CLINTON'S TROOPS TURN AWAY

By Michael Kramer

When a product proves defective, smart manufacturers either recall and fix it or abandon it entirely in favor of something new. When the product in question is a President, the remedy is similar but the course is vastly more complicated. And that's the problem confronting the centrist Democrats largely responsible for electing Bill Clinton in 1992.

The White House is having an anxiety attack at the prospect of a liberal challenge from Jesse Jackson, but a potentially more dangerous threat may come from the Democratic Leadership Council, the group of moderate Democrats formed in 1985. Clinton helped found the organization, chaired it before resigning to run in 1992 and sold himself to the nation on the basis of the ideas developed by the council's think tank, the Progressive Policy Institute (PPI). Clinton had defined the DLC's task as creating "a new middle ground of thinking on which someone can not only run for President but actually be elected."

Having accomplished that goal, Clinton has wandered. "Since his election," says DLC president Al From, "the President's campaign agenda hasn't been his first priority." A repeat of that performance is what many centrist boosters worry about most. Clinton's latest moves to the center, like his recent balanced-budget proposal, are viewed by the DLC as mere electoral tactics that may signify nothing at all about a second term's direction. "In '92 our ideas captured the country but not the party," says William Galston, who resigned recently as a White House aide to help develop what From calls a "third way." Since then, adds Galston, the tension within the Administration "has involved accommodating the liberal tendencies that still dominate the party and the centrist views the President ran on." That confusion is exactly what could doom Clinton, since many Americans still wonder what the President really believes in and what he will fight for.

The centrists don't want to go down with him. Explains Elaine Kamarck, a former PPI fellow currently working for Vice President Gore: "The DLC worries about dying off if the President's defeated. The battle for the party's soul will continue even if he wins. But if he loses, the liberals will claim that the dlc's centrist views were responsible and should be tossed aside entirely. The counterargument will be that just because the messenger proved imperfect, doesn't mean the message itself should be junked."

Fearful that such a distinction would be lost in the blame game following Clinton's forced retirement, those who helped elect him are preparing to distance themselves while they still have the chance. "We're out to push the intellectual envelope," says the ppi's Rob Shapiro, who is working on a "radical" series of issue alternatives that could "unyoke" the centrists from their President. A full-fledged manifesto is due this fall, and if, as currently planned, it includes ideas like privatizing Social Security, it's unlikely that Clinton will have the nerve to sign on. At that point, says Galston, the group's new prescriptions will "be there for anyone to embrace."

Anyone? Even a third-party candidate like, say, Colin Powell, who'd probably be as leery as anyone else about the notion of privatizing Social Security? "Maybe," says Michael Steinhardt, the hedge-fund guru who chairs the Progressive Foundation, which will publish the manifesto. Steinhardt is one of about two dozen wealthy Democrats behind the project, a roster that includes entertainment mogul Barry Diller; investment bankers Steve Rattner, Felix Rohatyn and Barrie Wigmore; and entrepreneurs Mitch Hart, who started Electronic Data Systems with Ross Perot, and Sandy Robertson, who assembled much of the California support so vital to Clinton's '92 drive.

Most of these bankrollers are backing Clinton, says Steinhardt, who identifies himself, Diller and Hart as the three most willing to walk away from Clinton right now. "Precisely because we could be washed out in a Clinton loss, I hope our 'third way' leads to a third party," says Steinhardt. "That's a ticket to irrelevance," Rattner retorts. "We should stick with Clinton as we try to remake the party." "But why support someone who's conned you?" asks Diller.

Al From himself embodies John Maynard Keynes' warning that the real difficulty in changing any enterprise lies not in developing new ideas but in escaping from old ones. "The problem for us and him," says From, "is that Clinton promised to be different. He's been that a bit, but the whole is less than the sum of the parts. The fundamental change he pledged hasn't come. We've been consistent in articulating the ideas he won on, but he hasn't been consistent in advancing them. We were at this before Clinton, and we'll be at it after he's gone, because a long-term majority will never be created around the interests represented by Jesse and the labor unions. Most people are politically homeless now. They're our target. We'll work to get Clinton to pursue us, but we're damn sure going to make it hard for him to catch us."

Which means what? "Al feels a loyalty to Clinton because he feels responsible for electing him," says Steinhardt. "But what we're planning is bigger than some psychological thing. We'll just have to see if Clinton buys our new stuff. If not, and someone else takes it on, then we'll probably fracture." Then Clinton will have even more trouble than he has already. ^1