Bush’s Popularity Failed to Provide Clout : Politics: The President was forced to make compromises despite his high approval rating. He could also face a backlash from GOP conservatives.

With his approval rating topping 70% and the nation rallying around his Persian Gulf policy, President Bush seems at the apex of his popularity. But to reach an agreement on the federal budget, he was forced to make major concessions.

Bush dropped his insistence on “no new taxes” just to get the budget negotiations started, and he was forced to abandon his plan to reduce taxes on capital gains to bring them to a close.

In-between, he also gave in to Democratic demands for some $33 billion in increased taxes on upper-income taxpayers, including a complicated limit on tax deductions, increased luxury taxes and an increase in tax charges for Medicare.

The result illustrates the limits on how far a President can translate popularity in foreign affairs into political clout at home. And it also demonstrates the marked difference between Bush and his predecessor, Ronald Reagan, who refused opportunities to take a similar deal to reduce the deficit because of his insistent opposition to higher taxes.

Democrats also faced limits on their power. As Senate Majority Leader George J. Mitchell (D-Me.) noted, it remains unclear whether leaders of either party will be able to get their followers to ratify the politically unpopular compromises that the budget deal comprises.

“Now comes the hard part,” Mitchell said as the budget agreement was announced in the White House Rose Garden.

Less than four weeks ago, when he spoke to a joint session of Congress, Bush tried to use support for his Persian Gulf policy to leverage votes for his position on the budget. Strength abroad required strength at home, he told members of Congress. And strength at home, he said, would require a budget plan along the lines he wanted.

The gambit was chancy. Past presidents had “never been able to translate support for foreign policy into support for a domestic agenda,” conservative political analyst Kevin Phillips pointed out at the time. President Franklin D. Roosevelt, for example, was forced to give up much of his New Deal program during World War II.

Bush fared no better. During his speech, as on numerous occasions before and since, Bush specifically said that a budget agreement would have to include a capital gains tax cut--an issue he had advocated during his 1988 presidential campaign and one that he had pressed ever since.

But Bush could not budge Democratic leaders, who resisted on grounds that cutting the capital gains taxes favored the rich. In the end, over the last week, key Republicans, led by Senate Minority Leader Bob Dole (R-Kan.), abandoned him as well.

“Sometimes you just don’t get it just the way you want,” Bush said as he announced the budget deal. “This is such a time for me.”

Bush did obtain some items that he and his advisers wanted. The agreement includes new tax breaks for the oil industry, an issue for former oilman Bush, and new tax credits for research and development, which Bush and his aides believe will increase economic productivity.

The deal also provides an enforceable limit on spending for domestic programs--a step that will require congressional Democrats to make difficult choices over the next several years as constituencies clamor for more federal aid.

Above all, there is the deal itself, which will substantially reduce the federal budget deficit and which, at least for now, would break the deadlock over fiscal policy that had threatened to paralyze federal decision-making.

But the fact that getting the deal, in the end, did come before everything else underlines a central element of the Bush presidency. Unlike Reagan, who had a set of issues in which he believed strongly and on which he was unwilling to compromise, Bush, as his aides say, is basically interested in “process,” not ideology. There are few specific things the President will not sacrifice to achieve a compromise.

That approach makes it far easier to reach deals. But Bush’s style has costs as well. More ideological members of his own party already are angry at the President for giving up on causes they believe in. And the compromise on taxes--which remains one of the most potent political issues of the era--will deprive Republicans of a potent weapon as the fall congressional campaigns head into their final five weeks.

One indication of the problems Bush may face was the conspicuous absence of Rep. Newt Gingrich (R-Ga.), a leader of conservatives in the House, as the budget agreement was unveiled Sunday afternoon. Without the support of Gingrich and his followers, Bush will have to rely ever more heavily on the majority Democrats--a source of support that could prove increasingly shaky if Bush’s overall popularity slips.

HOW DEFICIT WILL BE CUT In billions of dollars

1991- 1991 1992 1993 1994 1995 1995 Discretionary programs 9.8* 22.6* 34.8* 53.2 62.0 182.4 Mandatory programs 12.1 20.9 23.9 28.8 33.3 119.0 Tax increases 16.2 26.7 27.0 32.1 31.8 133.8 Reduced interest costs 2.0 6.5 12.2 18.4 25.7 64.8 TOTAL DEFICIT REDUCTION 40.1 76.7 97.9 132.5 152.8 500.0

*Defense savings.

Source: Office of Management and Budget