WHITE HOUSE WATCH by Richard S. Dunham December 6, 1999

Bush Is Stealing a Play from Clinton's '96 Game Plan
He's trying to stake out a middle ground between extremists in his own party and among the Democrats

Bill Clinton may be the master of the political concept known as "triangulation," but there's a star pupil threatening to outdo the teacher. No, it's not Clinton's handpicked successor, Vice-President Al Gore. The new triangulator is none other than Republican Presidential front-runner George W. Bush.

As the Texas governor fleshes out his campaign strategy, it's becoming clear that the candidate of "compassionate conservatism" is trying to stake out a political middle ground between his party's extreme right wing, which is viewed by most voters as hard-hearted and mean, and liberal Democrats, those who can't get enough of Big Government. Sound familiar? It's only a slight variation of the theme played so successfully by the President in the 1996 election, when Clinton pitted his Democratic colleagues in Congress against the Republican Right. It made him seem more centrist.

The latest example: Bush's long-awaited tax-cut plan, unveiled Dec. 2 in Des Moines. The package, which would cost some $1.3 trillion over 10 years, offers something for almost everybody: elimination of the two top income tax brackets for the rich, lower rates and fatter family-friendly deductions for the middle class, and a 33% cut for low-wage taxpayers. Bush woos small business with his plan to phase out inheritance taxes, throws a bone to social conservatives by endorsing a cut in the marriage penalty, and plays to elderly voters by eliminating the Social Security earnings penalties.

ALL SMILES. Predictably, Bush's plan was attacked from the right for failing to go far enough and from the left for lavishing most of the benefits on the wealthy. So why were Bush advisers all smiles? "What Governor Bush showed was a middle-of-the-road program," crows top economic adviser Lawrence B. Lindsey. "It's too small for the right and too big for the left. He is a pragmatist."

Sound familiar? Former Clinton adviser Dick Morris, the mastermind behind the '96 triangulation strategy, couldn't have said it better. It's positively Clintonesque: A little something for everybody.

The first whiff of Bush's brand of triangulation came three months ago when he aimed a rhetorical salvo at House Republicans for trying to balance the budget "on the backs of the poor." He continued down the path in September by unveiling an education agenda that increased the role of the federal Education Dept. but returned more power to -- and demanded more accountability from -- local schools. The innovative plan drew howls from far left and far right alike. Future triangulation targets: immigration limits (Bush will come out for lifting some) and using abortion as a litmus tests for Presidential appointments (Bush, a pro-lifer, will say the issue gets too much attention).

"CLINTON LITE." But taxes are tricky for triangulation schemes within the GOP, and Bush will have to be careful. A sizable bloc of antitax zealots in his party want tax cuts far bigger than Bush's $1.3 trillion offering. Many, like Presidential rival Steve Forbes, want to abolish the IRS altogether and institute a flat-rate income tax.

By playing to the political center, Bush risks stirring up the hard right like a hornet's nest. "It's sort of Clinton Lite," protests Jack Wynn, CEO of a financial information company and Forbes' national small-business liaison. "What Bush is calling for is so marginal. Small businesses believe that the way to go is scrap the system we have now."

To please as many Republicans as possible, Bush sided with advisers who wanted a larger tax package. "It's important in the primaries," says Heritage Foundation senior fellow Dan Mitchell. Republican base voters "view it as symbolic as to whether you are on their side."

Even if Bush survives the intraparty hazing, he faces a far tougher challenge in the general election. He must defend the plan against Democratic attacks that it is skewed to the rich because it eliminates the top two tax rates. Even more serious: the charge that a huge tax cut would devastate Social Security, Medicare, and domestic programs. "It's retroeconomics," cries Chris Lehane, chief spokesman for Vice-President Gore. "It would blow up the balanced budget and imperil the strength of the economy."

"CREDIBILITY PROBLEM." Fact is, voters have grown suspicious of Republican tax-cut promises, having seen little tax relief in the past decade despite bold promises by former President George Bush and Newt Gingrich's revolutionaries. "There's such a credibility problem for the GOP," says Heritage's Mitchell. "People think they only say tax cuts around election time and never follow through."

But Team Bush is willing to fight that fight another day. In its view, any discussion of big tax cuts is a political plus for a Republican who favors them (against a Democrat who doesn't). "It's a very good general election issue for us against Al Gore," says Bush backer Tom Rath, a former New Hampshire Attorney General.

Democrats strongly disagree. They think Bush's brand of triangulation veers so far to the right that it defies the laws of political geometry. With both sides itching to test out the theory, we'll get to see in a year if triangulation becomes a bipartisan tool -- or a remnant of the past.

Dunham, White House correspondent for Business Week, offer his views on Mondays for BW Online

EDITED BY DOUGLAS HARBRECHT _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

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