On The Way Down?

By L.I. BARRETT WASHINGTON

From George Bush's first months in office until this summer,it seemed that only divine intervention could shorten his eight-year lease on power. The Soviet bloc's dramatic implosion complemented the President's experience in foreign affairs. He managed to finesse most challenges at home. But the domestic agenda could not be deflected forever, and now he faces a series of divisive concerns, including a new civil rights bill, tax increases and growing fear of recession. The selection of David Souter, while tactically adroit, underscored Bush's need to move cautiously across a domestic playing field that suddenly looks less dismal to Democrats eyeing 1992. The shift results mainly from the government's failure to contain the mounting deficit (estimated at $169 billion for fiscal 1991), which forced Bush to flee never-never land on the tax issue. That, along with the soaring costs of the S&L scandal and other problems, is beginning to eat into Bush's standing in the polls and will echo over the next two years. Says Ed Rollins, a Republican strategist: "Whether we or the Democrats like it or not, politics has moved into the '92 presidential cycle."

The Democrats are looking forward to that race more than they thought they would just weeks ago. Says Al From, executive director of the Democratic Leadership Council: "The Bush presidency has finally begun. Rather than continue to act as a caretaker, he has to make real decisions that carry a political price." If, for example, he vetoes the pending civil rights bill, Bush will offend the middle-class blacks he has been courting. But if he signs it, he will anger businessmen, who fear that the bill will encourage many costly damage suits.

So far, the cracks in Bush's armor are only of the hairline variety. A TIME/ CNN poll, conducted last week by Yankelovich Clancy Shulman, gave him a robust job-approval rate of 61%. But that is down 9 points since April. More troubling for the White House is a dive in confidence in Bush's ability to maintain prosperity. In February's survey, 60% of Americans described the economy as very good or fairly good. That figure dipped to 49% last week. In the earlier poll, respondents liked Bush's handling of the economy, 55% to 36%. The new figures show a sharp reversal: 51% disapprove vs. 41% who approve. Charles Black, the Republican National Committee's chief spokesman, insists that as voters learn more about the S&L debacle, they will buy the G.O.P. argument that it was "the Democratic congressional leadership that was in bed with the S&L operators." More important, Black contends, the President will earn new respect for his efforts to negotiate a deficit-reduction compromise with Congress. Yet by a stark majority (60% to 34%), Americans think Bush was wrong to abandon his "no new taxes" pledge.

Republicans are not reaching for the panic button because they believe Bush will escape grievous harm unless fears about the economy become reality. Another reason for their calm is that no Democrats are yet rising as serious challengers for 1992. Nate Landow, Democratic Party chairman in Maryland, concedes, "We're certainly more optimistic now, and there are new opportunities. But I'm not sure we know how to exploit them."

Still, a potentially promising theme is emerging: populist-flavored opposition to any tax increase that falls on the middle class or the poor. Bush's goal of reducing the capital-gains levy is another inviting target. The Democratic Leadership Council has concocted a "tax fairness index" showing that the wealthy have benefited most from tax changes of the '80s. Last week Mario Cuomo visited Washington to marshal opposition to a Republican attempt to raise federal revenue by limiting the deductibility of state and local income taxes. Raise rates on those making $200,000 and more, Cuomo demanded. "Don't come to us, and take it out of the pockets of children."

Whatever the message, Democrats still lack messengers of national heft ready to take on Bush frontally. Until now, he looked too strong to make an early effort worthwhile, and several possible candidates, including Cuomo, are running for re-election this fall. Cuomo argues, "It's still too early to concentrate on individuals. Ideas, positions, programs are most important." Yet Cuomo reports that the Democrats' new hopes have prompted a couple of prospects, whom he won't name, to sound him out for possible support. "They are starting to let the word out," he says.

Some party pros think a small nominating field would be ideal for Cuomo, with his national recognition and capacity to raise money. Says pollster Harrison Hickman: "He could be the Democratic pope, arguing points of fundamental theology directly with Bush." Whichever Democrats decide to go for it after November, their efforts will seem less suicidal than conventional wisdom had it for 18 months.