Clinton Casts Lobbyists in Villain Role : Politics: The President turns his glare from GOP to special interests. It’s the ‘middlemen’ that are grabbing their futures, he tells Illinois students.

President Clinton ratcheted up his attack on Washington lobbyists Tuesday as he bid to reclaim the populist mantle of his presidential campaign, telling an audience of high school students that “it is your future on the line” in the battles over his legislative program.

As exhibit No. 1, Clinton warned the students that his plan “to provide more students loans at a more affordable rate so that more people can go to college and stay” is threatened by lobbyists for “middlemen” seeking to protect “excess profits” at the expense of ordinary citizens.

That sort of rhetoric, which has suffused Clinton’s Midwestern trip over the last two days, reflects a new White House strategy for treating what aides believe is the Administration’s most serious current problem: growing public doubts about whether Clinton will be able to break through Washington gridlock to bring the changes he promised in his campaign.

Part of Clinton’s strategy is to urge patience. “Some of this stuff is really hard,” he said when a student asked him about “lack of progress in our government.”

“I’m not prepared to say, at the moment anyway, that we’ve lost the battle to gridlock,” he said. People should not “put too much faith in just the day-to-day development of the news,” he added. “You have to take a long-term view.”

But the other key element of the strategy is to recast the drama of “Clinton the outsider” battling the Washington Establishment, which his campaign tried so hard to develop.

Any good drama requires a protagonist and an antagonist. Earlier this spring, Clinton tried to set up congressional Republicans as his antagonists. But when the Republicans forcefully reminded the President and his aides that their 43 votes in the Senate give them the power to filibuster--and thereby kill--almost any of Clinton’s legislative proposals, White House aides realized that approach would not work.

So Clinton’s new approach is to portray himself as a figure appealing to both sides to “lay down their partisan armor” and “keep pushing the ball forward,” as he told the students. “The worst thing we can do is stay in paralysis. Let’s do something,” he said.

“The overriding goal is to get something done,” White House Communications Director George Stephanopoulos said. “You have to work with the Republicans and beat the special interests.”

But still, the drama needs an antagonist. Enter the lobbyists.

No sooner had he introduced his student loan plan, Clinton said, than Congress was “deluged with lobbyists” representing interests who are “all making good money out of the present system.”

Under the current system, “the lenders do well, but the people who need to borrow the money for a college education are hurt,” and “the taxpayers get hit coming and going,” he said.

Clinton trained particular fire on a little-known entity: the Student Loan Marketing Assn., a private corporation that the government set up two decades ago to expand the market for loans. Sallie Mae, as the corporation is commonly called, is “the biggest middleman” in the system and has “hired seven of the most powerful lobbyists in Washington” to protect its profits, Clinton charged.

Actually, not all the lobbyists Clinton had in mind actually work for Sallie Mae. Some work for other associations that do business with the giant corporation. And some of Sallie Mae’s lobbyists have close ties to the White House.

Anne Wexler, for example--an old friend of Clinton’s, whose partners include Betsey Wright, the President’s former gubernatorial chief of staff--has been hired by Sallie Mae to fight the President’s student loan plans, said Sen. Paul Simon (D-Ill.), whose office supplied Clinton with its list of lobbyists.

Nonetheless, the battle is real. Under the current student loan program, banks will provide an estimated $15 billion in government-guaranteed loans to students and parents this year. The government guarantees make the loans low-risk and profitable for the banks.

Clinton would change the program to one of direct government loans. The Administration maintains that its plan would save money by removing the middlemen and reducing defaults by making repayments contingent on income and by using the Internal Revenue Service for enforcement when necessary.

Critics, including Sallie Mae and many banks, argue, however, that the switch could end up costing the government more money and could smother the Department of Education and individual colleges, universities and trade schools with new responsibilities and red tape.

Times staff writer Elizabeth Shogren in Washington contributed to this story.