expand NAFTA to Chile and bring China into the world trading system. He will run into fierce resistance from protectionists in both parties, but with the help of the GOP leadership, the President is likely to prevail.

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