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WHAT MAKES A PERSON A G.O.P. VICE presidential candidate? It would help if he were Colin Powell, but barring that, it would be nice if the candidate hailed from an electoral swing state. He or she might belong to a sought-after voting group like, say, Catholics. But most of all, you would want someone who has been on the national scene without being a Washington pol. Someone who knows how to get things done. A Governor.

It is a good year for Governors in America, and last week was their best yet. The National Governors' Association arrived in Washington on Feb. 3, and within days it had managed what Bill Clinton and the Congress could not. Last Tuesday, in a unanimous and bipartisan vote, the Governors passed a six-page policy outline on both welfare and Medicaid reform. The Medicaid scheme leaned in the Administration's direction, maintaining some federally mandated health guarantees for the disabled, pregnant women, the elderly and children up to age 12. The welfare outline was closer to what Congress wants: states would get their federal money with few strings attached and be allowed to cut up to 25% of their own contribution; poor people would be required to find jobs and would be kicked off the welfare rolls after five years.

While liberal groups called the plan a heartless gubernatorial money-grab, Newt Gingrich said it could become law as early as March, and Clinton called it a "huge step in the right direction." Whatever its fate, it has further beatified the Governors. Specifically, it has enhanced the vice presidential chances of John Engler, one of its key Republican negotiators. Portly, balding, tenacious and smart, Engler does happen to govern a swing state, Michigan. He is Catholic. More important, he has slashed government and welfare rolls, been reviled for it, but ended up victorious at re-election. Says conservative editor and strategist William Kristol: "He's an obvious V.P. choice. I think after Powell, Engler is the most likely choice."

Engler's beast-to-beauty story began in 1990, when he defeated Democratic incumbent James Blanchard by a margin of less than 1%. Engler was not particularly popular, but he promised to dig a strapped Michigan out of a $1.8 billion deficit without raising taxes. He lost no time starting. Half a year after his election, he shocked observers by eliminating Michigan's general-assistance program for the state's 83,000 childless, able-bodied poor. Then he moved on to civil servants, cutting 20 boards and commissions and 5,000 state jobs.

Many Michiganders thought he would soon be unemployed himself. In the fall after his welfare move, two homeless men whose payments had been cut lit a fire for warmth in an abandoned house and asphyxiated. An "Englerville" shantytown sprouted in front of the state capital. Engler was widely described as mean; his own pollster put his approval rating at 31%.

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