Fund for Retraining Workers Proposed : Economy: White House suggests using savings from government streamlining. Plan would help those losing jobs under free trade agreement.

With the free trade pact with Mexico and Canada running into new congressional roadblocks, the White House suggested Sunday that savings from its plan to streamline government could be used to help retrain workers whose jobs are lost through the trade agreement.

“I think the money is available there through a variety of things. . . . That’s not smoke and mirrors,” said President Clinton’s counselor, David Gergen.

But five days after Clinton signed supplemental agreements to ease concerns that the North American Free Trade Agreement would weaken workers’ rights and allow companies to damage the environment, the push for House and Senate approval encountered new problems.

Sen. Daniel Patrick Moynihan (D-N.Y.), influential chairman of the Senate Finance Committee, refused to offer his support in a television interview. And congressional sources made it clear that House Majority Leader Richard A. Gephardt (D-Mo.) would continue playing hard to get.

Gephardt, whose statement of opposition to the pact in August was seen as a less-than-final decision, is expected to spell out as early as today what the White House must do to gain his backing. His role in the House leadership, and particularly his expertise on trade issues, could swing a large number of undecided House Democrats.

The supplemental agreements, negotiated during the spring and summer, are not likely to be redrawn, but the Administration can seek new funding for worker retraining and for environmental programs in the legislation that Congress must approve to implement the free trade agreement.

The agreement is intended to boost commerce among the United States, Mexico and Canada by removing tariffs and other obstacles to trade over a 15-year period.

Responding to skepticism about the availability of money to pay for retraining and environmental programs, Gergen said on NBC-TV’s “Meet the Press”: “This is a government that spends $1 1/2 trillion a year. Don’t tell me we can’t find $5 billion or $6 billion or whatever the number’s going to be over five years to help the workers of this country. We can do that.”

Gergen, who as a senior official in Ronald Reagan’s White House oversaw efforts to gain support for large tax and spending cuts, held out the possibility that some of the money for retraining would come from savings in the Administration’s proposals to trim the federal bureaucracy.

The vote on the trade pact is likely to occur by the end of December, and votes on the government reorganization plan may not take place until sometime next year.

Clinton has estimated that the program, which he calls “reinventing government,” could save $108 billion over five years. But critics have said that such a figure is speculative and is based on legislative programs that will not necessarily be enacted.

On the NBC program, Moynihan--long seen as an ally of organized labor, which has vehemently opposed the trade pact--said the trade pact’s supplemental agreements had not adequately protected the rights of workers.

“The Mexican government is an authoritarian government. They don’t have an independent judiciary, they don’t have free elections, they have lots of laws which they enforce very selectively,” he said.

“I don’t think that the side agreements have addressed it, particularly not in the case of labor.”

Moynihan, however, said specific proposals to pay for worker retraining might be persuasive.

“When that legislation comes to us with the revenues to pay for it, then we . . . have a different playing field,” he said.

The fight over the free trade agreement has brought together unusual political coalitions--among them the teaming up Saturday of Sen. Donald R. Riegle, a liberal Democrat from Michigan, and 1992 independent presidential candidate Ross Perot.

The two spoke in Lansing, Mich., to an anti-NAFTA rally made up largely of the sort of union-member Democrats who boosted Clinton’s presidential campaign.

Riegle has said that any Democrat who supports the agreement should be voted out of office, but Clinton is nevertheless planning to attend a Riegle reelection campaign fund-raiser next month.

“We’re in an age of floating coalitions,” Gergen said.