The Clinton Reducing Plan

Bill Clinton has never really hit it off with Daniel Patrick Moynihan, but now he needs him. That's why the President had to pick up the phone in the White House last Wednesday night and mend fences -- not for the first time -- with the brilliant and unpredictable New York Senator. Clinton called to deny news reports that he was "exasperated" with Moynihan's lack of movement on health-care legislation. Never mind that the reports were accurate and that Senate majority leader George Mitchell shared the President's frustration. Clinton recognizes that Moynihan's Finance Committee now represents the best hope for crafting a compromise, and the President can't afford to have the chairman in a sulk.

But Clinton did not stop there. Alarmed at the impasse over health-care reform, he broke with his strategy of remaining above the fray in Congress. On Thursday and Friday, Clinton engaged Finance Committee members of both parties in one-on-one meetings and phone calls, seeking to discover what sort of compromise might win majority support. That is normally the chairman's job. However, said a Clinton aide, "this let-them-write-it-themselves stuff did not seem to work too well."

The President felt he had to intervene now, his allies say, because the health-care fight is entering a crucial stage in which a compromise must be reached before the process loses momentum. His top domestic initiative hangs in the balance. Clinton faces the prospect that he not only might fail to get what he wants, but might get nothing at all this year.

The biggest obstacle to agreement, Clinton heard from the Senators, is the so-called employer mandate. That provision of the Clinton plan would require employers to pay about 80% of the cost of health insurance for their workers. This would help Clinton extend coverage to 35 million uninsured Americans without raising taxes on the 85% who already have insurance. "The mandate is vital," says Senator Jay Rockefeller, the West Virginia Democrat and main Clinton-plan backer in the Senate. "You don't get to universal coverage without it," he adds.

Owners of small businesses complain that the mandate would force them to cut wages and lay off employees. The White House until recently believed their opposition could be neutralized by support from their employees, as well as $ from big companies and unions, which would benefit from the Clinton plan. As a result, Hillary Rodham Clinton last year dismissed small-business plaints by saying, "I can't be expected to save every undercapitalized entrepreneur."

Both Clintons have since had their consciousness raised. Owners of small businesses -- 16 million strong, nearly equal to the ranks of union members -- last week showed their strength by blocking the employer mandate in key committees that are struggling to frame legislation on health-care reform. The Finance Committee's ranking Republican, Oregon Senator Bob Packwood, explained that big unionized "industries like autos and steel are significant in four or five states, but restaurants and retail outlets are everywhere."