TURNING BACK THE CLOCK

By JEFFREY H. BIRNBAUM WASHINGTON

FEW PEOPLE WOULD CONFUSE FRANK Washington with someone who needs a federal handout. He is a graduate of Yale Law School, a former assistant to the chairman of the Federal Communications Commission and a multimillionaire. When his interests faced a challenge in the nation's capital recently, he alerted his high-powered law firm, Skadden Arps; hired one of the town's best-connected lobbyists, Rob Leonard; and got several of his well-connected friends to telephone a senior member of the House Ways and Means Committee, Robert Matsui. One of the callers was Matsui's campaign treasurer, a man the Congressman rarely ignores.

Yet thanks to affirmative action, a set of programs designed to help the disadvantaged, Frank Washington stands to benefit from a subsidy worth at least $400 million. Simply because he is black, Washington and his partners were able to make a special tax deferral part of their $2.3 billion acquisition of Viacom Inc.'s cable systems. Under the provision, a company that sells a cable system to a partnership controlled by a minority can qualify to defer its capital gains on the sale indefinitely. The law was designed to encourage minority ownership of broadcast properties, a fact Washington knows better than most. He wrote the original policy at the FCC in the late 1970s and since then has secured the tax break for five similar transactions. Those deals have made him rich, and the new deal will make him much richer. He may more than double his $2 million investment in just three or four years--if the deal goes through.

But the deal may not go through, and with its demise the three-decade-old edifice of affirmative action may begin to crumble. Over Frank Washington's protests of unfair treatment, the House voted to repeal the FCC tax provision, and the Senate Finance Committee is poised this week to limit it. But that's just the start. The Republicans do not debate whether affirmative action will be dismantled, only how quickly. And many Democrats accept the inevitable. President Clinton is reviewing all 160 affirmative-action programs, and he is expected to conclude that at least some of them must go. The result is a sea change in the way the government-and the whole of American society-approaches the volatile issue of discrimination by race and gender. William Kristol, a leading Republican strategist, concludes, "It is now permissible to question policies that were the quintessence of political correctness merely six months ago."

At the same time, affirmative action will not go down without a fight. Few affirmative-action programs are as egregious as the Viacom deal, and organizations that represent blacks, Hispanics and women are gearing up to lobby together to save as many programs as they can. "We all have to be very careful of what both the White House and the Republicans are doing," warns Democratic Representative John Lewis, a hero of the civil-rights movement. "We are playing with something that can lead to a further polarization of people."

Affirmative action is already a hot topic on the presidential campaign trail, and it is sure to get even hotter. The trend in the G.O.P. field is running decidedly against the programs. Senator Phil Gramm and commentator Pat Buchanan call for their abolition. Lamar Alexander opposes preferences based "solely" on race. And Senate majority leader Bob Dole has commissioned congressional hearings with an eye toward major restructuring. Only Republican Senator Arlen Specter largely defends the status quo. On the Democratic side, President Clinton has ignited what amounts to a holy war within his party. Last week moderates like Senator Joe Lieberman of Connecticut put Clinton on notice that they want reforms as a way to win back the white male voters that Democrats need to have any chance of regaining majority status. But that would threaten the party's support among minorities and women and, worse, probably spark a challenge to the President in next year's election from Jesse Jackson, who talked cordially to Clinton about affirmative action last week but is still making the programs' protection his litmus test.

The predicament amounts to a no-win situation for Clinton, a fact he addressed candidly during a private meeting with House Democrats in late February. Republicans, he charged, "are playing the same old game, the one they've always played." When economic times get tough for the middle class, he said, Republicans "create wedge issues and try to get people to turn on each other." His tough task now, Clinton conceded, was to "outsmart them" by seeing "what works and what doesn't work and then talk about it." Some liberal Democratic House staff members hope the President's study will become the "Godot review"-pending but never delivered. But White House aides are telling lobbyists that changes will be recommended, including limiting the size of government subsidies, paring programs that set aside government contracts for minorities and adding the criterion of economic need to benefits now dispensed on race or gender.

Critics caricature affirmative-action goals as quotas largely for blacks and women that deprive white males of jobs. The latest statistics, however, do not bear that out. A report obtained by TIME from the Joint Center for Political and Economic Studies in Washington shows that affirmative-action programs have had "some positive effects" in opening new opportunities for blacks, but that the measurable benefits in terms of wages and employment have been "quite small." The report concludes, "While affirmative action can be an effective policy tool, its impact is related to the vigor with which it's enforced." Its efficacy has been especially slow in high-paying jobs. Bureau of Labor Statistics figures show that in 1994 whites held 88.8% of managerial and professional positions, down only slightly from 91.6% in 1983. In the same period, blacks increased their presence in the managerial and professional ranks only marginally, from 5.6% to 7.1%.

Still, the public overwhelmingly wants to get rid of affirmative action. The latest Los Angeles Times poll shows the number who believe affirmative-action programs "go too far" is up to 39%, from 24% in 1991. Even some liberals and a handful of black intellectuals doubt the value of preferences based only on race and gender. The President's pollster, Stan Greenberg, told TIME, "In the long term, affirmative action needs to be based on need."

No matter what happens with affirmative action, the political necessity of helping minorities and women will remain strong in many places. San Antonio, Texas, for example, appears to have kept its Kelly Air Force Base open by playing what might be called its "affirmative-action card." City boosters had argued that Kelly should not be closed because 61% of its employees, or 6,500 people, are Hispanic and represent nearly half of all the Hispanics employed by the Air Force. Similarly, corporations are expected to continue to give special assistance to women and minorities no matter what the government does. Having a diverse work force is good public relations.

But coming on top of G.O.P. efforts to balance the federal budget by cutting programs for the poor, the latest broadsides against affirmative action are being viewed as insidious-and potentially dangerous-by the minority community. "The Republicans are playing with fire," asserts Elijah Anderson, a sociology professor at the University of Pennsylvania. "Affirmative action is a code word, and it's very divisive socially. Politicians aren't serving us well when they play the race card."

--With reporting by Ann Blackman and John F. Dickerson/Washington

With reporting by ANN BLACKMAN AND JOHN F. DICKERSON/WASHINGTON