NEWS ANALYSIS : Centrist Revolt Imperils White House Agenda : Congress: Competing proposals challenge the President for control of key issues such as health care and trimming back the federal budget.

Bipartisan efforts to build a new centrist coalition in Congress are presenting the White House with an unexpected challenge to its control over the legislative agenda on the core domestic issues of health care and the federal budget.

The latest revolt from the center came Wednesday, when a bipartisan group of senators led by Sen. Bob Kerrey (D-Neb.) released a deficit reduction plan that would slash spending far more deeply than the second round of cuts Clinton recently proposed.

“The mood has changed,” said Sen. Joseph I. Lieberman (D-Conn.), part of a group of six senators who worked most closely to design the proposal. “I don’t kid myself but I think . . . building a ‘center-out’ coalition of a majority of Republicans and a solid chunk of Democrats . . . we’re in range of 51 votes.”

The Senate initiative is modeled on a bipartisan deficit reduction plan in the House fashioned by Reps. Timothy J. Penny (D-Minn.) and John R. Kasich (R-Ohio) that seeks to cut spending by an additional $103 billion over the next five years. That plan is expected to come to a vote Nov. 19, and House Democratic leaders who oppose the measure fear that it may do surprisingly well--especially in the wake of three major defeats for Democrats in elections last week.

A parallel insurrection has coalesced on health care. Bipartisan groups in both houses are advancing a health care reform plan that repudiates several pillars of Clinton’s proposal, including the mandate on employees to insure their workers and a cap on health insurance premiums.

In a third challenge to Clinton, a similar center-right coalition, though with tendrils that extend into the left of the Democratic Party, is pushing a balanced-budget constitutional amendment, which the White House staunchly opposes.

Though the emerging moderate-to-conservative bloc has yet to prove that it can mobilize enough votes to pass its own initiatives, it represents potentially pivotal support that could significantly shape health care reform and future efforts to deal with the deficit. At the same time, its rejection of some of Clinton’s central initiatives creates uncomfortable political problems for a President who frequently has declared his own intention to build a new coalition in the political center.

“The President can preempt this if he starts closer to the center,” Penny said. “But on every issue the President has chosen to go to the left and try to pull the center in. He is going to be stumbling throughout his entire presidency if he continues to try to build from the left.”

The emergence of the bipartisan health and budget plans underscores the fragility of Clinton’s legislative and political coalition: The White House is fighting these proposals at the same time that it is depending on many of the centrists pushing them to help pass the North American Free Trade Agreement over the determined opposition of the Democratic left.

“What that says is there is no stable coalition for Clinton,” says Sam Popkin, a UC San Diego political scientist who advised Clinton’s campaign.

How much of all this is a serious urge for new direction--and how much an old form of posturing--remains open to debate. Some in the White House see the driving force behind all of these initiatives as a desire among legislators to demonstrate a Ross Perot-like independence from both parties, without much consideration of the practical consequences. Their suspicions are inflamed by the sudden emergence of the balanced-budget initiative as a viable legislative proposal at a time when few analysts consider it a plausible option.

But at least the parallel bipartisan deficit reduction and health care initiatives seem rooted in a genuine frustration among many Democratic moderates and some Republicans about Clinton’s general direction. The common philosophical thread in these proposals is “a healthy skepticism about the role of government,” said Rep. Dave McCurdy (D-Okla.), who has endorsed both of them.

The sprouting of these initiatives is placing the White House in an awkward position. On one hand, many Clinton advisers long have believed that the key to his legislative success--and long-term political survival--is to build just such center-out coalitions, as he has done recently on relatively less controversial issues like national service and education reform.

“This is Clinton’s great opportunity to seize the radical center of American politics and bring it into his party,” says Al From, president of the Democratic Leadership Council.

But the White House has concluded that these three visions of the center each tilt too far to the right. It dismisses the balanced-budget amendment as a political ploy and is sharply critical of the Penny-Kasich budget plan and an alternative health care plan sponsored by Reps. Jim Cooper (D-Tenn.) and Fred Grandy (R-Iowa).

Over the next five years, the Penny-Kasich plan aims to cut discretionary spending by $26 billion, reduce entitlement programs by $50 billion and save another $27 billion by writing into law the 252,000 reduction in the federal work force that the Administration is already seeking.

The Senate group announced an even larger deficit reduction package that proposes spending cuts of $109 billion over the next five years--roughly a third from mandatory spending, particularly Medicare cost-of-living increases, a third from administrative costs and a third from discretionary spending.

Administration officials argue that the Penny-Kasich plan would endanger health care reform by targeting for deficit reduction Medicare cuts the Administration hoped to use to fund its expansion of coverage. Moreover, they say a new round of substantial budget cuts could endanger the fragile economic recovery. And they maintain that the plan--by further reducing the caps on discretionary spending approved in last summer’s budget vote--would eviscerate Clinton’s already scaled-back agenda for public investment.

The Penny-Kasich cuts “could be bad for economic growth and harmful for investments, like defense conversion, that parts of this country need desperately,” said Gene Sperling, deputy director of the White House’s National Economic Council.

On the health care side, First Lady Hillary Rodham Clinton and other White House officials have denounced the centrists’ plan introduced by Cooper and Grandy. That plan would reform the insurance market by creating regional purchasing cooperatives and provide government subsidies to help low-income people buy insurance. But it would not guarantee universal coverage.

Administration officials seem to harbor a special animus toward Cooper. Although Sen. John B. Breaux (D-La.) has introduced an identical plan, officials said they are less optimistic about striking a compromise with Cooper than with the senator.

But the congressman said the Administration already has begun talks with him and his allies. “We think we are the ultimate compromise,” he said.

That is a prospect that some Republican leaders find almost as unnerving as the White House. In the inverse of the White House fears, some key Republican aides worry that Cooper will eventually strike a deal with the Administration and lead several dozen Republicans into Clinton’s camp.

Meanwhile, some House Democratic liberals fear that the White House and the House leadership--preoccupied by the battle over the trade agreement--have not mounted strong enough efforts to derail the Penny-Kasich budget proposal. “I don’t think people understand this is a really consequential vote,” Rep. Henry A. Waxman (D-Los Angeles) said. If Penny-Kasich passes, “the President might as well start concentrating on foreign policy because there won’t be much he can do about domestic policy.”

Inducing such anxiety on both sides of the aisles, these fragile bipartisan alliances may become the legislative equivalent of Perot’s electoral vote: a wild card that creates a new dimension of insecurity for Democrats and Republicans alike.