REPUBLICAN ROLE MODEL

By DAVID VAN BIEMA

WHAT MAKES A PERSON A G.O.P. VICE presidential candidate? It would help if he were Colin Powell, but barring that, it would be nice if the candidate hailed from an electoral swing state. He or she might belong to a sought-after voting group like, say, Catholics. But most of all, you would want someone who has been on the national scene without being a Washington pol. Someone who knows how to get things done. A Governor.

It is a good year for Governors in America, and last week was their best yet. The National Governors' Association arrived in Washington on Feb. 3, and within days it had managed what Bill Clinton and the Congress could not. Last Tuesday, in a unanimous and bipartisan vote, the Governors passed a six-page policy outline on both welfare and Medicaid reform. The Medicaid scheme leaned in the Administration's direction, maintaining some federally mandated health guarantees for the disabled, pregnant women, the elderly and children up to age 12. The welfare outline was closer to what Congress wants: states would get their federal money with few strings attached and be allowed to cut up to 25% of their own contribution; poor people would be required to find jobs and would be kicked off the welfare rolls after five years.

While liberal groups called the plan a heartless gubernatorial money-grab, Newt Gingrich said it could become law as early as March, and Clinton called it a "huge step in the right direction." Whatever its fate, it has further beatified the Governors. Specifically, it has enhanced the vice presidential chances of John Engler, one of its key Republican negotiators. Portly, balding, tenacious and smart, Engler does happen to govern a swing state, Michigan. He is Catholic. More important, he has slashed government and welfare rolls, been reviled for it, but ended up victorious at re-election. Says conservative editor and strategist William Kristol: "He's an obvious V.P. choice. I think after Powell, Engler is the most likely choice."

Engler's beast-to-beauty story began in 1990, when he defeated Democratic incumbent James Blanchard by a margin of less than 1%. Engler was not particularly popular, but he promised to dig a strapped Michigan out of a $1.8 billion deficit without raising taxes. He lost no time starting. Half a year after his election, he shocked observers by eliminating Michigan's general-assistance program for the state's 83,000 childless, able-bodied poor. Then he moved on to civil servants, cutting 20 boards and commissions and 5,000 state jobs.

Many Michiganders thought he would soon be unemployed himself. In the fall after his welfare move, two homeless men whose payments had been cut lit a fire for warmth in an abandoned house and asphyxiated. An "Englerville" shantytown sprouted in front of the state capital. Engler was widely described as mean; his own pollster put his approval rating at 31%.

He toughed it out and was rewarded. From 1993 to 1995, Engler's budget slashing--along with a providentially strong recovery by Michigan's auto industry--enabled him to cut taxes 21 ways and increase them only once. In place of the huge deficit, there was a $300 million surplus. Engler forged on with an intensive welfare-to-work program that he claims has found jobs for 30% of the recipients. Critics have called that number incomplete and misleading. But Engler's boast of having saved $100 million on welfare reform became his national calling card. As the state's economy improved further, he declared, "The rust belt is history." In a breathtaking political resurrection, he was re-elected in 1994 with 61% of the vote, having turned Michigan from the mightiest bastion of the industrial welfare state into the very model of the Republican future.

At least that is how it appeared to awe-struck House Republicans, who desperately craved Scrooge-makes-good stories as they pushed their budget-balancing legislation last year. Engler began commuting to Washington as a combination welfare guru and motivational speaker. Republican commentator Mary Matalin remembers what the House freshmen took away from one pep talk: "You gotta lead. They're going to demagogue you, your numbers are going to go down, but you have to hang on."

Gingrich was particularly fascinated by Engler's strategic savvy. Kristol recalls that after the government shutdown failed to push the President into a budget deal and forced Gingrich to abandon the strategy, on Jan. 6 the exhausted Speaker sought out Engler, who was in town. "It was striking that after this momentous day in his leadership, he wanted to bounce ideas off John more than anyone else," says Kristol. The three rendezvoused in a Hyatt hotel coffee shop. "John had the insight that you couldn't force Clinton to do things," says Kristol, but that the Congress could send him legislation that presented unpalatable choices--on welfare, for instance. "You could put him in a very difficult position: either...be the person who prevented us from reforming welfare, or sign Republican welfare reform and really split his own constituency."

Engler's work on last week's welfare and Medicaid compromise can be seen as a further refinement of that strategy. In January the Governor threw a scare into some true believers by announcing a limited-area research effort called Project Zero. The still sketchy project involves intensive (and presumably expensive) intervention by welfare workers to learn why some people won't work; it includes no time limits, so some thought it signaled Engler's opposition to the congressional Republicans' five-years-and-you're-out philosophy. His fellow Governors knew better. Wisconsin's Tommy Thompson reports that Engler, a notoriously hard bargainer, played "bad cop" on the Republicans' three-man negotiating team. He helped box the Democratic Governors into an agreement that could vex the Clintonites: it maintains the entitlement-trashing that appalls the Administration's liberal wing, but its Governors' seal of approval would make it excruciating for the President to veto any such legislation. It is the kind of product that could get its manufacturer tagged as a national figure.

Flying back to Lansing in a Michigan State turbo-prop last Tuesday, Engler was confident but self-deprecating about all the mentions of his vice presidential prospects. First he dodged: "I would be excited about having some role in developing an agenda for a Republican President and in helping communicate that agenda." But then he asserted, "If Al Gore can do this job, then I can do this job." The little plane shuddered through some rough air, but bumpy rides don't perturb Engler. As he began talking about Michigan politics, his words were applicable to his personal ambitions as well. "I know you don't always get what you want the first time out, but you have to be prepared, you have to be ready, and you have to stay with it." If Engler doesn't end up on the ticket this year, the odds are he'll be back.

--Reported by Tamala M. Edwards and J.F.O. McAllister/Washington and William A. McWhirter/East Lansing

With reporting by TAMALA M. EDWARDS AND J.F.O. MCALLISTER/WASHINGTON AND WILLIAM A. MCWHIRTER/EAST LANSING