HE'S BACK (PART TWO)

By JEFFREY H. BIRNBAUM

The suitors began paying court months ago. When H. Ross Perot stopped by Hilton Head, South Carolina, last year, his "phone pal" Lamar Alexander, the former Governor of Tennessee who would soon become a Republican candidate for President, personally rushed out to the airport to meet him and drive him to the waterside home where the Governor was vacationing. There, over iced tea in a living room overlooking Calibogue Sound, Alexander, in his khakis, and Perot, in his business suit, indulged in some plain talk. "Ross," Alexander said, "if you do what you did last time, we'll get Clinton again." And what did Perot say he'd do? "I couldn't tell," Alexander says of the Texan, who has been similarly pitched by other Republicans. The Governor readily admits his motives. "What I'm going to try to do is give the people who voted for him something to be for. If I do, then he won't have any reason to run." And Alexander might be right. With more than a bit of coyness, Perot says, "There are ways to get me to go away."

The Republicans cannot imagine anything better than Perot going away. Bill Clinton cannot imagine anything worse. Perot--and, more precisely, the millions of disaffected voters who support him and distrust the established parties--holds the key to the next election. Whichever way he--and they--goes will determine who wins the White House in 1996. The proof of this will come later this week when the entire G.O.P. presidential field (from Bob Dole to Illinois businessman Maurice Taylor), the Democratic leaders of the House and the Senate, a bipartisan mishmash of Washington politicians, even Jesse Jackson, converge in Dallas for an unprecedented three-day pander-ama. Each, in his way, hopes Perot will be all ears.

The occasion is "Preparing Our Country for the 21st Century," a convention of up to 8,000 members of Perot's United We Stand America organization, the only thing close to a national party to emerge from the antiestablishment rebellion he sparked in 1992. Although he will be on Larry King Live again this week and has a penchant for hogging the limelight, Perot insists his sole duty in Dallas is to act as host to the visiting luminaries, all of whom he will introduce before they appear at the podium. Furthermore, he no longer appears hell-bent on running for President, and is not going to form an actual third party.

The Republicans are heartened by this subdued Perot. Many see it as an indication that he simply wants to be a player, not the player in the coming presidential race. Perot seems to be encouraging this line. Rhetorically he asks, "Did you ever hear of anyone who has a [personal] political agenda renting a big arena, attracting a crowd from all over the country and letting what could be his opponents speak?" And replies: "No! Surely that makes the point."

Republicans can also take heart from this statistic: those who voted for Perot in 1992 constituted 13% of all who cast ballots for congressional candidates in 1994, when they went for G.O.P. House candidates by a two-to-one margin. Nevertheless, Republicans are taking no chances. A Perot candidacy would be likely to splinter their vote enough to elect Clinton, much as it did in 1992. So the G.O.P. hopefuls are more than willing to risk the appearance of sycophancy for the opportunity to impress Perot right out of the race. "We're being used as props," grumbles Charles Black, top strategist for Senator Phil Gramm of Texas. Still, Gramm will attend without hesitation. Indeed, he and front runner Dole see the Perot courtship as more than a three-day exercise. Together with Alexander, Gramm and Dole proudly count themselves as cellphone mates of the erratic billionaire. And according to Gramm, there is ample reason for constant communication: "If we don't have a credible candidate with a credible program, I think he's back, [and] a three-way race with Bill Clinton is a harder race to win."

Not surprisingly, then, the President will be conspicuously absent from the Perot-a-thon. Why should he try to placate the man? Clinton's best chance for re-election is for Perot to stay mad enough at him and his policies to run. And the President has done plenty to make Perot angry. For a long time, he abjured an idea dear to Perot: campaign-finance and lobbying reform. Clinton also backed the GATT and NAFTA trade agreements, which Perot despised.

While showing some calculated disrespect for Perot might be good for Clinton's ambitions, it probably is not so healthy for his party. The decidedly middle-class Perotistas are precisely the kind of voters Democrats have been losing in recent years. Says Democratic consultant Peter Feld: "This group, which was once thought of as a key Democratic constituency, is not a reliable group for the Democrats anymore. It's up for grabs."

Some Clinton advisers believe the President would be well served to reach out for these voters. In a startlingly candid memo to the President, first disclosed by CNN and obtained by TIME, Democratic pollster Stan Greenberg argues the President "is fundamentally mispositioned for 1996" because "downscale voters"--primarily lower-middle-income workers without college degrees--think Clinton has failed to improve their declining economic fortunes. Greenberg warns that unless Clinton wins over more of these people, many of whom are Perot backers, the President "cannot break above 50% of the vote." He concludes, "The Clinton vote is lagging largely in working-class segments of the electorate: white working-class women ... union members [and] working-class men."

The Democrats are not well positioned to bring Perot followers into their camp. They have hardly begun to recover from last November's drubbing, and in many ways are still spiraling downward amid internal strife and organizational turmoil. Worse, the party has yet to articulate a coherent message. At a New York City luncheon of the party's top contributors earlier this year, Democratic Party chairman Christopher Dodd was asked pointedly, "What does the Democratic Party stand for?" Dodd's hemming and hawing did not satisfy the crowd. "It soon became apparent that he didn't have the answer," recalls Gary Hindes, a bond broker and chairman of the Democratic Party of Delaware.

A study done for Democrats this spring reveals that voters are able to identify Republicans as the party of the privileged, but are unable to say who the Democrats represent. So dire is the Democrats' identity crisis that Clinton's Cabinet has begun to rebel, sometimes accusing the President of lacking leadership. "There's a real crisis here," says a Cabinet officer and longtime Clinton ally. "It's a crisis of confidence about what the Democrats stand for and what is their guiding principle. The Democrats have lost confidence in themselves."

However, in their fight to win the Perot vote, the Democrats might have a secret weapon: the Republicans. The congressional G.O.P.'s drive to reduce environmental, health and safety regulations, and their intention to cut Medicare deeper than the Democrats, has cost the Republicans popularity points. Surveys now show voters as likely to cast their ballots for a Democrat as a Republican in congressional races; support for the Republican Congress has also declined about 10 percentage points since the beginning of the year. Says Democratic pollster Mark Mellman: "Independents are more likely to vote against somebody than for somebody; the question is,Who are they going to vote against? The Republicans are giving them lots of things to be angry and frustrated about." Recent polls show citizens believe two to one that the country is on "the wrong track." Says Frank Luntz, the Republican pollster who worked for Perot in 1992: While "the independent movement is gaining steam, particularly among [baby] boomers . they are still there, unassimilated."

Clinton may make himself more Perot-esque by appearing, against all odds, to get work done. He has developed a strategy to use Executive Orders to make things happen just as Congress is expected to be seized by gridlock on the budget this fall. By fiat, Clinton last week forced lobbyists who work at influencing the Executive Branch to register and disclose who is paying their fees. Similarly, he intends to compel federal agencies to limit cigarette sales to minors and, perhaps, to augment the environmental protections that Republicans voted last week to proscribe.

All that will be background noise compared with the unremitting fiscal conservatism that the G.O.P. candidates are likely to preach to an antideficit choir of Perot backers in Dallas. The Democrats can offer only a cacophony of views, ranging from the leftist tract of Jackson to the more centrist perspectives of House minority leader Richard Gephardt of Missouri and Senate minority leader Tom Daschle. Clinton counselor Thomas "Mack" McLarty, relatively conservative, will stand in for the President.

As for Perot, he is trying to play the humble host. "I'm a nobody from nowhere," he says. "I never should have been able to do all the things I did. I'm not a genius. I have just an ordinary mind." Really, he says, he hates politics. "You've got my sworn word that I'd rather have brain surgery without anesthetic than be around politics. It's an irrational experience, it's emotional, it's a magic act--now you see it, now you don't." But what if the major parties fail to measure up to his standards? He would run again, he says, "if I have to."

--With reporting by Laurence I. Barrett, Ann Blackman, James Carney and Michael Duffy/Washington

With reporting by LAURENCE I. BARRETT, ANN BLACKMAN, JAMES CARNEY AND MICHAEL DUFFY/WASHINGTON