. . . And on Capitol Hill

By Hays Gorey

In his pre-presidential incarnation, George Bush was the Democrats' juiciest target: the perennial preppy, the suspect wimp, the Vice President who was always off at a ball game or a funeral when weighty affairs of state were being decided. But after eight months in the Oval Office, Bush tops even Ronald Reagan in popularity (70% approval), a reversal of fortune that has plunged the out party into another of its periodic identity crises. Last week, in an orgy of finger pointing, party stalwarts from New York Governor Mario Cuomo to national chairman Ron Brown asked, in effect, Where are the Democrats?

Although the party retained two House seats in special elections in Texas and California last week, the Democrats have no clearly enunciated national agenda and, perhaps worse, no one to enunciate it. To a notable lack of enthusiasm, Brown nominated himself for the role. More logical choices are House Speaker Tom Foley and Senate Majority Leader George Mitchell, since the Democrat-controlled Congress is where differences between the parties can be most sharply defined. But both leaders are cautious and, to their critics, the kind of nice guys who don't win pennants. Last week showed why:

CAPITAL GAINS

Foley and the once powerful chairman of the House Ways and Means Committee, Illinois' Dan Rostenkowski, suffered a stinging setback when six committee Democrats joined all 13 Republicans to help Bush redeem a campaign pledge to reduce this tax. Although Democrats denounced the idea in last year's presidential campaign as a giveaway to the rich (60% of its benefits will go to people with incomes of more than $200,000), the measure is expected to pass in the House. Mitchell vows to try to derail it in the Senate, but he is without the support of Texas' Lloyd Bentsen, who as chairman of the Finance Committee could be his most powerful ally.

Bentsen won acclaim for an alternative proposal: encourage savings by expanding the deduction for contributions to Individual Retirement Accounts. This would provide tax benefits mostly to the middle class while simultaneously creating a pool of investment funds, a goal of the capital- gains reduction. Before IRA deductions were restricted in 1986, however, they cost the Treasury $16 billion a year in lost taxes. Bentsen's proposal is unlikely to stop the stampede to cut capital gains, and it could become the next giveaway that Congress and the President will seize upon. But the prospect of a huge loss in revenue at a time of record deficits will probably prove unacceptable.

The capital-gains tax cut (from 33% to 19.6% for 2 1/2 years) illustrates the "babble of voices" that plagues Democratic efforts to unite on an issue. Critics say Foley and Rostenkowski threw in the towel too early; Mitchell girded his loins too late; and Bentsen, who delivered the party's response to Bush's economic message last winter, favors a lower rate.

CATASTROPHIC ILLNESS

Democrats and Republicans alike are in full retreat from ired elders who awakened belatedly to the fact that they are going to have to pay hefty premiums if catastrophic-illness coverage remains a part of Medicare. Congress and the White House will probably agree to cut back on some benefits, such as payment for prescription drugs, to lower premiums that could amount to $1,600 a year for a couple.

DRUGS

When Delaware Senator Joe Biden delivered the Democratic response to Bush's "War on Drugs" speech, only one network carried it live. What stuck in the public's mind -- and Ron Brown's craw -- was the image of New York Congressman Charles Rangel facing the cameras after a White House conference and urging a tax hike to wage the war. Moaned Brown: "You can hear America sigh, 'The tax-and-spend Democrats.' "

Congress always wages an uneven battle with the President, but Democratic political consultant Ted Van Dyk declares, "The troops are starting to get restless. There have been no clear alternatives and damn little criticism. Foley and Mitchell should be out front." Yet the Democrats have been mired in troubles of their own: the convoluted agony of the pay raise, the forced resignations of Speaker Jim Wright and whip Tony Coelho, and now the sex scandal involving Massachusetts Congressman Barney Frank. Nor is the climate right for combat, with the economy perking along and the President enjoying an extended honeymoon. Grouses former party chairman Bob Strauss: "This is not the time to take on George Bush head on."

For his part, Foley notes that the Speaker no longer has the power exercised by the legendary Sam Rayburn: "The hierarchical society is gone, in the country and in the Congress. The idea of government is to govern. There will be enough fights." Observes Mitchell: "There will be both confrontation and cooperation. There will not be confrontation for the sake of confrontation."

Expectably, the White House is delighted with Democratic frustrations. Political operatives believe Bush has stolen the opposition's best issues: the environment, education, child care, the minimum wage (where Bush's veto of a Democratic bill will force a compromise to the President's liking). "We have co-opted them in areas that have traditionally been their strength. They don't know what to do," gloats a senior Administration official.

He may have a point. With the President barely settled into the White House, a few Democrats are already conceding his re-election in 1992 and training their sights on 1996, when Bush will be gone and the G.O.P. nominee could be Vice President Dan Quayle. The Democrats should be so lucky.