THE LEARNING CURVE

By GEORGE J. CHURCH

"Tonight I want to talk to you about what government can do because I believe government must do more." --Bill Clinton, State of the Union, 1993

"The era of Big Government is over." --Clinton, State of the Union, 1996

The President has told interviewers that he sees no inconsistency between these two statements. Yeah. Sure. But the conventional view, not only from foes but also from White House aides, is that they typify a split of Clinton's term into distinct--but dissonant--halves. Stage One, an activist, anything-is-possible phase lasted from Inauguration to November 1994. In the public mind it was marked by fumbling, waffling, minor scandals, disastrous appointments and above all the grandiose health-care plan that was to be Clinton's monument but that died ignominiously in congressional committees. The voters spoke, sweeping Democrats out of control of House and Senate and indirectly but unmistakably repudiating Clinton too.

Which, aides now insist, was the best thing that could have happened to the President. It forced him to discipline his naturally roving mind to focus not on dreams of the future but on what is attainable here and now. That, however, was no longer very much. For the past two years Clinton has largely been playing defense--very adroit defense--against Gingrichian zealotry. He cast 15 vetoes in 1995 and 1996, vs. none at all in 1993-94, and held out through two government shutdowns to force congressional Republicans to drop their deepest proposed spending cuts.

Simultaneously, though, Clinton has produced, finally and grudgingly, his own plan to balance the budget by 2002, and after two vetoes he reluctantly signed a Republican welfare-reform bill--to the screams of the left that he is committing the worst betrayal since that of Judas Iscariot. By Executive decree he has been pursuing modest and relatively uncontroversial but worthwhile goals--requiring teenage welfare mothers to live at home, for instance, and intensifying the pursuit of deadbeat dads, who have been forced to pay 40% more money for the support of their children. From Clinton's bully pulpit these days comes an endless succession of moderate-conservative preachments: for school uniforms, teen curfews and more cops on the street; against TV violence; for gay rights but against same-sex marriage. Affirmative action? "Mend it; don't end it."

"It ain't the New Deal," says White House spokesman Mike McCurry, "but it ain't bad." Politically, that is an understatement. Thanks largely to a Republican Congress that misread the public mood as drastically as Clinton did at the start of his term, the once scorned President has generally had a double-digit lead in the polls. He has adopted so many traditional Republican themes that the g.o.p. has nothing much to campaign on except character and taxes. And Bob Dole's tax plan gives Clinton a chance, rare for a Democrat, to run as a fiscal conservative virtuously resisting the seductive appeal of tax cuts that might make the budget deficit skyrocket anew.

Still, the questions nag even at voters reluctantly ready to opt for Clinton on Nov. 5: Who is it that they will be casting their ballots for? The government-must-do-more Democrat elected four years ago? Or the President Bob Dole has taunted as trying "to be a good Republican" in order to win re-election? Or will a second term reveal some yet-unseen Clinton, entering the first four-year period of his adult life in which he does not have to worry about the next election and free at last to do...what?

It is not easy to answer. Dick Morris, Clinton's premier political strategist, says the President has always had both a "left agenda" and a "right agenda," and pushes whichever seems realizable at the moment. A former aide describes a consistent instinct: "If you go to him and say, 'We must do A or B,' he'll say 'Can't we do A and B? Or something else?'"

However, a senior Clinton aide says of the President, "He gets it now. He knows what people want. After the election, he is not going to suddenly veer left and start proposing big Old Democrat solutions. Joycelyn Elders is not coming back, O.K.? No Lani Guinier." Moreover, given a continuing effort to balance the budget and the certainty that Republicans will retain a powerful voice in Congress--possibly still a majority--there will be neither money nor votes for any grandiose schemes.

It cannot have escaped Clinton's attention, either, that his standout successes have come when he hits singles and doubles, and that swinging for the fence makes him strike out. Far and away his biggest achievement has been slashing the deficit while spurring the economy--and realizing that they were two sides of the same coin. He had been elected partly on promises of a middle-class tax cut and a major expansion of "investments" in job training and education. Even before Inauguration, advisers gave him the bad news: the deficit was headed for $360 billion a year or more, which would leave no money for those initiatives or much of anything else.

While headlines were monopolized by the gays-in-the-military uproar and the aborted nominations of Zoe Baird, Kimba Wood and Guinier, Clinton was putting together a tough economic program. It meant scrapping most of his proposed investments and the middle-class tax cut. It meant proposing new taxes, which outraged Republicans, and spending cuts, which troubled some Democrats. It meant braving the warnings of deficit hawks that higher taxes and less spending would lead to stagnation or recession, and following the advice of Republican Alan Greenspan, chairman of the Federal Reserve Board, who insisted that a credible deficit-reduction program would lower interest rates enough to push the economy ahead.

The program passed, barely, and worked. The deficit fell more than Clinton ever dared hope--almost 60%, from $290 billion in fiscal 1992 to an expected $116 billion this fiscal year. Unemployment dropped from 7% at the start of Clinton's term to 5.4% at latest count. The President pledged during the 1992 campaign to create 8 million new jobs; the actual total is more than 10 million. Inflation has stayed under 3% for four straight years, the longest period of stability in three decades.

True enough, Clinton rode an economic bounce that began toward the end of George Bush's presidency, and he had major help from Greenspan's Fed, which independently pursued a monetary policy well calculated to promote steady growth without inflation. Still, though for diametrically opposite reasons, "The economy, stupid" is probably the biggest factor working for Clinton in 1996 as in 1992. "We couldn't be where we are today without the tough decisions he made that first year," says adviser George Stephanopoulos.

Contrast that experience with the failure that once threatened to destroy Clinton's presidency: the health-care bill. There was a case for attempting a complete overhaul of the health-care system but Clinton grossly underestimated public distrust of heavy-handed government intervention. He allowed a task force headed by his wife, Hillary Rodham Clinton, to produce a bill more than 1,000 pages long that even its supporters had trouble understanding. Worse, the Clintons then refused to consider any compromise. In the end, the President could not muster enough votes, Democratic or Republican, to get a bill out of committee. He was left with a public impression of ideological obstinacy and simple incompetence.

Did the President learn from that debacle? Apparently. He has enthusiastically signed the Kennedy-Kassebaum bill to enable workers to carry health insurance from job to job. That is precisely the kind of modest but doable step toward better health-care coverage that Bill and Hillary once spurned in favor of sweeping but unattainable reform.

More important still, consider welfare. Clinton has fulfilled--sort of--his 1992 pledge to "end welfare as we know it." But only by a tortuous route. His first bill was held up to give priority to health care, and then given hardly any push. So it died, and the Republican Congress passed two harsh bills that Clinton vetoed. Finally, he went along with a third bill that fulfilled his ideas of attempting to force welfare recipients to work and placing limits on how long they could stay on the welfare rolls. But the cost of this compromise was a bill that reduces spending, rather than increasing it to pay for job training as Clinton first wanted, and in effect turning the whole program over to the states to administer. The President has weighed the hope of breaking a cycle of dependency against the threat that without a federal guarantee of payments to the poor, children will starve. He has come down on the side of encouraging an enormous and risky experiment in social policy--to the fury of erstwhile liberal supporters, who can see nothing but a crass attempt to buy the votes of well-off citizens by pandering to their meanest instincts.

Clinton deserves the benefit of the doubt on that one, however the experiment turns out. And he has other achievements to his credit, notably an anticrime bill that passed in August 1994. The act is helping to put more cops on the nation's streets--44,000 have been funded so far, supposedly 100,000 by 2000. How much of a role that may have played in a nationwide drop in violent crime is imponderable. But it certainly hasn't hurt: part of the decline seems to result from the aggressive community policing pursued by New York and other cities, and those strategies do require mobilizing more police.

There is another aspect, however, in which Clinton's presidency does not rate well at all. The ability to sense what is politically possible and adapt to it is one measure of a President. Clinton passes that test with the greatest of ease. Another test, though, is to sense the challenges looming in the future and prepare the nation to face them. That test Clinton has so far resoundingly flunked.

The problem of the American future before which all others fade is entitlements--to Social Security, Medicare and Medicaid payments and veterans' benefits. When the baby-boom generation starts to retire in 20-odd years, there will simply not be enough money to pay those entitlements. Taxes will have to zoom, or benefits will have to be slashed, or both.

Neither party has attempted to deal realistically with this menace. Dole's tax cuts might force a future President to demand even bigger increases than would otherwise be needed. The Republican Congress, however, did at least propose to slow the growth of Medicare spending by $270 billion over seven years. Clinton proposed cuts of $124 billion, but effectively demagogued the Republicans for proposing "drastic cuts." That kind of talk can only frighten the elderly into still more determined opposition to Medicare changes--any kind, ever.

Clinton has lately talked of enacting some kind of stopgap legislation to keep Medicare solvent beyond 2001, which now looms as the year of bankruptcy, and then appointing a bipartisan commission to suggest long-term solutions. That sounds distressingly like a cop-out, a way to dump the problem into the lap of Clinton's successor.

The co-chairmen of an earlier bipartisan commission on Social Security did send Clinton a plan for some long-range reforms in that system; he ignored it. Meanwhile, the President has been proposing what would amount to an entitlement to two years of college education, to be financed by a $1,500-a-year tuition tax credit. The cost would be modest--an estimated $8 billion over six years--and the President has offered specific revenue increases and spending cuts to meet it. All the same, talking up a new entitlement is no way to prepare citizens for the painful future steps that will be needed to pay for the entitlements they already have. Perhaps a re-elected Clinton, finally freed from any fear of losing the next election, can summon the courage to start that process. Perhaps, but that is one hope the Man from Hope has not yet done anything to encourage.

--Reported by J.F.O. McAllister and Eric Pooley/Washington

With reporting by J.F.O. MCALLISTER AND ERIC POOLEY/WASHINGTON