COLUMN ONE : Bentsen: A Preview of the Future? : He’s been called ‘loophole Lloyd’ for his support of tax breaks for individuals, corporations. His selection sheds light on how Clinton is likely to operate.

The last time the major political parties swapped control of the White House, Sen. Lloyd Bentsen (D-Tex.) was second to none at riding the crest of Reaganomics.

During Ronald Reagan’s first year in the White House, Bentsen helped lead the congressional charge to expand the new President’s sweeping tax-cut proposals. He pushed for bigger business tax reductions than even Reagan had contemplated, including steep write-offs for real estate investments. While he was never a dyed-in-the-wool supply-sider, Bentsen shared Reagan’s view that Americans--especially American corporations--were overtaxed.

Eventually, Bentsen acknowledged that his proposals would add too much to the deficit and agreed to scale them back. But even the smaller package of tax breaks that he helped enact proved to be a budget-buster, ranking among the leading contributors to the massive deficits of the Reagan-Bush era.

Now, the Democrats have recaptured the White House--in large part by running against the legacy of Reaganomics and promising fundamental economic change. And the man President-elect Bill Clinton has chosen to be his Treasury secretary and de facto leader of the effort to undo what he sees as the crippling residue of 12 years of Republican rule is Lloyd Millard Bentsen.

Bentsen’s selection sheds a revealing light on how Clinton, the apostle of fundamental change in the nation’s economic system, is likely to operate.

First, a self-styled new kind of Democrat, Clinton sees no inconsistency between using government as an instrument of economic and social change, on the one hand, and courting American business on the other. Indeed, in Clinton’s view, it is only if business leaders alter their behavior to fit his plans that effective reforms can be achieved. And, while insisting that poor and middle-class Americans should get better treatment, he is quite prepared to use the tax code as a carrot for business.

Second, despite Clinton’s trumpet calls for change during the presidential campaign that sounded almost revolutionary, he is at heart a gradualist. As his record in dealing with the Arkansas Legislature and the state’s business and financial community makes clear, he is not likely to seek confrontation. He will not try to turn the nation around on a dime.

That makes Bentsen a natural for the Clinton team.

Bentsen is above all a product of the business world: a man who inherited a fortune in South Texas real estate, made another fortune in business on his own and who often stands up for business interests in Congress.

As chairman of the Senate Finance Committee, Bentsen--once dubbed “loophole Lloyd” by critics of his tax proposals--is known as an ardent supporter of special tax breaks for real estate, oil and gas producers and an array of other industries.

In fact, one of his biggest public embarrassments in the Senate came in 1987, when it was revealed that he had invited special interest lobbyists to join a club whose main function was to have regular breakfast meetings with Lloyd Bentsen--for a $10,000 fee. While he disbanded his breakfast club as soon as it became controversial, he continues to be one of Capitol Hill’s leading recipients of campaign contributions from political action committees.

At the least, by choosing Bentsen, Clinton seems to be turning his back on what progressives considered one of the Democratic Party’s most important ideas in the late 1980s--reform of the nation’s Byzantine tax system to close loopholes and eliminate tax breaks of all kinds. The reform movement that led to the ambitious overhaul of the U.S. tax code six years ago has largely collapsed and advocates of using government tax breaks to influence business decisions may once more receive favorable consideration.

With Bentsen, Clinton has turned to one of the leading proponents on Capitol Hill of using the tax system to achieve specific social and economic objectives--a philosophy that has led Bentsen to advocate a dizzying array of special tax breaks for individuals and corporations, ranging from a revival of individual retirement accounts for affluent taxpayers to capital gains tax rate reductions for investors.

In fact, his support for a capital gains tax cut--the long-cherished goal of the Bush Administration--often leads his critics to see Bentsen as a Republican in disguise.

It is also true, however, that Bentsen has avoided becoming a captive of any particular industry and has an independent streak that makes him unpredictable. He is, at heart, a partisan Democrat as well; earlier this year, he supported a Democratic tax bill that included a higher income tax rate on the wealthy to help pay for a capital gains tax cut and other business tax breaks.

He is such a mixed bag politically on economic and non-economic issues that liberal and conservative groups usually rate his voting record at about 50% positive and 50% negative.

“If you can find someone in the oil and gas industry, or any other industry, who says Bentsen always took care of what he wanted, then you’re talking to someone who I don’t know,” says John Camp, a Washington attorney and lobbyist.

Those who liken him to a George Bush Republican also forget that Bentsen once beat Bush in a bitter Texas Senate race by convincing voters that Bush was a right-winger. And early in his career, as a member of the House, Bentsen came out against the poll tax that kept blacks out of the voting booth--a bold, progressive stand for a Texas politician in the years just after World War II.

Still, Bentsen’s natural inclination usually brings him down on the side of business when it comes to legislative policy. It was no accident that in 1981 Bentsen piggybacked breaks for business onto the biggest change in personal income tax rates of the past generation.

“The one string that runs through his approach to economic policy is that he always brings a businessman’s approach,” said Robert Lighthizer, a Washington tax lawyer and a former Senate staff member.

Bentsen’s appointment as Treasury secretary already has disappointed liberal Democrats, who believe that fundamental change is unlikely if the new Administration is too close to business.

“Bentsen was an architect of the policies that Clinton decried in the campaign, policies that led to a shift in the tax burden away from the wealthy and corporations. Bentsen will have to change, unless, of course, Bill Clinton is not planning to adhere to the policies he espoused in the campaign,” declared one Washington tax expert, who asked not to be named.

Conversely, Bentsen’s rise has led to quiet relief among business leaders and lobbyists in Washington, who had worried that economic policy under Clinton might be dominated by liberal policy analysts like Robert B. Reich, a lecturer at Harvard’s Kennedy School of Government who has been Clinton’s chief adviser and most visible spokesman on economic matters during the transition.

John C. White, former chairman of the Democratic National Committee and a longtime Bentsen political friend in Texas, said: “The message is steady, responsible. . . . There won’t be anything goofy.”

Clearly, the personnel announcements made by Clinton Thursday were designed to send reassuring signals to the financial markets and to the business community.

And it is the 71-year-old Bentsen who dominates, a point that Clinton made clear Thursday. When asked who would take the lead on economic policy--Bentsen at Treasury or Rubin at Clinton’s new White House National Economic Council--Clinton said that it would be Bentsen.

“I think it is quite clear,” Clinton said. “First of all, the secretary of the Treasury will continue to be the principal economic spokesperson after the President for this Administration, just as traditionally occurred. . . . The Treasury will still be the place where the President’s economic views are spoken for after the President does it.”

Bentsen began to influence Clinton’s thinking on critical issues even during the later stages of the presidential campaign--long before his appointment was a sure thing. A free trader like many other border state politicians, Bentsen persuaded Clinton to conditionally endorse the North American Free Trade Agreement and thus reject the advice of House Majority Leader Richard A. Gephardt (D-Mo.), who urged Clinton to call for the trade pact’s renegotiation.

And he is likely to be equally successful in dominating the new economic team, at least on the working level.

His congressional experience dates back to the 1940s, when his mentor was House Speaker Sam Rayburn. His years as Senate Finance Committee chairman give him total command of the intricacies of tax and trade legislation. As a result, he has a level of influence on Capitol Hill unmatched in the Clinton camp. Moreover, his business background gives him a pipeline into the corporate world, where he is wildly popular with chief executives. And his experience as Michael S. Dukakis’ running mate, hailed by many as the best thing about the Democratic campaign of 1988, gives him national political standing independent of his role in the Clinton White House.

Already, Bentsen seems confident enough of his position that he has made it clear he will not give in to liberal pressure a second time and resign from exclusive private clubs that he quit during the 1988 presidential campaign--and which he quietly rejoined when the dust had settled in 1989.

Yet it is his austere, dominant personality which seems likely to ensure that Bentsen emerges as the new Administration’s preeminent economic policy-maker.

Unlike Nicholas F. Brady, his predecessor, he has strong views on policy matters and he is unwilling to entertain ideas that he considers frivolous. Where Brady exuded a soft, preppy collegiality and an old money aversion to personal conflict, Bentsen displays a more steely aristocratic bearing that says he is used to getting his way.

He is not a good loser.

“Bentsen has a history of being first among equals and Clinton must have thought about that,” said Gary Bass, director of OMB Watch, a Washington research group that tracks economic and budget issues.

Those who know Bentsen well warn that if Clinton’s younger, more liberal advisers think he can be used simply as a courtly front-man to sell Clinton’s policies to Congress, they don’t understand Lloyd Bentsen.

“Lloyd can work with anybody. He is very collegial. But I’m sure he has gotten some assurances that he will be at the head of the economic team,” said one Bentsen friend. “You don’t ask for that directly but he would know how to do it.”

Bentsen’s tough personality and his business orientation stem directly from his roots as the son of a self-made, hard-driving rancher and land developer in the Rio Grande Valley in South Texas.

Bentsen was born in 1921, just after his father, Lloyd Sr., moved to the Rio Grande from the farmlands of South Dakota. Soon, his father had scraped together enough money to get into the land development business: He bought cheap land and resold it to would-be ranchers from the Midwest.

His sales tactics later were called into question, but Lloyd Sr. built an empire and Lloyd Bentsen Jr. grew into the role of the son of a South Texas grandee.

A bomber pilot in World War II who was elected to Congress in the same post-war class that brought John F. Kennedy to Washington, Bentsen quickly tired of his role as a junior member of the House. And so against Rayburn’s wishes, he left the House in 1955 and his family bankrolled his entry into the business world.

Ultimately, he diversified his Houston life insurance company into other financial services and turned his family stake into a fortune of his own.

But by 1970, Bentsen was restless again, and successfully challenged the incumbent Ralph Yarborough for the Senate, then defeated George Bush in the general election.

With his seat secure, Bentsen ran a forgettable campaign for President in 1976. Afterward, he immersed himself in the world of tax and economic policy. First as chairman of the Joint Economic Committee and then as chairman of the more powerful Senate Finance Committee, Bentsen became a leading proponent of the need for the federal government to provide greater incentives for businesses and individuals to save and invest, which he argued are the key ingredients needed to improve America’s long-term productivity.

Yet, however he approaches economic policy at Treasury, Bentsen clearly will bring an elder statesman’s reserve and elegance to an Administration dominated by casual baby boomers little more than half his age.