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An enfeebled government in action

In the history of the 15-year struggle to stop the hemorrhage of deficit spending that began with the first Reagan budget, there have been some notable missed opportunities.

One occurred while President Reagan was in office, when he and then-Speaker Tip O'Neill pulled out the props from under a major fix that had been negotiated by the key Senate leaders of the opposing parties.

Another occurred during the 1988 presidential campaign, when the work of a bipartisan commission headed by Democrat Robert S. Strauss and Republican Drew Lewis _ set up to give political cover to whichever candidate was elected _ was discounted in advance by winner George Bush's perishable "no new taxes" pledge.

Last week, President Clinton may have blown another historic opportunity when he let it be known that he would not endorse the proposal for a blue-ribbon commission to recalculate the Consumer Price Index, which, in the view of many economists, overstates inflation and thereby costs the federal government billions in lost tax revenues and additional retirement payments.

The commission idea had been endorsed by Federal Reserve Board Chairman Alan Greenspan, by Senate Majority Leader Trent Lott, R-Miss., and by the top Democrat and Republican on the Senate Finance Committee. Franklin D. Raines, Clinton's director of the Office of Management and Budget, publicly praised the concept, and White House officials led Republican budget-writers to believe that the president would lend his prestige to the project, which potentially could contribute hundreds of billions of dollars in savings toward the goal of a balanced budget by 2002.

But now the White House has thrown in the towel on the commission idea that Lott had called "absolutely essential" to reaching a bipartisan agreement. White House officials told me that a CPI adjustment is still possible later this year _ without a blue-ribbon commission _ and argued that even if it is not included, a good budget deal can still be reached.

But most congressional Republicans share the view of Sen. Judd Gregg, R-N.H., a key Budget Committee moderate, who told me that "the CPI adjustment is the engine that pulls the whole budget train. When the president made his decision, he cut the legs out from under those of us who were trying to make substantial progress this year on entitlement reform."

This turn of events casts a harsh light on several of the factors that have immobilized the federal government and led to the growing public frustration with our politics.

First, it shows how demagogic campaigns impede the task of governing. House Republicans were adamant that Clinton had to be out in front on the politically risky inflation adjustment, because they felt they had been burned by his use of the Medicare issue in the 1996 elections, when he called their proposed restraints in the growth of that retiree program unconscionable "cuts."

Second, it shows the damage that Washington scandals have wreaked on the leadership of both the legislative and executive branches. Embattled Speaker Newt Gingrich, R-Ga., yielded control on this issue to Majority Leader Dick Armey, R-Texas. Armey, who is trying to broaden his base of support as a possible Gingrich successor, responded to the fears of his own caucus members and refused to join Lott in endorsing the commission idea.

As for Clinton, White House officials tell me he really wanted a commission, but was persuaded to abandon the idea in the face of opposition from House Democrats and their leader Dick Gephardt, D-Mo. A White House emissary said that at one crucial meeting with 26 Democratic members, not one was ready to support the commission idea. Instead, they rebelled at a budget that would include both a CPI adjustment and the kind of tax cut Republicans want.

Even though Clinton helped himself in the 1996 campaign by showing his independence from the doctrinaire liberal House Democrats on such issues as NAFTA and welfare reform, all the campaign finance scandals and other investigations swirling around his head have left him too weak to challenge those Democrats now.

Finally, and most importantly, the episode shows the increasing power of interest groups on the Washington scene. House Democrats, who are dependent on organized labor for campaign money and on senior citizens for votes, simply do not believe that the president can provide them sufficient political cover to risk offending those constituencies on an important matter.

The result of all this is enfeebled government _ and the kind of weak compromise we now are likely to get, if we get any result at all, from the budget negotiations.

Washington Post Writers Group