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The preliminaries have already begun. In meetings with incoming White House chief of staff Erskine Bowles, House minority leader Richard Gephardt--Al Gore's likeliest rival for the 2000 nomination--has warned the Administration not to go beyond the 1995 Democratic proposal of $124 billion in Medicare cuts. To distinguish himself from Gore, Gephardt knows he has to play to Democratic loyalists like seniors and union members. "I'm not going to be for something that slashes Medicare," he says. Though some form of means testing is all but inevitable, trustees say, Gephardt won't hear of it, and Clinton isn't ready to discuss it. If he did, Gephardt would probably join the opposition, placing himself on the side of the 34 million-member American Association of Retired People against Clinton, Gore and boomers, who wonder who will pay for their retirement. Never mind that getting the ugly necessary fight out of the way early--and reuniting the country long before Gore and Gephardt start tramping around Iowa--could be Gore's best strategy.
Gephardt has also warned the Administration against getting budget relief by revising down the Consumer Price Index, which is apparently giving retirees cost of living increases about 30% higher than the rate of inflation. Bringing the CPI even halfway into line with economic reality would shave billions off the deficit. But Clinton and Gore don't need the savings to balance the budget this year, so they'll consider a CPI adjustment down the road.
Clinton and his new team--a competent, bland bunch of centrists--don't want to stake the success of the second term on perilous negotiations with Congress. The lesson of the still unfolding Gingrich scandal, White House aides say, is how much control members of the G.O.P. leadership still exert over the rank and file. In an intensely partisan atmosphere, collecting votes from G.O.P. moderates is going to be tough for Clinton. So he is choosing to forge ahead with the strategy that worked so well for him last year. Its essence: avoid grand legislative schemes and bypass Congress altogether in favor of low-cost proposals, Executive actions and speeches that highlight local initiatives, especially on welfare reform and education, which Clinton sees as his best shot for a lasting legacy. "Most of this work isn't done in Congress," says McCurry. In the coming weeks, Clinton will travel to state capitals to exhort legislatures to beef up educational standards and help put welfare recipients to work.