HERE COMES THE CANDY

By GEORGE J. CHURCH

What you see in Bob Dole's campaign is not what you get. Well...not always. Or not much longer.

So far, it is true, the campaign has often been as listless and unfocused as it has looked. Last week, for example, Dole spent his waning days as Senate majority leader--he leaves this Tuesday--pushing to a vote two doomed causes: the balanced-budget amendment and a land-based antimissile system. Both lost, not only on the floor, as Dole knew they would, but in public attention. That was captured by two of Bill Clinton's ideas: a new tax credit for college students and their parents, and a $200 reduction in closing costs on house purchases financed by FHA mortgages. Both proposals are open to criticism: the closing-cost move, for one, will benefit less than 10% of all new-home buyers. Never mind: the plans address two huge concerns of millions of families--the costs of college education and of housing--and they allowed White House spokesman Mike McCurry to hail hyperbolically "American Dream week."

Some of what has been emanating from the Dole camp lately, however, appears to be a sort of smoke screen. Campaign aides have let word get around that the candidate's forthcoming economic program will feature sweeping tax cuts. That has kept Republican supply-siders quiet but exposed the candidate to some heavy hits for supposedly abandoning his 35-year devotion to budget balancing. Democratic Senator James Exon of Nebraska, for example, jeers that Dole is becoming a "tax-cut candy man." Such sneering is at best premature. Much of it has been based on a 14-page memo from economists advising the campaign that has been widely leaked but was only a preliminary version of what wound up in Dole's hands.

In fact, say campaign insiders, Dole's program, though it will include tax cuts, will go far beyond them. If some top aides get their way, it will focus heavily on the pervasive insecurity many families feel despite economic growth and rising employment. The idea is that Dole would urge corporations to make increased use of such arrangements as flextime (greater freedom for workers to arrange different schedules day to day), to give workers more compensatory time for long hours and to provide more part-time work. All are spread-the-work schemes that might offer alternatives to the frequent pattern of heavy layoffs, exhausting overtime for the workers still on the job and an increasing reliance on temporary workers.

Details so far are fuzzy to nonexistent. Working them out will be one of the jobs of Donald Rumsfeld and Vin Weber, who last week were named co-directors of policy planning. Previously, what policy planning there had been was run out of Dole's back pocket, and that was plainly not working. Rumsfeld, a former White House chief of staff and Secretary of Defense, is regarded as a tough and smart operator, but some party veterans consider him to lack a sure instinct for what will win votes. They hope that deficiency will be compensated for by the appointment of Weber, a former six-term Congressman from Minnesota who is considered one of the G.O.P.'s sharpest minds.

Dole being Dole, plans are subject to change at any time. Right now, though, they call for an economic speech around convention time--that is, mid-August--that an aide vows will be the centerpiece of the whole campaign. The thinking is that the program has to make a bold, dramatic splash and contain a big element of surprise. The gibes of Exon and journalistic pundits to the contrary, however, that surprise will not be a wholesale conversion of the candidate to the supply-side banner. Everyone connected with the campaign swears that any tax-reduction proposals will be coupled with plans for additional spending cuts big enough to keep the budget moving toward balance--and without factoring in any wild assumptions about a surge in economic growth.

Clinton strategists affect to believe it. Says McCurry: "Our assumption is that Dole is positioned where he's always been"--as a fiscal conservative. It is, of course, a barbed compliment: Clinton's planners believe Dole is in a box. He might propose tax and spending cuts so modest as to wind up with what McCurry calls "a budget plan very similar to Clinton's." Or if he chooses something as expensive as the 15% across-the-board cut in income taxes that some advisers have widely touted, he would have to propose slashes in social spending much greater than those that terrified many voters last winter.

Clinton, meanwhile, is posing as Mr. Fiscal Virtue, proposing only tax cuts that are carefully targeted on worthy social purposes and offset dollar for dollar either by increases in other taxes or by specific spending cuts. His proposal to give a $1,500 tax credit annually to whoever pays for the first two years' tuition of every student going to college was widely interpreted as the opening shot in a tax bidding war with Dole. Administration officials insist it was nothing of the sort. The plan is relatively modest, costing about $8 billion over six years. They claim it would be offset by closing some corporate tax loopholes and increasing airport departure fees.

The goal is to make two years of college as universal as four years of high school now are--an idea that has popped up in Clinton speeches since 1992 and invariably draws loud cheers. Labor Secretary Robert Reich believes the credit will be especially helpful to workers ages 25 to 45 who want to attend community colleges for two years to learn skills that would qualify them for better-paying jobs. The program is patterned on one started in 1993 in Georgia and financed by a lottery that has supposedly helped 200,000 Georgians enjoy higher education--and Democratic Governor Zell Miller survive the 1994 G.O.P. sweep and win re-election.

So who could object? As it turns out, not just Republican skinflints but also some Democrats and even, behind the scenes, some members of Clinton's Administration. Their strongest point: the credit would be available to couples with incomes as high as $100,000. Asks Democratic economist Robert Reischauer: "Why give the $100,00-a-year family with a kid at Vassar $1,500?" He and others believe the $8 billion would be better spent to fund more Pell grants, which go only to needy students, or made available only to community-college students, or even devoted to strengthening elementary and secondary rather than higher education.

A deeper criticism is that the Administration is trotting out a new entitlement program--and the Dole camp is titillating voters with talk about tax cuts--while the major problem looming over the American future is how to pay for the two giant entitlement programs already in place. The trustees of both the Medicare and Social Security trust funds warned last week that bankruptcy is coming, and for each a year sooner than expected. For Social Security, the year in which no money is available to pay pensions at present rates was put at 2029, which to most politicians seems about four lifetimes away. But Medicare Part A will run out of cash to pay hospital bills in 2001, only five years away.

The Medicare report at least prompted some discussion, though in the form of partisan name calling. Republicans blamed Clinton for vetoing a bill that would have made some big savings in Medicare; the Administration shot back that Republicans had blocked Clinton's health-care plan, which would also have saved money for Medicare. In fact, both sides are likely after the election to agree on some sort of stopgap that would keep Part A solvent another five years or so. That might be done in part by accounting juggling, such as having Medicare Part B, which pays mainly doctor bills and is in better shape, take over some expenses that are now defrayed out of Part A's funds, as the Clinton Administration has proposed.

Nobody, however, wants to talk yet about longer-term Medicare solutions. And the silence on Social Security is positively deafening. Understandably so; any realistic proposals would have to involve higher taxes, lower benefits or a drastic restructuring of the programs, and the very thought both terrifies and infuriates many voters. The longer Medicare and Social Security remain the Great Unmentionables of American politics, however, the sooner the crunch will come and the worse it will be. The situation seems like one that a third party may eventually have to force the Democrats and Republicans to face. If a nonflaky Ross Perot who can command the attention of sober citizens does not now exist, it may be necessary to invent one.

--Reported by John F. Dickerson, Michael Duffy, J.F.O. McAllister and Eric Pooley/Washington

With reporting by JOHN F. DICKERSON, MICHAEL DUFFY, J.F.O. MCALLISTER AND ERIC POOLEY/WASHINGTON