POLITICS : N.H. Governor Finds It Pays to Choose Friends--and Foes--With Care : Steve Merrill’s backing of Dole was rewarded with offer to head GOP hopeful’s campaign.

Gov. Steve Merrill, delivering his annual State of the State message recently, twice ridiculed the pro-tax positions of the minuscule Democratic minority in the New Hampshire Legislature.

“Liberalism dies hard,” he said early in his 45-minute address. He repeated the phrase later for emphasis.

Liberalism was never really alive in New Hampshire, and the governor knows this. But it does provide a useful foil for Merrill, who has made a thriving career of erecting unpopular straw men and then demolishing them to the public’s delight.

He has been rewarded with a crushing reelection victory in 1994--he won 70% of the vote--and with approval ratings consistently above 60% since then.

Whether it was the crowd pushing a state income tax (New Hampshire has none) or the rates charged by electric utilities or--worst of all--a federal government he sees as meddlesome, Merrill has chosen his enemies carefully.

He is also meticulous about choosing his friends, as he demonstrated before ultimately deciding to back Senate Majority Leader Bob Dole in the Republican presidential race.

More than a year ago, would-be candidates for the nomination began seeking audiences with Merrill, knowing that the endorsement of the immensely popular governor would give their candidacies instant credibility in the state with a first-in-the-nation primary.

Signed copies of books by the politicians began arriving in the mail. Former Tennessee Gov. Lamar Alexander sent his account of taking six months off with his family in Australia. Indiana Sen. Richard G. Lugar’s book on foreign policy came in, then former Education Secretary William J. Bennett sent a copy of his best-selling “Book of Virtues,” inscribed on the flyleaf with the message: “We admire you.”

“I’m still puzzling over who the ‘we’ is,” the balding but still-boyish Merrill said, laughing during an interview in his sunny corner office in the state Capitol.

If they weren’t building his library, the politicians came seeking Merrill’s counsel. He obliged with advice to both California Gov. Pete Wilson (go back to California and serve out your term) and publishing magnate Steve Forbes (create a credible organization in New Hampshire or forget about winning the primary).

Sen. Phil Gramm of Texas came by several times.

Merrill said that Gramm’s low-tax, minimalist government message appealed to him more than those of the other candidates, and he seriously considered backing the Texan.

“The problem with Gramm,” Merrill said, “is you have to meet the guy.”

In fact, after several sessions with Gramm, Merrill just couldn’t warm up to him. Besides, Gramm also was backing Delaware Republicans in their decision to schedule their primary close to New Hampshire’s Feb. 20 vote. Supporting that, Merrill said, would have been a political death sentence in New Hampshire, which prides itself on a kingmaker’s role in presidential politics.

“I told him I’d rather pass an income tax,” Merrill said.

Dole, the GOP front-runner, was the most restrained in his courtship. His approach was charmingly formal, Merrill said, “like a proper gentleman.”

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His advice to Dole was this: You cannot come into New Hampshire and run on the message, “It’s my turn.” You can’t campaign one way and govern another. The key to winning is the message you bring, and that has to be reasonable, consistent conservatism.

Merrill believes Dole took his advice to heart, and by early November he was ready to announce his endorsement. What he wasn’t ready for was the depth of Dole’s gratitude.

“We were talking in [Dole’s] office and he said to me: ‘I want you to take my message beyond New Hampshire. I want you to be the general chairman of my campaign,’ ” Merrill recalled. “I tried to look nonchalant, but I was really taken aback. I was flattered.”

On Nov. 14, Merrill and Dole announced the endorsement--as well as the governor’s campaign post--in Concord. Merrill also announced that he intended to run this November for another term as governor and to serve the full two years if elected.

Many in New Hampshire rolled their eyes. Would Merrill really turn down a top job in a Dole administration, or would he follow the lead of his gubernatorial predecessor, John H. Sununu, who quickly left the state to serve as chief of staff for the Bush White House?

Merrill insists he would be true to his pledge. “I just don’t think you can run for governor, get elected and leave the next month for a once-in-a-lifetime opportunity. This is the best job I’ve ever had or could imagine.”

If Merrill is pleased with his job, his constituents seem just as happy with him. Even his political foes concede that despite his colorless exterior, he has forged a strong bond with voters.

Merrill has been prominent in New Hampshire politics for more than a decade. In 1983, he went to work for Sununu as the governor’s counsel, then was appointed attorney general.

Merrill seized the governor’s office in 1992, winning by a 16-point margin over state Rep. Deborah Arnesen, who advocated a statewide income tax to help equalize spending on education between rich and poor districts.

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Merrill argued that the way out of New Hampshire’s recession in the early 1990s was not to raise taxes but to cut them. And he has trimmed the state levies on business profits, telecommunications and real estate transfers. He also eliminated savings-bank and corporate-franchise taxes.

The state’s economy has boomed under his watch, and the political payoff for him has been impressive. In his 1994 reelection race, Merrill obliterated state Sen. Wayne King.

“On the surface, Steve Merrill is very likable,” King said. “Other than Bill Clinton, he’s the best politician I’ve ever seen, and I use the word ‘politician’ advisedly. He is as slick as they come. He picks the hot-button issues and plays around the fringes on the policy stuff without really addressing them.”

Manchester, N.H.-based pollster Dick Bennett said the secret to Merrill’s popularity lies in the simplicity and consistency of his message.

“He’s excellent at distilling the major issues down to two or three essential points and pounding away at them. He brings every question around to the issues he wants to talk about, the points he wants to hit you with. And that will be the real benefit for Bob Dole. Bob Dole doesn’t really know how to stay consistently on message.”

Concord lawyer and political insider Tom Rath, who is Alexander’s New Hampshire campaign chairman, agreed that Merrill provides a huge advantage for Dole here.

“Presidential candidates come and go, but the governor is the only figure with a statewide organization,” Rath said. “He was a very big catch for them.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

The Players

A periodic look at the behind-the-scenes aides, consultants, media members and others shaping the course of the 1996 presidential campaign.

Steve Merrill

Age: 49

Personal: Married to Heather MacLean Walker. Sons Ian, 2, and Stephen, 6 months.

Background: Born in Hampton, N.H., son of a lumberyard operator. Graduate of the University of New Hampshire and Georgetown University law school. After service in the Air Force, entered private law practice. New Hampshire attorney general, 1985-89. Elected governor in 1992; reelected 1994. Vice chairman, Republican Governors Assn.

Downtime: Relaxing with his wife and sons, reading history and duck hunting in northern New Hampshire woods. Acknowledged political junkie and tax policy wonk.

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“He’s excellent at distilling the major issues down to two or three essential points and pounding away at them. . . . And that will be the real benefit for Bob Dole. Bob Dole doesn’t really know how to stay consistently on message.”

--New Hampshire pollster Dick Bennett, reflecting on the importance of Merrill’s endorsement in the Republican presidential race.