Domestic Policy Spurs Hot Debate : Politics: Both parties realize the public will focus on concerns at home when the Gulf War cools down. But neither side offers a dramatic agenda.

With pictures of missiles and maps of the Middle East saturating the nation’s airwaves and the attention of its highest leaders, the deep-seated problems of health care, education and the economy have all but disappeared from public discourse.

But while attention has been riveted on developments in the Persian Gulf War, the neglected subjects of domestic policy have become the focus of intense debate among political strategists in both the Democratic and Republican parties.

Recognizing that public attention will swing sharply back to economic and domestic concerns once peace returns, both parties are struggling to chart new courses toward the next election and beyond.

The debate has been particularly intense among Republicans as they seek to develop a philosophy and a strategy for developing domestic policy in the post-Reagan era.

Although President Bush is expected to devote half or more of Tuesday’s State of the Union Address to domestic affairs, officials have cautioned against expecting bold new proposals. And many Republican activists worry that the Administration’s relative inactivity on domestic affairs could, over the long run, cause serious problems for their party.

In the State of the Union, White House officials say, Bush will announce proposals dealing with education, energy, civil rights and crime--though few are expecting dramatic departures. “There will be a few new things, but nothing major. No major new program that would anticipate spending billions,” says White House spokesman Marlin Fitzwater.

The lack of bold proposals disturbs some GOP activists. “There has been no initiative on anything you would call cutting-edge out of this Administration,” laments conservative strategist Paul M. Weyrich.

The good news for Bush is that Democrats have done little better at articulating a new domestic agenda. While Republican activists fear their party must find replacements for ideas of the 1980s, Democratic strategists are still searching for alternatives to those of the 1960s and 1970s.

As a result, leaders of both parties have fallen back on a strategy of advocating small changes--the sorts of programs that may be achievable, but not likely to inspire voters. In fact, many of Bush’s advisers, operating on the assumption that Americans are satisfied with the country’s basic direction, believe that often the best agenda is no agenda.

Publicly, White House aides have suggested the principal goal for the next two years is to block Democratic proposals with the veto; Bush has already vetoed 16 bills without being overridden.

“Principle and values sometimes have to be implemented by stopping things,” White House Chief of Staff John H. Sununu told one conservative audience recently.

But there are growing Republican concerns that when the war ends, this reactive approach will no longer do. Many conservatives, including some Administration officials, are urging the White House to take the offensive on domestic problems by “empowering” the poor through reform of social welfare and education programs.

Within the Administration, an empowerment task force is chaired by Housing and Urban Development Secretary Jack Kemp, who has long advocated that conservatives wage a war on poverty. In the White House, the chief advocate has been James P. Pinkerton, deputy assistant to the President for policy planning. Pinkerton has grandly christened these ideas as a “new paradigm” in domestic policy--borrowing a term scientists have used to describe a prevailing world view.

Pinkerton’s idea calls for shifting government programs wherever possible to the local level and relying on market principles, such as competition, in the delivery of social services.

But Pinkerton’s ideas have been publicly ridiculed by Budget Director Richard G. Darman, the Administration’s prevailing voice on domestic issues. And most conservatives doubt that Bush will advance a more aggressive domestic agenda of any kind--much less one as risky as radically redirecting education, housing and welfare policy to rely more on vouchers, choice and direct assistance.

Continued caution, however, carries its own risks for Bush, many analysts say. Though the gulf crisis has intervened, congressional Democrats are eager to resume the class-conscious populist maneuvering that caused Bush so much grief during last fall’s budget negotiations.

“It’s hard for anyone to focus on a lot other than (the gulf),” House Majority Leader Richard A. Gephardt (D-Mo.) says. “But inevitably this will be resolved one way or the other and we’ll move back to looking at our economic problems.”

To some extent, Bush’s natural preference for foreign affairs--reinforced by the enormous demands of the crisis in the gulf and turmoil in the Soviet Union--has created the vacuum in domestic policy. But to many observers, the Administration’s domestic difficulties represent the continued grinding down of the Republican agenda that began in 1982 when the Democrats regained working control of the House of Representatives and stymied former President Ronald Reagan’s efforts to further roll back spending and regulation.

“You really see a holding action from 1982 on,” says David Boaz, executive vice president of the Cato Institute, a libertarian think tank.

Even those such as Sen. Phil Gramm (R-Tex.), who view the Reagan economic policies as a revolution, agree that it has essentially been spent.

But the Democrats’ own difficulty at uniting behind bold new proposals frames Bush’s problem in a broader context: Many observers believe both parties have lost faith in their ability to design programs that actually ameliorate problems.

This is the backdrop against which discussion of the so-called new paradigm in domestic policy emerges. Pinkerton’s principles are finding favor with a diverse assortment of younger policy analysts--both liberal and conservative.

Aware that “paradigms” do not inspire political revolutions, many conservatives have cloaked them in an old liberal word, “empowerment,” familiar from the Great Society anti-poverty programs of the 1960s.

Rep. Steve Bartlett (R-Tex.), chairman of the 31-member Congressional Empowerment Task Force, says that the new empowerment agenda differs from its liberal ancestor by seeking to strengthen individuals, not the institutions that claim to represent them.

Accordingly, when the Administration’s empowerment task force presented its agenda to President Bush last month, the ideas included promoting educational choice programs and vouchers that allow parents to pick their children’s schools, backing expansion of welfare reforms that provide training and require work, and further encouraging tenant ownership of public housing.

Whatever the disagreement about the cure, both parties agree to a surprising extent that the major domestic problems cannot be rectified simply by spending more money on programs directed from Washington.

“More money and more centralization has in many areas yielded nothing,” says former Arizona Gov. Bruce Babbitt, who was a contender for the 1988 Democratic presidential nomination.