GOP Splits Over How Much To Ease Regulatory 'Burden'

AN Illinois general contractor is forced to abandon a job site because it's a potential breeding spot for Indiana cave bats. A Massachusetts nursing home is told it cannot expand because it abuts a wetland. A Pennsylvania construction company learns that every worker on a highrise must be attached to the structure with a $400 tether.

For the past year, during their effort to prune back government regulations, congressional Republicans have pointed to stories like these: examples of how federal mandates often prevent small businesses from thriving.

But twice now, Republicans have seen their regulatory-reform bills blocked, once last year by Senate Democrats and again this week by their own House leadership. After pro-environment moderates in his own party threatened to fight this week's bill, House Speaker Newt Gingrich pulled it from the floor.

The decision represents a clear concession to environmental concerns and is the best evidence yet that Republican leaders are determined to appear more reasonable and pragmatic in this election year - even if it means tempering their Contract With America.

''Until we win the White House,'' says Ohio Rep. John Boehner (R), ''there's no sense in pounding our heads into a wall.'' Mr. Boehner spoke Tuesday, just hours after Mr. Gingrich postponed regulatory reform until a compromise bill can be brokered.

This week's bill was a mellower version of a sweeping overhaul passed one year ago that included, among other things, a moratorium on all new regulations and a requirement that federal agencies perform risk-assessment and cost-benefit analyses before enacting new rules. The bill later died in the Senate.

The latest version did not contain these provisions. Instead, it included two relatively modest proposals: to allow small businesses to challenge decisions by federal agencies in court, and to allow Congress more power to review and revoke new agency rules. The bill reflected the new Republican strategy of trying to enact ''down payments'' on promises made in the Contract With America.

But one provision ultimately sank the bill. It was a regulatory ''sunsetting'' measure to require federal agencies to periodically review every ''major regulation.''

According to Carol Browner, administrator of the Environmental Protection Agency, such a mechanism would tie the EPA in knots, soaking up as much as $1 billion a year of the organization's budget and making it harder to enforce regulatory mandates like the clean-water, clean-air, and endangered-species acts.

Other cabinet members argued that the bill would hamper enforcement of everything from worker-safety rules to meat and poultry inspections and hazardous-waste transportation standards. President Clinton had promised a veto.

The bill's supporters, mostly small-business owners who have given generously to Republican campaign coffers, argued that regulations are often imposed without consideration of their effects on business. Costs and paperwork associated with rules on hard-hat use, water quality, and even dish-washing liquid, they say, drive some businesses under.

Congressional sources say that Republican leaders now believe they underestimated the broad public appeal of environmental safeguards and came across last year as greedy extremists. In a memo to House Republicans, conservative pollster Frank Luntz argued that Republicans ''have articulated environmental issues so badly for so long that virtually no one trusts us.''

New York Rep. Sherwood Boehlert, the Republican credited with swaying the Speaker against Tuesday's bill, explains that the sunsetting measure would have cost taxpayers more by increasing agency workloads.

''I'm not saying there aren't a lot of stupid regulations out there,'' Mr. Boehlert says. ''But this bill is like throwing out a whole bushel of apples just because one goes bad.''

Instead of bringing the bill up now, initiating a brawl between conservative and moderate Republicans and forcing members to make a controversial vote, Boehlert says Gingrich granted him and a group of colleagues time to craft a ''filtering system'' that could catch frivolous regulations without disturbing beneficial ones. A revised bill may be considered after the April recess.

But the Speaker's decision does not please everybody. ''Make no mistake, this bill was very modest,'' House majority whip Tom DeLay (R) of Texas said in a statement. Mr. DeLay, a former small-businessman himself, placed blame for pulling the bill on Clinton who, he says, ''supports regulatory relief in his public statements to small-business groups while threatening to veto it when it actually comes to the floor.''