(5 of 5)
More basic have been strategic questions such as how far to move toward the G.O.P.'s higher Medicare cuts and how much to slash discretionary spending in the later years of the five-year budget. Seasoned congressional hands, such as the departing Panetta and legislative-affairs director John Hilley, had argued for holding fast to what had proved to be a winning position last year. As Panetta said of Raines in an interview, "Inevitably, he's going to have to hold his cards when it comes to a negotiation." Raines and Bowles wanted to show more flexibility early, on the theory that it might help soften up the opposition. A few days after the election Raines even went so far as to approach G.O.P. strategist Ken Duberstein and House Speaker Newt Gingrich with the idea of writing a budget together--a prospect the Republicans found laughable after fighting a bruising campaign over that very issue. "I don't think it was being naive," Raines contends. "I think it was setting a tone."
Congressional Democrats are worried that the Administration has done more than that. Even before laying down his opening marker, the President has moved significantly on Medicare, after successfully lambasting the Republicans as the enemies of old people in the last election. Clinton is also sounding flexible about Republican demands for a broader cut in the capital-gains tax. Is the Administration negotiating with itself, nervous Democrats wonder? What is it getting in return for the $14 billion it has offered to give up on Medicare? And what is the value of a deal if it leaves the President's party standing for nothing but V chips and school uniforms? A significant value, Raines would argue, if it finally produces a balanced budget.
--With reporting by John F. Dickerson and J.F.O. McAllister/Washington