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Bush Successes Baffle Opposition

Democrats search for lost chord that will resonate with public and help them seize initiative. DEMOCRATS' FUNK

THE political battle of the season - over cutting the capital-gains tax - is still going on. But the White House's stunning victory in the House of Representatives on the issue last week has sunk the Democratic Party even further into its deepening blue funk.

The major fall-season acts of President Bush have so far followed the current White House script - no new taxes. This included lobbying the capital-gains issue tirelessly for most of the year. The new Democratic leadership in Congress picked this latter issue on which to stand their ground. If the Senate also approves a cut, then the bill goes to a joint House and Senate conference committee.

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Bush's education summit with the nation's governors, heavily attended by regional as well as the national press, put his stamp on the education issue while largely drowning out demands for more federal money - the rallying cry of congressional Democrats.

After the President's largest and loudest single initiative, escalating the war on drugs, Democrats derided him for not putting his money where his mouth was.

But the derision made poor politics, since it ended up sounding suspiciously like a knee-jerk call for higher taxes, as some party leaders soon acknowledged.

Along the way, the White House has made many concessions, driven few hard bargains, and lost some important battles - most notably when the House redesigned its defense program, which is now in House-Senate conference committee.

But the Democrats have been unable to frame a response to Bush that strikes chords with the American public.

The problem is a deep one. Not only have more than 12 years passed since Americans last elected a Democrat as president, but President Bush retains his high public approval ratings and has succeeded in dominating the political agenda.

So the loss on the capital-gains tax vote is getting heavy scrutiny.

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Rep. Newt Gingrich of Georgia, the Republican whip, does not see a coalition like the one Reagan had in 1981 of Republicans and conservative Southern, Boll Weevil, Democrats. The capital-gains majority was ``very, very fluid,'' he says. He credits the skill of Bush, his chief of staff John Sununu, and budget director Richard Darman for putting it together.

Theories on why the Democrats lost the vote, and the political high ground in the issue, are still proliferating.

One factor is that more than half of the Democratic defectors had strong timber interests in their districts, an industry pushing hard for the cuts.

Another observation is that the defectors were mostly from districts that voted for Bush in the last election, so the congressmen were bowing to his mandate. Still another is that elections are more than a year away, but fund raising from wealthy payers of capital-gains taxes is hard upon Congress.

Many Democrats point to tactical errors. Instead of standing on principle against the tax cut for the wealthiest and winning or losing honorably, the Democrats added a tax cut of their own based on retirement plan deductions and included a tax increase for the wealthiest taxpayers.

They ``muddied the waters,'' says University of Maryland professor and Democratic strategist William Galston. ``They should have lost the vote and won the issue on the moral high ground.''

The most widely taken lesson centers on Rep. Richard Gephardt (D) of Missouri, majority leader and leading House spokesman on the capital-gains issue, and on his rhetoric of class warfare that summoned visions of another tax break for Leona Helmsley and her ilk. The lesson is this: In a nation of people with ambitions to be affluent themselves someday, class warfare does not sell.

William Schneider of the American Enterprise Institute credits the legacy of Reagan - massive deficits and strong anti-tax sentiment - for Bush's success. ``Bush controls the agenda as long as he is against taxes,'' he says. ``If Bush raises taxes, the Reagan-Bush coalition evaporates.''

Meanwhile, Bush has deftly identified himself with popular concerns without committing government money. So, says Mr. Schneider, ``he gets credit for good intentions.''

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