I Hear You, I Hear You

In heeding the advice of critics on taxes and the Supreme Court, is Clinton playing smart politics or choosing the path of least resistance?

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Clinton's latest approach to his economic plan is designed to make his colleagues on the Hill take some of the heat as they search for a compromise. "You want to let this thing roll on its own," explained one senior Administration official, "because you don't know where it's going." The ( problem, however, is that effective control of Clinton's economic plan has now passed from the White House to Washington's army of special interests. The dismemberment of his energy tax is a case study in how difficult it has been for Clinton to make good on his pledge to rebuff those diverse interests in favor of the larger good.

In the failure of the BTU tax, Clinton is simply reaping what he has been sowing ever since he unveiled his economic plan in February. Clinton undercut his claim that all Americans would sacrifice equally. He granted a steady string of energy-tax exemptions to key lawmakers, special pleaders and important industries. Farmers won exemptions on diesel fuel for tractors. Majority Leader George Mitchell won an exemption for home heating oil, an important commodity in New England. Clinton himself agreed in an April telephone call (from a Congressman at a pay phone in Oklahoma) to change the way the tax would be collected on natural gas, electricity and oil.

The effect of all the dealing, lobbyists say, was to encourage other special interests to seek similar exemptions in the name of fairness. "While we're labeled the lobbyists and special interests by the President and Lloyd Bentsen," said Jerry Jasinowski of the National Association of Manufacturers, "they put in over a dozen special-interest provisions in this thing."

Once the bazaar was open, the professionals rushed in. In April Jasinowski's group got together with the American Petroleum Institute, 1,600 large companies, small businesses and farmers to form the American Energy Alliance (AEA), a group designed solely to defeat the BTU tax. The coalition paid more than $1 million to Burson-Marsteller, a public relations firm, to deploy nearly 45 staff members in 23 states during the past two months. Burson's goal was to drum up as much grass-roots outrage about the BTU tax as possible and direct it at the swing Democrats on the Senate Finance Committee, including David Boren of Oklahoma, Max Baucus of Montana, Kent Conrad of North Dakota, John Breaux of Louisiana and Thomas Daschle of South Dakota. The goal was to win at least one Democratic vote; that would be enough to stop the tax in the Finance Committee, where the Democrats hold an 11-9 majority.

Like a death in the Old West, the demise of the BTU tax came fast and cheap. Burson's operatives drafted anti-BTU editorials and sent them to copy-hungry weekly newspapers. They helped school boards figure their estimated annual energy taxes. They commissioned local economists to produce studies about potential job loss and then organized rallies and press conferences to publicize the results. They bombarded TV and radio stations with feeds from local business owners angry about the BTU tax. "It was unlike anything I've ever seen," said Brent Stanghelle, farm-news director of radio station KMON in Great Falls, Montana. "It was like spring planting -- frantic, crazy. I couldn't begin to take all the calls."

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