BEYOND REPAIR? BUSH LOOKS TO THE CONVENTION FOR POLITICAL SALVATION : Three Chances to Win

Viewers tuning in to the Republican Convention this week may rub their eyes and wonder if they are watching the other party. With the reversal of fortunes in recent months, Republicans now look like Democrats used to--fractious, frazzled and a tad forlorn. Heading into Houston, the GOP is desperately looking for the keys that will let George Bush out of the basement and back into the fight with Bill Clinton. So far, the Republicans think they have three answers to their problems--but are arguing over two others that may be more important. Unless they can agree soon, the campaign may be doomed.

For veterans of past races, 1992 is beginning to smell like 1976. That year Gerald R. Ford found himself 27 points behind Jimmy Carter after the Democratic Convention. James A. Baker III came riding to the rescue as campaign manager and Ford staged a dramatic comeback. The only problem: Ford still lost. Even worse for the GOP, Bush may have a far tougher time making up his 25-point deficit than Ford did: Voters think of him much more negatively and he is facing a more professional, harder-hitting team than Carter put on the field.

So, what can turn things around for Bush? The three key points Republicans have agreed on so far:

Baker’s Return: White House aides now acknowledge that the past nine months of leadership under chief of staff Samuel K. Skinner have been a political disaster. Skinner had a solid record when he was selected to run the White House, but he soon proved to be completely miscast, uncertain what to do. Figuring out a response to the Los Angeles riots was said to be especially traumatic. As chaos set in, Skinner seemed to be intimidated by Bush and to lose his self-confidence. Gradually, the rest of the staff lost its confidence, too, and morale sank to rock bottom.

Baker has a storied reputation within GOP ranks, and it has been fortified by private GOP polls showing him towering above other Bush appointees in public approval. Bush’s announcement that Baker was on his way brought tears of relief to some junior White House staffers.

In effect, Baker will be deputy-President, for Bush will be sharing an unprecedented amount of power with him. Not only is Baker to run the campaign and oversee day-to-day operations, but Bush has asked him to craft a policy agenda for the second term, negotiate with Congress, serve as chief spokesman and run foreign policy with his left hand.

Neither man wanted the switch. Baker has spent recent years escaping his reputation as a “pol.” His emotional State Department farewell, so uncharacteristic, showed how anguished he is. It must have been especially galling when Clinton called him one of the GOP’s best handlers. Bush doesn’t want Baker around for an obvious reason: the appearance that he can’t do it on his own. But in the end, both accepted the inevitability of the change.

Bush’s Revival: For months, Bush has advised aides not to worry, that his “political clock” told him he shouldn’t start campaigning until the convention. They weren’t sure whether to believe him, but when he also said Ross Perot would never run--and he was right--they decided he must be right about this, too. Now, even Bush admits he was wrong about his timing and that he has given the Democrats too much slack.

A few weeks ago, say aides, Bush began to focus on politics and they think his campaign rust is wearing off. Campaign advisers say Bush is beginning to connect with audiences and, as a result, his own juices are flowing. It’s an article of faith in the Bush camp that once he returns to form, Bush is a better campaigner than Clinton and will close the gap between them. That remains to be seen. It’s true that Bush has long been underestimated as a politician, but it’s also true that Clinton is far more skillful on the stump than Republicans yet appreciate.

Clinton’s Unmasking: Democratic candidate Bob Kerrey said early this year that, if Clinton got the nomination, Republicans would open him up like a peanut. That is just what GOP leaders hope to do in Houston, vowing they will “peel” him open in front of the nation. “He has been receiving the benefit of the doubt so far,” a top Bush adviser says. “We now have to remove that benefit, so that we’re on an even playing field.”

Clinton’s areas of vulnerability, his opponents believe, are his economic proposals and his record as governor. Republicans all over Washington have been doing computer runs on Clinton’s economic plan, and they think they have a good case that he would destroy hundreds of thousands of jobs with higher taxes and stiffer business regulation. As for Arkansas, they say, why should the country elect someone who has taken a state from 49th to 48th, or is it 50th to 47th? In essence, Republicans would like to borrow a page from the winning strategy of Britain’s Conservative Party: Admit things aren’t going well, but scare voters into believing they could get a lot worse.

Once again, Republicans may be overestimating their chances of success. In recent weeks, GOP attacks have been so heavy-handed that many have backfired. The test of how well the GOP will do on Clintonomics will come Tuesday night, when Texas Sen. Phil Gramm delivers the keynote address. Gramm has been honing his attack for a couple of weeks and is one of the party’s most potent weapons.

Even if the GOP succeeds in whittling Clinton down to more manageable size, however, most agree a negative campaign won’t be enough to reelect Bush. The arrival of Baker and more effective campaign speeches won’t do it, either. Ultimately, Bush must convince the electorate his second term will be better.

Trying to do that has resulted in some difficult intraparty disputes on the eve of the convention. The most immediate is what Bush ought to propose in his speech to spur economic growth in the next four years. Led by Jack F. Kemp and retiring Rep. Vin Weber of Minnesota, conservatives are pushing the President to embrace a major new round of tax cuts. Bush advisers would like to please the conservatives--Bush is so weak that they are desperate to hold onto their political base--but they worry that new tax cuts would only worsen the deficit. Treasury Secretary Nicholas F. Brady is opposed to any increases in the deficit, as is Skinner; on Capitol Hill, Gramm is one of several conservative senators who also think deficit reduction must be the first priority, not tax cuts.

An alternative proposed by a number of adherents inside the Administration is to seek tax reforms. Several Bush advisers would like to scrap the income-tax system in favor of a progressive, consumption-based tax system, convinced that is the best way to increase savings and investment. But they fret that after the 1986 debacle over tax reform, it would not be politically wise to propose a tax overhaul two months before the election.

But if they can’t cut taxes and they can’t overhaul the tax system, what can they do? Not much. That’s a problem, because the absence of a bold economic agenda could cost them the election. That’s why some of Bush’s closest aides are now worried that public expectations about Bush’s acceptance address far exceed what they may deliver. Unless they resolve their disputes, the Thursday night address could be the thud of the year.

The other, unresolved issue is Baker’s future. His State Department confidantes, aware of how little enthusiasm he has shown toward his new job, say if Bush wins, Baker wants to return to his diplomatic post as soon as he can. He will pull together an agenda for Bush, assemble a team and get the hell out of the White House--as one associate puts it.

But others close to Bush say that within a few weeks it will become apparent that Baker must be designated the “domestic czar” of the second term. They think the only way Bush can convince voters he is serious about domestic reforms in the next four years--and that something will get done--is to promise in advance that he will put his “A team” on the job. In effect, they want Bush to say: “For the past four years, Jim Baker and I have changed the world; vote for me and over the next four years, Jim and I will change the country.” If Bush wants Baker to stay at the White House, he may have a tough selling job--almost as tough as the one he now faces with voters.