PLAYING THE ENDGAME

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When Bill Clinton met with Newt Gingrich, Bob Dole and the rest of the congressional leadership last week, the mood was cordial, the atmosphere so thick with promises to work together you could almost forget that not long ago the G.O.P. revolutionaries were ready to set up guillotines on the Capitol Mall. The impulse to cooperate was not entirely contrived, as Senate Republicans and Democrats proved last week when they made real progress toward a final version of welfare reform. Clinton even praised the Senate in his Saturday radio address for "wisdom and courage" in crafting the bill that he said puts the country "within striking distance" of a package he would be willing to sign. After months of partisan fang baring, the Great Standoff of 1995 is heading toward its endgame. It's time now to make as many deals as politics and principle will allow.

But politics and principle are also converging to guarantee that the era of good feeling will be short lived. Before the year is out, the public may well be treated to a display of the most confrontational tactics ever to be wielded in Washington. The latest shot fired was from House Republicans, who last week sketched out their plan to slow the growth of Medicare spending by $270 billion over seven years. For all the flammable rhetoric it generated, the move was only part of a much larger showdown over budget balancing that could ultimately unhinge Wall Street and rock the whole American economy. And what is this mortal-combat phase really about? The G.O.P. freshmen and their allies insist that the deficit must be balanced according to their timetable and not a minute more; the White House wants to take it slower.

In this war, the G.O.P.'s first weapon is the much-talked-about "train wreck"--the shutdown of government operations that could occur if Congress and the President fail to agree on 13 new spending bills by Oct. 1, the first year's installment toward balancing the budget. But even if both sides can avoid that crack-up, which they probably will, the Republicans have started threatening a far bigger disaster: unless the President signs on to the G.O.P. schedule for balancing the budget, the Republicans are threatening to allow the U.S. to default on its debts, with all the ensuing market chaos it would create.

If it comes to that, the people who can take the credit, or blame, are the fire-breathing G.O.P. House freshmen. The 73 first-termers are united by their singular conviction that the budget must be balanced in seven years--not the 10 that Clinton proposes. At least three times in the past two weeks they met with Gingrich to tell him this is a nonnegotiable demand. And Gingrich is promising to hold their line pretty much where they want it. "Seven years and a month, maybe," he says. "But eight years, no."