Budget, Gulf Crises Could Make or Break Bush Term : Presidency: Analysts see him as a Thatcher or a Carter, depending on how he handles these challenges.

In 1979, Jimmy Carter tried telling the nation it had to make sacrifices to pull itself out of the economic doldrums. As much as any event in his White House tenure, including the Iran hostage crisis, the speech that summer night became a turning point in his presidency. The turn was directly downward.

Now, facing a dangerous and uncertain confrontation in the troubled Persian Gulf and trying to deal with a rebellious Congress, George Bush may well be facing just such a defining moment.

Nineteen months into his presidency, the crucial political authority that stems from deep presidential popularity is on the line. Bush is demanding popular support for the dose of bitter medicine he has prescribed throughout the economy, while putting thousands of American lives at risk in the Middle East.

The immediate political result is very much up in the air. It is not likely to be fully defined until a budget is approved by Congress, at the earliest, and quite possibly not until the Persian Gulf confrontation with Iraq has been resolved. Still, this much has already come into focus:

--The extraordinarily long honeymoon that allowed Bush to glide through the first year and a half of his presidency unscathed by the harsher realities of political life has, with the failure of this week’s budget accord, come to an end.

--Despite the unusual image of harmony that his budget effort tried to present--with the most senior Democratic and Republican leaders of the House and Senate falling into step with the Republican President--Bush is facing a rank-and-file rebellion.

It has been fueled by a bubbling well of popular dissatisfaction that sprang to life almost as soon as Bush asked the nation on Tuesday night--in a televised speech from the Oval Office--to accept budget cuts and tax increases that he said were necessary to fight a budget deficit that is “a cancer gnawing away at our nation’s health.”

His plea was not met by the deluge of telephone calls in support of the arduously constructed compromises that he hoped would sway members of Congress fearful of voting for politically unpalatable proposals.

Rather, such measures as reductions in Medicare services and higher cigarette and alcohol taxes prompted a groundswell of opposition from what one White House official described as “the auto workers, the old people, the smokers, the beer drinkers.” And such opposition made it all the more difficult, barely a month before Election Day, for members of Congress to bend to the pleadings of the President and their own congressional leaders.

The approaching elections, said White House Press Secretary Marlin Fitzwater, “had considerable impact” on individual representatives’ votes.

Besides, he said, “the day of a kind of a lock step of party actions and so forth is past, when you get to these kinds of very detailed and very complex votes that go to the very core of members’ beliefs and members’ constituencies.”

As a result of the failure to obtain the show of support he so aggressively and publicly sought, “Bush faces critical decisions now,” said Jerry Jordan, an economic adviser in the Ronald Reagan Administration and now the chief economist at the First Interstate Bank in Los Angeles.

“On the budget, he has to be ready to take on the U.S. Congress,” Jordan said. “At the same time, he can’t afford a stalemate in the gulf. There’s no middle path. Either his confrontations with Congress and Saddam Hussein go really well or they will go really bad. How he acts will determine whether Bush gets Thatcherized or Carterized.”

His reference was to the initial acclaim that greeted British Prime Minister Margaret Thatcher’s stand-tough approach during the Falkland Islands War and throughout a period of economic hardship, and to the political disaster that befell Carter.

“Mrs. Thatcher, with the economy and in the Falklands, fought on principle. She said here is where I stand and she carried it through,” Jordan said. “There’s a real danger to the world in the weeks ahead. Now we have one superpower in the world. If Bush is Carterized, the world will have no superpower.”

At the White House, the most optimistic view is that while Bush put himself out on a limb, the congressional leadership is out there with him. That means, said a senior White House official, “the limb’s pretty crowded.”

But that overlooks one point: Voters who are unhappy with the results may look unfavorably on the performance of Congress as an institution, but they can vote against an individual President.

To be sure, Bush’s popularity, as measured by public opinion surveys, has been running at 70% and greater--a remarkably high number for a President this far into his term. But by one account, private polls taken for the White House have found that the figure has tumbled by 10 to 12 percentage points over the last several days, despite overall support for the deployment of more than 170,000 troops to the Persian Gulf.

“It shows just how much of his current popularity is tied to the gulf,” said Michael Berman, a Democratic lobbyist and close adviser to former Vice President Walter F. Mondale.

But in the end, suggested Doug Bailey, a Republican political consultant and publisher of the political newsletter Hotline, “congressional and Washington incapacity is devastating for all incumbents.”

“I don’t know if that translates in 1990, but it certainly will down the road. It feeds the anti-incumbent fervor enormously,” he was quoted as saying in the privately published White House Bulletin.

In his view--and it is shared elsewhere--any outsider “who can now run against Washington’s absolute incompetence” could come up the winner. The name most frequently mentioned in that category is New York Gov. Mario M. Cuomo, who is way out in front in his campaign for a third term, and who has made no solid disclaimers--as he did four years ago--about being interested in seeking the White House two years hence.

Among the losers, Bailey said, is the President. “It is clear he is not in command here and is not feared as a presidential leader.”

Indeed, Rep. Robert T. Matsui (D-Sacramento) said that the budget deadlock has gone beyond partisanship to the question of “can we govern?”

And, while Congress’ image may suffer, Bush may have been deeply hurt within his own party.

Having stood up to the President, Rep. Newt Gingrich of Georgia, the second-in-command of the House Republicans who led the GOP revolt against Bush, can feel freer to take Bush on politically without paying a price back home--much as Democrats began to challenge Carter openly in 1979 and 1980, Matsui said. So, too, can other Republicans, as well as Democrats.

“The President is on the line. He could go to the brink,” said Thomas Mann, a congressional scholar at the Brookings Institution, a Washington public policy and research organization.