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White House communications director George Stephanopoulos acknowledged that a vat might be one way to help pay for health care for uninsured Americans. But Administration officials fanned out to pour cold water on the idea, and Gore said last Friday that it was not an option in the "near term." Shalala, who, as yet, plays no pivotal role in either tax policy or health-care reform, was invited to the woodshed for a talk with White House chief of staff Mack McLarty. "It is classic Shalala," said one angry White House aide. "She's independent, and now everyone here is furious with her."
But it wasn't all Shalala's fault. The VAT incident proved that Clinton, despite his best efforts, cannot stay abreast of everything his Administration is contemplating. He is already, in the view of some aides, trying to do too much too soon: though he promised to focus "like a laser beam" on the economy, he has to worry about health care, meetings with a dozen foreign leaders, consultations on a new Supreme Court Justice as well as a day-long forest summit, not to mention aid to Russia and the crisis in Bosnia. Even before the stimulus plan began to run aground three weeks ago, White House officials feared that Clinton was overextended. "Here we are at day 72 having a forest conference." said one slightly exasperated senior official. "We may be in danger of overloading the circuits."
One consequence of all the conflicting priorities is that Clinton never made a clear case for the $16 billion stimulus outlay. His aides ginned up the emergency-spending package during the transition, but immediately encountered opposition from members of his own party, who pointed out that it added $19.4 billion to the deficit just when Clinton said he was trying to cut it. The President countered by saying the stimulus package would create work for the unemployed in a "jobless recovery," though nearly one-quarter of the money would go to unemployment insurance, and $1 billion would be devoted to short- lived summer-jobs programs.
Because its ostensible purpose was to kick-start a weak recovery, the stimulus plan put Clinton in the awkward position of rooting for a bad economy in order to get it passed. Last week the White House was forced to acknowledge that Labor Secretary Reich had mischaracterized an exceptional jump in new jobs in February to give the impression that the economy was in worse shape than in fact it was. To bolster the case for the stimulus, Reich asserted at a special news conference that 90% of the 365,000 new jobs were part time, though it was later revealed that the Labor Department has scant evidence to back up Reich's assertion. Stephanopoulos admitted Reich's exercise in gloom and doom was "misleading."
But it was not until the Republicans seized on the $2.5 billion in community-development block grants to cities and states that the stimulus began to falter. They circulated a U.S. Conference of Mayors survey of potential projects -- including an "alpine slide" in Puerto Rico, a brewery renovation in Minnesota, tennis-court resurfacing in Alabama, an ice-skating warming hut in Connecticut -- that suggested Clinton's stimulus included some old-fashioned federal largesse. That none of these items were officially in the budget hardly mattered; "The Republicans," said a White House aide, "did a very good job of defining it as pork."