The White House: Clearing the Decks

By Jack E. White

For weeks, as George Bush's standing in the polls dropped and fears grew that the economy might stagger back into recession, he had been under pressure from both friend and foe to do something to get his presidency back on track.

Bush finally did something last week -- in fact, several things. He replaced unpopular White House chief of staff John Sununu with Transportation Secretary Samuel Skinner, a likable moderate who has emerged as one of the Administration's smoothest troubleshooters. He appointed a trio of pragmatic political strategists -- Commerce Secretary Robert Mosbacher, pollster Robert Teeter and Republican businessman Fred Malek -- to lead his re-election campaign. Yet before the week ended, two of Bush's advisers publicly disagreed about the wisdom of cutting taxes for the middle class, once again underscoring the divisions within the President's inner circle about how much should be done to resuscitate the economy.

All this activity did nothing to dispel the impression that the President, relatively surefooted in foreign affairs, has no clear ideas for solving homegrown problems. Sununu did not help matters by his autocratic, high- profile style, and in recent weeks he found himself embroiled in several public spats that did not inspire confidence in his leadership. At one point Sununu seemed to criticize the President for a remark about high interest rates on credit cards; at another point he accosted a Washington Post reporter at a bill-signing ceremony, shouting, "You're a liar! Everything you write is lies!" Skinner is certain to run a more collegial shop, but unless Bush can make up his mind about what course he should take, the personnel changes will mean little.

By mid-November, after several of Bush's political strategists warned that they would find it difficult to work with Sununu on the 1992 campaign, Bush concluded that his chief of staff had become a serious liability. Yet the President, who values loyalty above all else, could not bring himself to give the bad news personally to his old friend. Instead he delegated the assignment to his oldest son, George W. Bush, who met with Sununu on Nov. 27.

But either because the younger Bush was too deferential in delivering the message or because the chief of staff refused to understand it, Sununu deluded himself into thinking that he could save his job by rallying conservatives behind him. Instead of resigning, he began phoning conservatives on Capitol Hill and elsewhere, imploring them to let the President know they supported him.

Some lawmakers, including Congressmen Newt Gingrich, Henry Hyde and Vin Weber, responded positively to Sununu's appeal. But the chief of staff's many enemies in Washington saw an opportunity to take revenge. Republican leader Robert Dole, who has seethed since Sununu helped Bush win the 1988 New Hampshire primary by suggesting that Dole was a closet advocate of higher taxes, coldly spurned him. Then Dole twisted the knife by describing Sununu's phone call to a television interviewer. Some White House officials and G.O.P. political strategists were miffed that Sununu was trying to end run the President. Bush himself was reported to be "chapped" by what seemed to be an attempt to blackmail him into retaining Sununu.

Last Tuesday Sununu gave in. On a presidential visit to Florida and Mississippi, he delivered his handwritten resignation, stating that as a private citizen he would continue to support Bush "in pit bull mode or pussey ((sic)) cat mode (your choice, as always)." He will remain at the White House as a counsellor to the President until March 1, presumably to help steer the Bush campaign through the New Hampshire primary.

Sununu's downfall was pleasing to many White House staffers who had long chafed under his imperious management. One senior official answered a reporter's call by singing, "Ding dong, the witch is dead." Said a somewhat disgusted David Carney, a White House political aide who has worked for Sununu for 11 years: "Are people gleeful today that John Sununu is leaving? Absolutely. Is he surprised? Not at all. He played hardball, and he got hardball. He knows how politics works, and he wasn't in this to win any popularity contests."

But the rejoicing could be premature. For one thing, right-wing rage at Sununu's ouster could fuel a challenge from conservative commentator Patrick Buchanan, who is expected to announce his candidacy this week. In theory at least, Buchanan and former Ku Klux Klansman David Duke, who proclaimed that he would enter several Southern G.O.P. primaries next spring, could present the same kind of difficulty for Bush and his party that George Wallace did for the Democrats during the late '60s and early '70s and that Jesse Jackson did during the '80s. Duke and Buchanan will seek to portray the President as squishy soft on such issues as taxes, abortion and civil rights. Says veteran Republican political consultant Eddie Mahe: "Having conservatives making endless charges against Bush cannot help. Over time, it leaves a residue of negative information out there that's not helpful." Even so, there is virtually no possibility that either rival could prevent Bush's renomination. In fact, by denying him conservative votes, they might even help Bush by forcing him to steer a course to the middle, where the bulk of the voters who will decide the November election is found.

A more significant threat to Bush's reelection is the economy, which shows few signs of reviving quickly. On Friday the Labor Department reported that in November employers laid off 241,000 workers, the largest drop in jobs since last winter when the economy was mired in recession. Earlier Bush had made a symbolic attempt to show that he is willing to give the economy a jolt by speeding up $9.7 billion worth of federal spending. But most experts believe that is far too small a sum to have much impact on the $5.7 trillion economy.

Several of the President's economic advisers have concluded that more dramatic action is needed. But Bush has deferred outlining his new economic- growth package until the State of the Union address in late January. This "do nothing now" stance is rooted in part in Bush's natural caution, a tendency that Sununu reinforced because of his unwillingness to reopen the budget accord that requires that any new tax cut be offset by equivalent tax hikes or reductions in domestic spending. Sununu feared that tinkering with the pact would lead to compromises on taxes, which would further anger conservatives.

With Sununu out of the way, the balance may shift toward the Administration's "do something big" faction, which includes Vice President Dan Quayle, Council of Economic Advisers chairman Michael Boskin and Housing Secretary Jack Kemp. In an appearance before the House Ways and Means - Committee last week, Boskin and Budget Director Richard Darman suggested that Bush would be willing to break the budget agreement to give the economy a shot in the arm by lowering taxes for the middle class. But when the hearings resumed after a luncheon break, Treasury Secretary Nicholas Brady, leader of the Adminstration's "do as little as possible" faction, differed with his colleagues, claiming that breaking the budget agreement would cause interest rates to soar.

Boskin, backed by Quayle and Kemp, has argued inside the White House that the economy would benefit from a middle-income tax cut in the range of 1% of GNP, or about $57 billion -- a much bigger reduction than the Democrats have proposed. Such a stimulus would not significantly drive up interest rates or inflation, Boskin has argued, so long as caps are kept on future federal spending, as in the 1990 budget accord. Clearly the Administration's internal struggle over economic policy is far from over. The outcome will probably be determined by the positions taken by Bush's new chief of staff and campaign team.

With reporting by Laurence I. Barrett/Washington