WHITE HOUSE WATCH By Richard S. Dunham

HOW ERSKINE BOWLES TAMED THE PARTISANS OF WASHINGTON

Senate Minority Leader Tom Daschle (D-S.D.) and House Speaker Newt Gingrich (R-Ga.) don't agree on much. But when it comes to outgoing White House Chief of Staff Erskine Bowles, they are of one mind. "He's honest and smart and, most of all, he's balanced," says Daschle. "He's more entrepreneur than bureaucrat," allows a close Gingrich adviser. "He thinks outside the box."

During his two years on the job, Bowles was a unique White House figure -- a Clintonite who was liked and trusted by Democrats and Republicans alike on Capitol Hill (see BW, Nov. 9, 1998, "Mr. Bowles Leaves Washington"). The 53-year-old ex-investment banker from Charlotte, N.C., maintained cordial relations with congressional Republicans, even amid the din of impeachment demands. Daschle, for one, credits Bowles with "almost single-handedly" crafting a budget compromise in October that averted a government shutdown and provided billions of dollars for education projects.

Now, with Bowles' Oct. 30 exit, the policy debate in Washington is likely to become more caustic. His successor, John D. Podesta, is far more partisan, hailing from the party's liberal wing. While Podesta gets good early marks from Hill Republicans, both sides admit that Bowles' bridge-building ability will be missed in 1999 when Congress and the White House tussle over controversial topics including Social Security reform, big-time tax cuts, and impeachment.

Not many Washington pundits would have predicted such a legacy when Bowles took over the staff chief's job in January, 1997. Beltway experts declared then that the longtime businessman lacked the political expertise to deal with Capitol Hill. They noted that the man he replaced, Leon Panetta, was a former House Budget Committee chairman who had survived decades of Hill combat. Bowles had scant experience from his year directing the Small Business Administration and a year as a Panetta deputy. But Bowles worked hard -- and successfully -- to build a sense of trust that was previously lacking in White House relations with congressional Republicans.

"People made a major miscalculation in comparing him to Leon, [who was considered] the insider who knew people on the Hill," says National Economic Council Director Gene Sperling. "Isn't it ironic that that's what [Bowles] will be most missed for -- and most remembered for?"

The secret to Bowles' success? He kept his word and wasn't afraid to face political reality. "What he says is not always what you want to hear," says Daschle.

But Democratic and Republican lawmakers alike seemed to forgive Bowles for his excessive candor in a city not known for candor at all. "Erskine is a straight shooter, and whether he was firing at them or with them, he was able to show leaders on both sides of the aisle that they could trust him," notes Sperling. "He has a way of dealing with people to earn their trust."

Bowles had a few blemishes on his record. He botched the strategy to win fast-track trade-negotiating authority for the President. And he was hauled before Kenneth W. Starr's grand juries to explain his role in attempting to find jobs for Webster Hubbell and Monica Lewinsky. But he managed to successfully keep the White House policy apparatus working through two years of scandal -- producing an historic balanced-budget deal and peace agreements in Ireland and the Middle East. And he leaves Washington with his reputation intact. Indeed, enhanced.

All in all, quite a record for a refugee from the private sector who prefers closed-door negotiations to public relations. "I'm not a great public speaker," Bowles told Business Week, "[I] don't enjoy going on the TV shows and talking to the press, and am not comfortable in the limelight." Still, partisans from Daschle to Gingrich agree, he'll be a tough act to follow.

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

EDITED BY DOUGLAS HARBRECHT