Eddies of Whitewater Threaten To Drag Down Clinton's Agenda

WHAT happens in Washington is sometimes less important than what is abuzz in Washington:

* At the end of last week, the House passed the $1.5 trillion budget President Clinton had proposed in January with only minor changes.

(Psst. Whitewater...)

* This week a congressional subcommittee will begin taking the first actual votes on comprehensive health-care reform.

(Whitewater...)

* The president is hosting a summit in Detroit this week with fellow leaders of industrialized democracies on jobs.

(Whitewater....)

The wheels of government continue to turn, but the hunger for information about the Arkansas real estate deal that the Clintons entered 16 years ago has become so consuming a distraction that some Washington players foresee it changing the legislative dynamics this year. (GOP lawmakers turn up the heat, Page 9.)

``It's a complete distraction,'' says veteran Democratic consultant Ted Van Dyk. ``Even if they do everything right from now on, the legislative agenda is much more limited.''

Most Washington hands agree that the drive for major health-care legislation already has a self-sustaining momentum on Capitol Hill, regardless of Whitewater. But in as much as the Clintons lose their focus and credibility over Whitewater, they become less central and less potent players in shaping health-care legislation.

``The president will lose some of his leverage, and Mrs. Clinton will certainly lose some of hers,'' says Michael Andrews, a lobbyist for Salomon Brothers financial company. ``It will certainly give Congress more leeway on health care.''

In January, when Mr. Clinton gave his State of the Union address, ``there seemed to be the possibility of a legislative hat trick for the president,'' says Will Marshall, president of the Progressive Policy Institute and a prominent activist among centrist Democrats.

Major overhauls of the health-care system and the welfare system as well as a sweeping crime bill appeared within reach.

Momentum has stalled since then, Mr. Marshall says, ``due to the underwhelming response to [Clinton's proposal on] health care, and Whitewater.''

The initiative that is most likely to fall from the agenda altogether this year is welfare reform, a priority for centrist Democrats such as Marshall eager for Clinton to show his New Democrat stripes by demanding more progress toward work from welfare recipients.

Key congressional aides who support a welfare overhaul are beginning to doubt that it will happen this year.

Mr. Andrews says that Whitewater will blow over as a major story in the next four to six weeks, based on an assumption that the various public and private investigations under way will turn up no significant wrongdoing beyond the political misjudgments of ousted White House counsel Bernard Nussbaum.

But part of the hazard of Whitewater is that so few people know anything of what breaches the matter may contain. So politicians up for reelection - all of the House and a third of the Senate - are uncertain about how closely to associate themselves with Clinton, Mr. Van Dyk says. ``They'll keep their distance from a president they're not sure about.''

Whitewater has not become a prominent campaign issue yet. Gary Koops, a spokesman for the National Republican Senatorial Committee, says that a few state parties and a few candidates have taken shots at Democrats for not holding Whitewater hearings but that campaigns have not caught up to the news on Whitewater.

The voters themselves have yet to register a strong interest in Whitewater, although the news media obsession may increase that.

A CBS News-New York Times poll released Saturday indicated that the number of people who followed the Whitewater story closely rose from 17 percent to 30 percent from January to March. But in the same period, those who said they knew too little to judge whether the Clintons did anything wrong dropped only from 68 percent to 61 percent.

THOSE who formed an opinion during the past couple months were nearly evenly split in their conclusions. The pattern seems to still hold that Whitewater is not so much changing voters' minds about the Clintons as confirming the suspicions of those who never trusted Mr. Clinton.

Tom Korologos, a Republican lobbyist who worked in the Nixon White House during Watergate, recalls that even in the full grip of that scandal, the business of governing continued much as before. ``The government still runs because it's already on a treadmill,'' Mr. Korologos says.

But, he adds, ``there's no question it's debilitating, and it saps strength.''

The focus shifts to Congress, which fills any leadership vacuum left by an otherwise-engaged president.

Has Whitewater reached that level of distraction? ``We're close,'' he says.