The HEW and Cry of Clinton and Bush’s Domestic Dispute : On health, education and welfare policy, the President says the Democrats are repackaged liberals, and the Democrats say the President ‘tinkers’ at social ills.

Call it the HEW strategy.

Under attack all year from Bill Clinton for lacking a domestic agenda, President Bush has suddenly moved to challenge the Democratic nominee on the core domestic social policies of health, education and welfare.

Over the past two weeks, Bush has alleged that Clinton’s proposals would reduce access to health care and swamp small business under new taxes, create a huge federal employment program for welfare recipients, and sell out the interests of students to the powerful teachers’ unions. Clinton and his aides have fired back, accusing Bush of misrepresenting the governor’s positions--and lacking detailed plans of his own.

These issues are still mostly in the shadows of arguments about taxes, the economy and foreign policy. But this HEW debate, as it accelerates, promises to be the vehicle for both candidates to make broader points about their opponent’s philosophy and motivation.

With these domestic issues, Bush is trying to paint Clinton as an advocate of expanding government by launching a new government health care plan, for example, or guaranteeing jobs to welfare recipients as part of his effort to wean them off the monthly check.

The aim goes beyond the merits of those individual ideas: Bush wants voters to question whether Clinton really represents a new breed of thinking or just traditional liberalism repackaged. For all his talk of new approaches, Clinton has displayed a “commitment to centralized bureaucracy,” maintains James P. Pinkerton, counselor to the Bush reelection campaign.

To reinforce that argument, Bush and his aides maintain that Clinton’s domestic policy agenda shows he is motivated not by a desire to pursue reform but to placate powerful party constituencies. As their prime example, they cite Clinton’s opposition to private-school choice--an idea bitterly resisted by the teachers’ unions.

In their responses, Clinton and his aides are also holding up these issues as evidence in a broader indictment. On health, education and welfare, they say, Bush is unwilling to do more than “tinker” around the edges of the nation’s problems. Bush, they charge, is trapped by what Clinton has termed a failed ideology that sees government action as inimical to economic progress.

“George Bush believes there is not much government can do about our problems, and he’s done everything he could to prove it,” said Bruce Reed, Clinton’s policy director.

At the same time, Clinton’s camp questions Bush’s motivation in promising domestic reforms. Noting that it took Bush more than two years to propose his education policy and more than three years to produce a health plan--the key portions of which still have not been translated into legislation--they say Bush’s interest in all of these domestic issues is shallow and likely to fade as soon as the election does.

Here’s a look at the debate between Bush and Clinton on these three critical areas of domestic policy.

HEALTH: Clinton has proposed a plan that would remake the health care system through a potentially costly extension of government authority, while Bush has advanced ideas that would minimize the expansion of government’s role and make more modest changes.

Bush initially showed little interest in health care. But after Democrat Harris Wofford unexpectedly won a Senate seat in Pennsylvania by stressing the issue in November, the White House quickly issued a proposal.

Bush’s plan would help the uninsured--almost 36 million people, about a sixth of the population under 65--buy health insurance by providing them with new tax breaks. Though the Administration still hasn’t drafted legislation implementing the idea, Bush has said he will propose a new tax credit to cover the full cost of insurance for families at or below the poverty level.

Then the credit would be gradually phased out as income rises; it would be unavailable to families earning more than about $16,700 a year. For uninsured middle-income families, the plan offers not a credit but a less-valuable tax deduction.

The plan attempts to control the rise in health care costs by reforming the insurance market, creating incentives for consumers to use health management organizations, or HMOs, streamlining health care administrative costs and revising malpractice laws to limit the damages patients could collect.

Critics have labeled Bush’s plan inadequate to meet both of its goals. One recent study by the Employee Benefit Research Institute concluded that the tax breaks would be large enough to allow only about half of the uninsured to afford coverage. Just as important, critics maintain the plan lacks serious efforts to control costs, which they say would require Bush to confront the insurance and health care industries more directly.

“If you give vouchers and you give tax deductions and it goes into the system we’ve got . . . you’re still going to have this mind-boggling bureaucratic mess that is the American system of health care finance,” Clinton said Tuesday in a speech rebutting Bush’s criticisms of his health proposals.

Clinton’s plan envisions a far more assertive government effort to provide universal coverage. Under his proposal, all employers would either have to insure their workers or buy into a new public insurance plan. All Americans without jobs would be covered by the public plan.

To control costs, Clinton would undertake insurance and administrative reforms similar to, though in some cases more aggressive, than Bush’s plan. He goes much further than Bush to establish binding national caps on health care spending.

Clinton proposes to create a national health standards board to set a target on how much the nation spends each year on health care. To enforce the targets, states would limit insurance companies’ annual premium increases; the insurance companies, which would be prevented from dumping patients or limiting coverage, would then have to bargain with doctors and hospitals to limit costs.

Over the past two weeks, Bush has repeatedly fired at Clinton’s plan. Most ominously, he has warned that Clinton’s proposal would “slap at least a 7% payroll tax on middle-income Americans.”

That’s almost universally considered misleading. But so is the Clinton campaign’s response that the plan won’t impose any new tax.

Taxes would rise under Clinton’s proposal but not across the board, as Bush suggests. Companies not currently providing insurance would spend more, either to buy insurance for their workers or pay what amounts to a new tax to buy into the government plan.

Experts say the 7% of payroll Bush cites is a reasonable estimate of the cost that those companies could face under Clinton’s proposal. Some independent analysts have also seconded Bush’s charge that such increased bills could cost jobs and sink some small businesses not now providing insurance, though Clinton said he would cushion the pain with transition assistance from government.

Contrary to Bush’s suggestion, though, the plan would impose no new taxes on companies currently insuring their workers. In fact, because of the plan’s cost-control provisions “employers that are now covering their employees would benefit tremendously from” Clinton’s plan, argues Rep. Henry A. Waxman (D-Los Angeles), one of Capitol Hill’s leading health care experts.

Bush has also charged that such cost-control efforts will lead to rationing of health care and long lines at hospitals. Clinton aides say costs can be controlled by squeezing out inefficiencies, and their proposal won’t result in any restrictions on care.

The truth, experts say, probably lies somewhere in between. Serious cost control will inevitably have to impose some limits--on access to the latest and most expensive technology, for example, says Jack Mayer, president of New Directions for Policy, a Washington think tank.

“There isn’t any way around that,” he said. “It’s a concern, but it just means that cost-control won’t come for free.”

EDUCATION: Bush and Clinton actually agree on several ideas, though Clinton typically says he would put more energy and money into implementing them.

Both men support establishing national standards in core subjects such as math, and the development of national tests to then measure student aptitude. Both have supported increased funding for Head Start, though Clinton says he would pump money into the program faster than Bush.

Beyond the question of how much they would spend, the key difference comes on the issue of school choice, which Bush has repeatedly highlighted in recent days.

Both men support plans to give parents greater freedom to choose which public schools their children attend. But Bush, unlike Clinton, also wants to give parents government vouchers they could use to help send their children to private schools.

Bush and his aides insist that allowing parents such choices would create new competition in education, forcing public schools to improve or face the loss of students. Clinton says the government can’t afford to put money into private schools when public schools are underfunded.

Deeper concerns run through both sides’ positions on this increasingly divisive issue. Republicans say Clinton opposes private-school choice because he doesn’t want to confront key elements of his constituency, particularly public school teachers, who are vehemently opposed to it. Democrats argue Bush and other Republicans are pushing the choice idea to encourage the middle class to desert the public schools--and leave behind a system increasingly poor, minority and politically vulnerable to budget cuts.

WELFARE: For most of the campaign year, Bush has been unable to create much distance between himself and his challenger on an issue that Republicans typically consider their own.

The central thrust of Bush’s welfare policy has been to encourage states to pursue experiments that use the threat of diminished benefits to change the behavior of welfare recipients. Bush has granted waivers from federal law allowing states to cut benefits to welfare mothers whose children don’t attend school regularly, or to deny additional benefits to women who have children while already on relief.

But Clinton, while saying he would not pursue some of those policies himself, has repeatedly said that as President he too would allow states to experiment.

And as part of his emphasis on “personal responsibility,” Clinton has taken a long step beyond Bush to say he would impose a two-year time limit on welfare, requiring all recipients at that point to either find a private-sector job or take public employment.

Speaking last week in New York, Bush attacked Clinton’s proposal, saying it amounted to “a guaranteed government job for every recipient.”

Bush added: “I ask, is this any way to promote responsibility? If we guarantee everyone a government job, how can we reward initiative?”

For some who follow welfare policy, that argument seemed, at best, incongruous. Traditionally, Republicans have argued that welfare recipients should be forced to work, and that what saps their initiative is sitting at home, collecting a check.

“It tells us Bush is really squirming here,” said Robert Greenstein, director of the Center on Budget and Policy Priorities, a liberal think tank. “He is trying to portray a government job as a form of dependency. Most people would not view working for your pay as a form of dependency.”

What makes Bush’s argument even stranger is that the White House’s recently released package of welfare reforms includes proposals to encourage states to move more welfare recipients into public jobs under workfare programs.

Even so, welfare experts say two key questions remained unanswered about Clinton’s proposal: Does he really mean to enforce a tough time limit, and if he does, how will he pay for it?

If Clinton is serious about imposing a time limit, and welfare recipients can’t find work in the private economy--many analysts say they are the least likely to be hired in a period of high unemployment--offering them all government jobs might cost between $25 billion and $35 billion.

On the other hand, some experts say it isn’t yet clear Clinton really means to enforce a rigorous time limit. He hasn’t offered details on what exemptions might allow recipients to stay on the rolls for more than two years, but conservative analysts fear there would be many.

Depending on how he implements it, Clinton’s proposal could be “tantamount to abolishing welfare as we know it” or just “a token program . . . that won’t change the situation for the bulk of the caseload,” said New York University political scientist Lawrence M. Mead, the author of several books on welfare reform.

Comparing Their Plans

Here’s a look at some of the key policy proposals from President Bush and Bill Clinton on the core domestic issues of health, education and welfare:

HEALTH

Bush: would expand access by providing new tax breaks to help uninsured Americans buy health insurance;

* would control costs by administrative and insurance reforms, and changes in malpractice awards to cap the damages patients could receive when suing their doctors.

Clinton: would expand access by requiring all employers to insure their workers or buy into a government health plan;

* all Americans without jobs would be covered by the government plan; would control costs through administrative and insurance reforms, and the creation of a new board that would set binding national caps on health care spending.

EDUCATION

Bush: backs the development of a voluntary national testing system to measure student aptitude in core subjects such as math;

* has substantially increased funding on Head Start and proposed spending $535 million to help local communities develop “break the mold” schools;

* supports both public school choice, and government vouchers that would help parents send their children to private schools.

Clinton: backs the development of a voluntary national testing system to measure student aptitude in core subjects such as math;

* promises to fully fund Head Start, which still lacks sufficient resources to serve all eligible children, and create a nationwide network of alternative learning centers for high school drop outs;

* supports public school choice, but opposes using government money to help parents send children to private schools.

WELFARE

Bush: has encouraged states to pursue reforms that attempt to shape the behavior of welfare recipients by denying additional benefits, for example, to women who have additional children while already on relief;

* has recently proposed a series of federal reforms making it easier for states to move welfare recipients into workfare jobs, but opposes Clinton’s call for mandatory work after two years on the rolls.

Clinton: though critical of some state-level reforms, said he will allow states to experiments with efforts to shape the behavior of welfare recipients by cutting off benefits;

* would impose a two-year time limit on welfare, forcing recipients at that point to either find work, or take a public service job.