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As summer turned to fall and Clinton entered into protracted budget negotiations with Gingrich and the G.O.P. leadership, Morris kept predicting that a deal was imminent. By September, he said. Then by Halloween. Morris was back-channeling with then majority whip Trent Lott, but Lott couldn't deliver. Morris wanted a deal desperately. He thought it was essential to Clinton's re-election. He was wrong. Stephanopoulos and Gore were arguing that Clinton had to stand up to Gingrich on Medicare. Clinton agreed. It was the shrewdest move he made all year.

Penn and Schoen polled four different budget-battle "outcome models" to see which worked best for Clinton. Penn was heartened to see that voters would blame Gingrich's "train-wreck" scenario--a standoff that shut down the Federal Government--on the Republicans. Still, the President was concerned that the public ire would bruise him, as well. A few days after the first shutdown began, Clinton showed his political director, Doug Sosnik, an independent poll that indicated most Americans blamed the G.O.P., just as Penn had predicted. "Penn showed you that poll two weeks ago," the affable Sosnik reminded the President. Clinton laughed.

When Gingrich shut down the government a second time, in December, Dole drew the line. He walked onto the Senate floor and ended it without telling Gingrich or anyone else. He was being true to himself, but he acted too late. Clinton had won. He shot ahead of Dole in the polls; it was never close again. Clinton's genius was to choose a winning hand from both sets of advisers: he co-opted the balanced budget, as the consultants advised, and demagogued Medicare the way the Old Guard wanted. This created his key message: "Balancing the budget in a way that protects our values and defends Medicare, Medicaid, education and the environment." So often was this mantra used that the team referred to it as simply M2E2. Clinton had arrived at a golden synthesis, bridging the traditional Democratic notion of protecting entitlements with the New Democratic position of fiscal responsibility. Of course, he did it through sleight of hand. His budget proposals didn't come to grips with spiraling Medicare costs and deferred the most painful cuts until after his second term.


During the budget brouhaha, Penn and Schoen became convinced that Clinton and his Administration were too downbeat about the economy. Thanks in part to Clinton's hard-won deficit-reduction package of 1993, interest rates were low and the economy was picking up. But Labor Secretary Robert Reich seemed permanently pessimistic. Ickes told the Boston Globe that the country was going through a period similar to the Great Depression. Penn became alarmed when, during a late-night interview on Air Force One, the President told reporters that he was "trying to get people out of their funk." The Clintonites, Penn and Schoen felt, were mired in their 1992 mind-set, avoiding what they called "the Bush mistake"--appearing to be out of touch by talking about economic progress when folks were hurting.

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