When Both Parties Agree to a Weakened Washington : Government: The public distrusts big federal programs but wants big solutions to social ills. That contradiction could be the issue of the ‘90s.

George Bush, who has spent his career shuttling between elected and appointed office, does not hate government any more than a carpenter hates wood. Unlike his predecessor, Bush does not consider the phrase “government service” an oxymoron.

Yet Bush’s proposals for the use of the federal government remain thin. His programs, like his public appearances, are characterized by modesty. On drugs and education, his top domestic concerns, he has committed more words than dollars--and instead pressed the states for greater investments. At every opportunity Bush encourages private actions.

Liberals hear these pleas and say Bush lacks an agenda. Some Republicans agree. But other conservative strategists maintain the very modesty of Bush’s pursuits may hold a key to his success. In his suspicion of sweeping government initiatives, they argue, Bush is in tune with the fundamental trend of the times--a withering of the power of centralized governments in a decentralizing world.

“Bush has taken a skeptical position toward new programs, public investment, and microeconomic management,” said Hudson Institute President Mitchell E. Daniels Jr., a top GOP strategist. “His detractors would say he doesn’t have much of a program; I suppose that’s another way of saying he realizes there are limits to what government can do.”

To Daniels and other conservative thinkers, the deficit is only the most visible constraint binding the federal government. They see far larger forces limiting not only our government but all governments: rapid international capital flows that reduce any nation’s ability to control its economic destiny; a growing emphasis on the private sector, plus explosive technological change in computers and communications that provide individuals with more powerful tools to challenge centralized authority.

“American government, along with central governments everywhere, is in decline versus private institutions, private individuals, private decision making,” Daniels argued in a speech last fall.

The collapse of communism in Eastern Europe stands as the most vivid testament. But there’s no question that even in the United States, the federal government’s maneuvers now strike many voters as muffled reports from a distant front. In policy circles, too, Washington seems less relevant--even in the Democratic Party, where support of a powerful central government had been an article of faith since the New Deal. Twenty-five years ago, the brightest young Democratic activists--believing the states incapable of solving social problems--sought to federalize responsibility for eradicating poverty and inequality with the Great Society. Today, the brightest young Democratic activists are more likely grappling with those problems in the states than debating them in Washington.

For many of these young Democrats, waiting for guidance from the capital makes as much sense as sending oil tanker crews to learn safety techniques from Exxon. “We are in a situation now, where . . . Washington is less and less capable of solving social problems, as we thought in the 1960s, by ginning up a big federal program,” said Will Marshall, president of the Progressive Policy Institute, a think tank founded by centrist Democrats. Instead, Marshall says, Washington’s new role may be to disseminate ideas generated in the states.

Citing such apostasy in the Democratic flock, James P. Pinkerton, a young aide in the White House policy planning office, recently argued that forward-looking analysts in both parties are drifting toward an “emerging national consensus,” that they are rejecting “the false assumption that experts . . . could somehow administer prosperity and equality from an office building somewhere (in Washington).” Replacing that frayed consensus, Pinkerton contended in a speech earlier this month, is a “new paradigm” that stresses decentralized solutions tailored to local conditions, individual choice and pragmatism.

To Pinkerton, Bush’s enormous popularity can be explained largely because he is far more aligned with those trends than traditional Democrats who still define the party’s image. Yet in this atmosphere of change, both parties are demonstrably uncertain about where to draw the line between public and private responsibility.

Republicans have clear rules on economic issues: toward limiting the role of government, minimizing taxes and encouraging voluntary solutions to public problems. But the GOP social agenda cracks against those convictions by agitating for government control over the intensely personal decision of abortion. If the “new paradigm is characterized by increasing individual choice,” as Pinkerton said in his speech, Bush’s opposition to choice on abortion places him in the old government-knows-what’s-best camp.

As wrenching as that contradiction is likely to be for the GOP, the Democrats may face even greater agony reconsidering their commitment to solving problems from Washington. With the end of the Cold War defusing the struggle between hawks and doves that has divided the Democrats since Vietnam, debate over the proper role of government may finally take center stage inside the party.

On social issues, there isn’t much for Democrats to discuss: The party is as strongly committed to individual choice as the GOP is on economic issues. But on economic issues Democrats are as confused as the GOP is in the social sphere.

Many younger Democrats, for example, now support government-business partnerships to compete with the Japanese and other foreign competitors in strategic high-technology industries. Compared with the plans for a massive new government bureaucracy that marked Democratic industrial-policy proposals in the early 1980s, these consortia, managed by private firms, represent a decentralized response to the competitive threat.

But they remain far too centralized for party critics who believe any effort to integrate Washington into industrial planning would stifle individual entrepreneurs. The problem with the Democrats pushing partnerships “is that they still look to the federal government as the salvation,” said Marshall.

Predictably, most Republicans share Marshall’s sentiments. But even inside the GOP the feeling is not universal. Many staunch business leaders support a greater government response to the economic threat of Japan. Their anxiety may eventually compel the GOP to reconsider.

Even to Daniels, trade problems are a reminder that the trend toward a diminished role for the central government has limits too. And clearly, despite all the centrifugal forces working against it, there are tasks only the national government can handle: providing infrastructure, funding the social safety net and national defense, conducting foreign policy, regulating environmental problems that states cannot police alone.

Beyond that, though, the public remains as ambivalent as the experts about what Washington should take on. Though polls since the mid-1980s have shown voters are eager to see the government attack social problems such as homelessness, those sentiments have been tempered by skepticism that Washington could achieve its aims. Accordingly, voters have been unwilling to fund the experiment with new taxes.

The tension between the public’s concern and its skepticism has produced the political gridlock in the capital--a stalemate exacerbated by all the decentralizing forces Daniels has identified. But behind the political breakdown real needs remain--in education, poverty, competitiveness. And if those problems sharpen further, Bush’s caution could be seen as merely passing the buck.

For all the power in the trends identified by Daniels, Pinkerton and others, it would be dangerous for either party to assume that the public’s skepticism of centralized bureaucracy has eliminated the pressure for the federal government to address enduring concerns. There is no evidence that the public wants Washington excluded from future efforts to confront those problems. Finding new ways to respond to those anxieties in an era when the federal government’s powers are limited may be the pre-eminent challenge facing both parties in the 1990s.