‘Demagogues’ Could Be ’96 Problem, Reich Says : Politics: Labor secretary maintains that polarizing issues are ‘one question mark’ hanging over contest. GOP budget will give voters clear choice, he notes.

Labor Secretary Robert B. Reich said Tuesday that the Clinton Administration’s prospects in the 1996 election are clouded by the efforts of “demagogues” trying to convince average Americans that immigration, welfare, big government, affirmative action and free trade are to blame for their stagnating incomes.

Reich said the impact of those polarizing issues, fanned by politicians, is “the one question mark hanging over 1996. . . . I worry about that.” He didn’t mention any politicians by name.

In comments at a breakfast meeting with Los Angeles Times reporters and editors, Reich said that another non-economic issue, gun control, was a key in explaining last year’s midterm-election rout of Democrats. Reich said the efforts of the “very, very powerful” National Rifle Assn. were particularly important in Pennsylvania, Ohio, Michigan and Wisconsin.

President Clinton has taken on the NRA in recent weeks over its criticism of federal law enforcement agents.

Reich said the most important question to voters in the coming election would be: “How are you going to reverse the decline of real wages and improve benefits?”

He asserted that with the Republican budget proposals now on the table, voters will have a clear choice, giving an advantage to the Administration.

But his discussion of the Administration’s efforts for workers underscored the direct threat to the President’s legislative legacy that is posed by the Republicans’ budget plans.

He identified pension security, health care, the earned-income tax credit, the minimum wage, education and job training as issues of “critical importance” to Americans.

The Republican proposals would sharply cut back the Administration’s education and job-training programs and the earned-income tax credit, which is a tax break for the working poor. Republicans have blocked Clinton’s push for an increase in the minimum wage, and last year shot down his health care reform plan.

Asked about budget strategy, Reich said the Administration plans to “do everything we can to smoke the Republicans out.” Officials would try to force Republicans to acknowledge, he said, that the GOP budget proposals hurt the poor, elderly and middle class while doing nothing to raise average workers’ incomes.

Reich’s comments came on a day when the Administration outlined a new policy to alter the Labor Department’s Occupational Safety and Health Administration in hopes of shielding it from a 50% budget cut proposed by the Republicans. Business regularly attacks the Richard Nixon-era agency for heavy-handed implementation of burdensome rules.

The proposal, part of the Administration’s “reinventing government” initiative, calls for a new incentive system that will reward inspectors who improve safety and health, rather than those who simply levy fines.

It would encourage the formation of worker-management task forces that would try to eliminate health and safety risks.

Appearing at a Washington sheet metal factory Tuesday to dramatize the program, Clinton said the Republicans “are not trying to reform the system of worker protection, as we are, but instead to dismantle it, and therefore to destroy our ability to pursue our fundamental purpose.”

“They don’t want rigorous reform; looks like they want rigor mortis,” Clinton said.

The plan has attracted criticism from some in business, who view it as an ineffective publicity gesture, and from some labor officials, who fear it is a compromise to palliate business critics.