Has Bob Rubin Cried Wolf Once Too Often?

He may be Corporate America's favorite Clinton Cabinet member. He's a fervent free-marketeer. And he's helping to guide the economy through one of its longest expansions in history. So why is Treasury Secretary Robert E. Rubin about as welcome on Capitol Hill as a tobacco lobbyist with a long memory?

Simple. GOP leaders hate what they see as his hardball partisanship and patronizing style. And they're still smarting over the way he outfoxed them on issues such as the 1995-96 budget showdown and a Hill push for sweeping tax cuts. "His credibility is very low," grouses House Majority Leader Richard K. Armey (R-Tex.). "We need to take everything he says with a huge grain of salt."

Now it may be payback time: Republicans are threatening to deny Rubin his way on everything from new financing for the International Monetary Fund to reform of Depression-era banking laws. The biggest casualty may be the Administration's request for $18 billion to help the IMF cope with Asia's economic crisis. House GOP lawmakers bristled when Rubin predicted--in a private meeting early this year--an Asian financial collapse within six weeks if Congress didn't send money without strings.

FIGHT BREWING. But the GOP dismissed such talk--and delayed a vote on the package. Now, as violence rocks Indonesia, Republicans are feeling vindicated because they have demanded major IMF reforms to increase the financial accountability of corrupt regimes. "He has become the Chicken Little of Washington," says a senior GOP staffer. "He thinks he can trick Congress. We're not that stupid."

Rubin is also brawling with Republicans as they consider an overhaul of banking laws. GOP leaders say distrust of him was one reason that the House voted on May 13 to give the Federal Reserve chief regulatory authority, not the Treasury, as Rubin demands. And while crafting the final version of an Internal Revenue Service reform package that Rubin initially fought, Senate Majority Leader Trent Lott (R-Miss.)--another Rubin basher--has toyed with the idea of removing him from the proposed IRS oversight board.

Clintonites praise Rubin's performance as Treasury chief, but they acknowledge his problem with the GOP. "Bob fights to the end for the things he believes in," says White House Chief of Staff Erskine B. Bowles. "They think he's very tough, unyielding. A worthy opponent like that ruffles feathers." Rubin concedes that "there have been a lot of contentious issues" pitting Treasury against the Hill. But, he says, "we've worked exceedingly well with a large number of Republicans in both houses."

SOUR GRAPES? In fact, bad feelings have been brewing since the stormy days of the budget standoff, when Rubin infuriated GOP leaders by warning that Congress was pushing the government toward default and a cutoff of Social Security checks--though neither was likely. Republicans suffered a public-relations bloodbath. "The bitter feelings still linger," notes a GOP leadership aide.

Democrats say Republicans are just frustrated because Rubin has bested them. "He is the most effective Secretary of the Treasury I've had the pleasure to work with in my 23 years here," says Representative John J. LaFalce (D-N.Y.), the House Banking Committee's ranking Democrat. And a former Rubin aide says the GOP gripes are merely sour grapes: "He's more credible on Wall Street than they are." Indeed, Rubin may still hold sway on the Street and at the White House. But he has lost his clout on the other end of Pennsylvania Avenue.

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