The Political Interest

By Michael Kramer

Until now, it's been all Newt. He lectures; he threatens; he denies; he clarifies. Every word, every musing, every hyperbolic expression is recorded and decoded. Newt Gingrich, the incoming House speaker, has dominated the debate as few politicians ever do. Even Bill Clinton, still conflicted about What It All Means a month after the Republicans' midterm rout, seems almost mute before Newt.

It's not just that Newt is new; it's that he has ideas, 10 simple and simplistic solutions embodied in his "Contract with America." Not all of Newt's poll-driven notions are nonsense, of course, but transparency is their common denominator. They seek to gratify the public's desires and quiet its fears. Conveniently forgotten is the real world's complexity and an appreciation for the long-term consequences of their feel-good prescriptions. Consider, for example, the contract's implicit welfare paradigm: We're against children having children, so unwed teen mothers will be denied welfare and their kids can live in orphanages -- a costlier remedy than the current (and admittedly flawed) system.

Newt's free ride in the world of big think ends this week. The Democratic Leadership Council (DLC) is issuing its "Progressive Alternative," a more honest and rigorous attempt to address the nation's problems than Gingrich's vacuous bromides.

At the alternative's core are three schemes related to the economy:

Health Care. The alternative joins the call for insurance reform, which means eliminating the onerous "pre-existing condition" clauses insurance companies use to deny coverage. It also targets Medicare and Medicaid as the last great preserves of fee-for-service medicine. Price controls are rejected because they spawn cost shifting. The alternative would use a voucher system to move future beneficiaries into HMOs. Those seeking greater care would have to pay for it out of their own pockets.

Jobs. Building on the catchy Clintonism "What you earn depends on what you learn," the alternative proposes individual development accounts, tax- sheltered savings workers could draw upon to pay for skill-enhancing education and training. It would also create a market-based "G.I. Bill for working Americans." The $1.5 billion already allocated to train dislocated workers would fund "job-opportunity vouchers." Customers would shop for the programs best suited to their needs, a vast improvement over the existing, government-controlled system. A 1993 Labor Department study found that those seeking the government's help are "given inaccurate information about prospects for employment and provided with little guidance that can help them find a job."

Cutting the Deficit. Gingrich's contract, irresponsibly silent on health reform and silent as well on worker retraining, is especially disingenuous in its call for a balanced-budget amendment to the Constitution, a gimmick that would allow politicians to further postpone the hard choices everyone knows are required. By contrast, the alternative boldly slams both parties for recklessly putting the major entitlements -- such as Social Security -- off limits to fiscal reform, thus ignoring the long-term deficit. Rob Shapiro, the former Clinton adviser responsible for the alternative's toughest ideas, would raise the retirement age and means-test federal benefit programs by denying full cost-of-living increases to affluent seniors. Retirees would also have to pay taxes on the insurance value of their Medicare coverage.

In the short term, the alternative promotes a "cut-and-invest" strategy. Clinton, says Shapiro, "should ruthlessly cut those tax and spending programs that merely subsidize powerful interests and shift those resources to new forms of public investment, deficit reduction and family tax relief." Shapiro has identified 68 such preferences that could save $225 billion over five years, programs like the $11.2 billion in yearly payments to farmers whose commodities sell below set prices.

In Gingrich the contract has a powerful sponsor. The DLC, which Clinton once chaired, hopes he'll adopt the alternative, but few would bet the rent. Clinton embraced the DLC's "New Democrat" nostrums to win middle-class votes in 1992. Since then he has largely abandoned the council's centrist ideas. Few expect him to summon the courage to tackle entitlements seriously. Nevertheless, Budget Director Alice Rivlin and Labor Secretary Robert Reich have endorsed the cut-and-invest program. Other Administration heavyweights, however, including Treasury Secretary Lloyd Bentsen (who as a Senator championed energy-industry windfalls), have backpedaled from cut and invest with the dexterity of N.F.L. cornerbacks. The President has himself called it an "attractive idea," but if the past two years are any guide, he'll probably punt.

Clinton will probably favor a minimalist approach instead. Peripheral issues like campaign reform will top his agenda, and he'll move to co-opt conservatives, as he tried last week when he proposed an extra $25 billion in military spending. None of that will do, says DLC executive director Al From. Clinton, he says, must "govern more grandly and dance again with those who brung him. Compromising between the centrist views he won on and the liberalism of special interests won't cut it." Maybe not, but at least the war of ideas has begun.