NOT A BANG BUT A WHIMPER

By MATTHEW MILLER

CHURCHILL SAID FAMOUSLY AFTER DUNKIRK, "wars are not won by evacuations." Maybe someone needs to tell the Speaker of the House the same thing about fiscal retreats. Last week, after months of budget stalemate, Newt Gingrich floated a conciliatory plan that could actually reverse course on the deficit. According to his proposal, Congress and the White House would claim victory by adding a "down payment" on a balanced budget to the debt-ceiling extension the G.O.P. now says it will pass next month. The package Gingrich outlined would shave as much as $100 billion from spending during seven years, devoting $25 billion of this to tax cuts. If this package sounds familiar, there's a reason. It's a pale twin of the President's February 1995 budget, the timid postelection plan that launched this yearlong roller-coaster ride in the first place. But there is one new wrinkle: with tax cuts up front, Gingrich's scheme could very well increase the deficit in the next two years, then leave it hovering near $200 billion thereafter.

How could the Republicans end up settling for less than last year's opening bid from Clinton after an orgy of breast beating over balanced budgets? Long ago, in a fiscal blueprint that now seems far, far away, Clinton unveiled his first 1995 budget to a chorus of groans. Leaving the deficit at $200 billion, the President offered a five-year package of $140 billion in spending cuts (a reduction of 1.6% in federal spending), $60 billion of which would pay for tax cuts. Gingrich called the plan "very, very disappointing," and it was laughed out of town by his fellow Republicans and by editorial writers. To embarrass the President, Bob Dole brought the plan to the Senate floor, where in May it failed to get even a single Democratic vote.

Well, times change. That plan was more ambitious than the measure Gingrich now has in mind. Chastened by vetoes and reeling from the President's surge in the polls, the G.O.P. has shifted strategy. After the State of the Union, the Speaker talks less like a revolutionary than a dealmaker, eager to bank some quick accomplishments rather than send his colleagues to the stump empty-handed. Passing symbolic pieces of the G.O.P. agenda on a monthly installment plan is the strategy du jour, meant to offer voters a preview of what life under a Republican President might be like. While the Democrats may not go along with this, the irony for the G.O.P. agenda can't be lost. In the weeks ahead, Gingrich may be selling a "first big down payment" with less deficit reduction and smaller tax cuts than the original Clinton budget he dismissed out of hand.

All of which raises the $700 billion question. In their 50 hours of negotiations, the White House and congressional leaders got within a few philosophical inches of agreeing to roughly this much in spending cuts, enough to balance the budget over seven years. Why are Republicans now exaggerating these differences, letting go a Big Deal, which would by any measure be a huge achievement? Some blame the freshmen, who are said to prefer no deal to a "bad" deal. Yet one freshman admits their phalanx is in disarray, anxious over tough Medicare votes they've cast with nothing as yet to show for them. They huddled last Saturday to ponder which outcome best serves their principles--and politics. Centrists in both parties kept up the hunt for enough votes on the Big Deal to inspire their leaders to keep trying.

It's not over yet, but if the bigger package evaporates, one thing seems certain. It will take more than what Gingrich calls the G.O.P.'s "transitional communications strategy" to explain why 12 months of shouting and standoffs now amounts to so little.

--By Matthew Miller