The Big Change

IN poker it's "I see you and I'll raise you." In budget-balancing political poker, we've just seen "I see you and I'll lower you."

President Clinton's remarkably brief but dramatic response to months of GOP balanced-budget action was:

* A bargaining bid to lower (read stretch out) the impact of a now virtually inevitable budget-cutting era.

* Broad, opinion-poll pleasing, less pleasing to most leaders of his own party.

* A renewed concession to last fall's election reality.

* A tacit admission that the leader of the party that has lived by Keynesian economics should have to recognize one of its chief tenets. Namely, that in times of economic prosperity and growth a nation should run surpluses so it can go into deficit to stimulate the economy during recessions.

The Democrats criticized the Reagan era for adding to debt during a prosperous era. They are now being out-Keynesed by Newt Gingrich.

The bottom line is: Mr. Clinton's strategy is likely to lead to a compromise on most specific appropriations when they come. But it will be a compromise closer to the Republican figures than his own.

Specious arguments and vague crowd-pleasing generalities have issued from both sides of the Capitol aisles and both ends of Pennsylvania Avenue. Mr. Clinton's five-minute Cliff Notes version of his plan to reach balance by the year 2005 was no exception. Saying that "it took decades to run up this deficit" isn't a logical argument for taking a decade rather than seven years to reach zero deficits. All four sides (young Turk Republicans in a rush, slower old bull Republicans, a compromising president, and uncompromising Democratic leaders) are going to need to be more specific about how they want to "preserve education"..."not weaken national security"... "save Medicare"... and define who is included in the "middle class" for tax-cut purposes.

The first two groups - the two Republican wings - have been edging toward their big strategic compromise all spring. They will finish that process in the House-Senate conference committee due to report out in a week or two. That will provide a road map for balancing by 2002 (and perhaps cutting income taxes along the way). Then we come to appropriating the money for the first fiscal year. At that point we switch from the Clinton of the five-minute speech to the Little Rock economic summit Clinton fascinated by every budget detail. The policy wonk will have his veto in hand. Which will mean compromises - but compromises where the Gingrich crusaders have designed the field of play.

Let's briefly examine a few of the major items on that field.

First, Medicare. It should be obvious by now to Medicare recipients, hospital administrators, doctors, and the Congress that the growth of federal health care spending cannot be sustained at recent rates. Ergo: Cutting of that growth rate is going to happen. The reaction of the market place is already under way in the push of HMOs to enroll Medicare recipients in lower-cost care. Any such change will cause individual hardships. But a compromise appropriation somewhere between the Republican's $256-billion-to-$288 billion cuts and Mr. Clinton's $124 billion proposed cut is assured - and necessary.

Second, defense. Here we'd side with the administration, specifically such hard-headed technocrats as Defense Secretary William Perry and his aides. If Defense says it doesn't need more hyper-expensive stealth bombers just now, let's not spend money to help some congressional districts. Ditto base closings.

Third, tax cuts. The caution of the Senate Republican old guard strikes the right note. It makes sense to concentrate on budget-balancing first, then, several years out, look at tax cuts if the balancing is on course - and the economy at the time allows. On the semantics of "middle class" cuts we'd opt for a broad, inclusive interpretation, simply because cost of living and salary rates are so different in different regions of the country.

President Clinton was elected on a platform of "change." The Republican "revolution" of last fall claims the mantle of "historic change." Mr. Clinton's speech Tuesday night was a tacit concession that his version of change was going to have to veer in the direction of the Gingrich version. The resulting national change of course over several years will mean readjustments for many citizens - some of them anguishing. But the result should be measured in terms of fairness to future generations of Americans. It will also be a measure of the maturity and realism of voters buffeted by media blitzes and siren songs from both sides.

Zealots from both parties have tried some semantic scare tactics of the public. And polls show, as always, considerable public reluctance to make specific sacrifices while paying lip service to the overall idea of sacrifice for the common good. But if American history tells us anything it is that Lincoln was right about people being fooled some of the time but not all of the time.

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