Is The Gop Taking Care Of Business?

Maybe, but industry isn't counting on a centrist GOP

In the wake of their drubbing at the polls on Nov. 3, Republicans are promising to mute the caustic partisanship that has defined the GOP since it seized control of Capitol Hill in 1994. Suddenly, Representative Robert L. Livingston (R-La.), the all-but-certain new House Speaker, is vowing to heal rifts between the GOP's centrists and archconservatives--and promising new overtures to Democrats, too.

By pledging to rule the boisterous House as a pragmatist, Livingston has cheered business leaders frustrated by years of gridlock. "I'm hopeful there will be less polarity," says Harold W. "Bud" Ingalls, CEO of Atlanta-based chemical company LaRoche Industries Inc. And business bills may fare better if Livingston can, as he promises, prevent social conservatives from jamming the system with debates over controversial riders on bills. That's what kept Congress from voting on bankruptcy reform this year.

Still, Corporate America isn't banking too heavily on GOP centrism. Executives still expect many top priorities--fixing Social Security, preventing high-cost health mandates, and Presidential fast-track trade authority--to face tough sledding. "We have a 50% chance to get two out of three of our priorities," says Tenneco CEO Dana Mead, chair of the Business Roundtable. Likely winners: health care and trade.

LEFT JAB? Why not more? For starters, Republicans have only a six-seat edge in the House. That means Livingston could be held hostage by a small group of diehard conservatives that has made the House GOP caucus often seem more like a passel of feuding clans than a cohesive unit. Many on the GOP's extreme right still believe it's more important to take strong ideological stands than to pass legislation. "I'd rather try and lose than not try," says Representative Tom Coburn (R-Okla.). That doesn't bode well for centrism. "I'm not sure the Republican Party is prepared to come enough to the center," worries Michael H. Bernstein, CEO of Atlanta-based textile maker Crown Crafts Inc.

Bipartisanship may also be elusive if it means a hostile GOP majority has to play nice with a President it has tried to kick out of office. The Democratic left could also become more vocal because of the strong election showing attributed to union members and minorities. And finally, with 2000 looming, Presidential aspirants may seek to stake out differences rather than seek consensus.

Still, Republicans concede that they have to pay attention to the Nov. 3 message: Stop fighting with Democrats and get to work on legislation. The best opportunity may be winning fast-track trade authority because of the new centrist Democrats. But finding common ground on many issues will be tortuous. For example, the GOP may back a diluted "patients' rights" bill that would expand the ability of consumers to appeal denials of treatment by insurers. But Republicans balk at what Democrats want most--the right to sue insurers.

On education, the GOP will be reluctant to abandon school vouchers, a key conservative initiative. But vouchers won't fly with Democrats. So, Republicans will probably press for school choice, while they also push less controversial initiatives aimed at strengthening public schools. Before now, "the Republican education platform has not taken into account fixing public education," says Representative Mike Castle (R-Del.), a moderate who champions after-school programs.

REALISM. Overhauling Social Security will be the Big Enchilada on lawmakers' plates. Republicans concede that Clinton's "save Social Security first" slogan is now accepted wisdom--and the barrier to tax cuts they crave. Ways & Means Committee Chairman Bill Archer (R-Tex.) has promised to pursue a bipartisan deal, but only if Clinton floats his plan first. Fat chance. Fearful of the kind of mauling his health plan got four years ago, the President is willing to provide only general principles. To get a compromise, Clinton may have to agree to convert a small portion of Social Security to private investment accounts--something that liberals will oppose vehemently.

Meanwhile, Republicans will try for a new round of tax cuts. But GOP visions of a 10-year, $1 trillion tax cut are fading as fast as their champion, Newt Gingrich. "We have to be realistic," says a top Ways & Means aide. Still, hardliners will howl if GOP leaders don't push for big cuts. "The `hold my breath til I die' caucus will probably make Livingston's life hell," says former Gingrich aide and lobbyist Daniel Meyer.

But after watching the disarray of the Gingrich House, Livingston seems willing to take the heat if it helps restore order. And if a more disciplined GOP Congress emerges, business will consider '99 a modest success.

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