Tax Cut Debate Erupts in GOP : Convention: Conservatives urge Bush to propose a reduction. Dole calls it 'bad medicine.' As delegates gather, President says he's eager to heat up campaign.

By JACK NELSON and DOUGLAS JEHL

Aug. 17, 1992 12 AM PT

TIMES STAFF WRITERS

HOUSTON — A sharp debate over whether President Bush should call for tax cuts in his all-important acceptance speech Thursday broke out among Republicans here Sunday on the eve of a national convention considered critical to his chances of uniting his party and winning reelection next fall.

Although conservative leaders pressed Bush to make a tax cut the centerpiece of his address accepting the GOP’s presidential nomination, moderates argued against any such proposal.

Senate Republican Leader Bob Dole of Kansas declared that cutting taxes now would be “bad medicine” for the troubled economy. That brought a quick rejoinder from tax cut advocate Rep. Vin Weber of Minnesota, who said Dole’s attitude made him glad Bush--and not the Senate leader--was in the White House.

Bush plans to use the acceptance speech to unveil a series of proposals to revive the economy, according to campaign officials. While the President has declined to disclose any details, Housing and Urban Development Secretary Jack Kemp, who has discussed the matter with him and is a longtime proponent of tax reductions, has predicted that Bush will call for cuts.

Meanwhile, as delegates streamed into Houston for today’s opening session of the four-day convention:

* The President angrily dismissed a news report quoting a government official as saying the White House is preparing to provoke a military clash with Iraqi dictator Saddam Hussein in part to help Bush’s troubled bid for reelection.

* After insisting for months that he was not in the “campaign mode,” Bush sought to rally Republican staffers by declaring he is now ready to “pick up the torch” and begin campaigning in earnest.

* The GOP prepared to brush aside scattered opposition among convention delegates and adopt one of its most conservative platforms of modern times, including controversial planks opposing abortion and limiting the rights of homosexuals. The 1992 platform is to be approved today, and critics will have little opportunity to express their reservations.

* Stalwarts from the GOP’s right wing, including former President Ronald Reagan and conservative commentator Patrick J. Buchanan, who lost a bitterly fought primary battle with Bush, polished speeches for tonight that convention planners hope will reignite the spirits of GOP rank-and-filers.

* Delegates, many of whom have joined party leaders in complaining about the negative tone of coverage of Bush’s political plight, encountered a fresh round of discouraging reports. A Houston Post headline trumpeted a new Texas Poll that found Bush trailing Democrat Bill Clinton by 17 percentage points in the state, while national news magazines and a host of other publications carried critical assessments of the President’s status.

Whether Bush proposes a tax cut could be one of the most important tactical decisions of his campaign. White House officials involved in the debate said it could force the President to choose whether to cast himself as a traditional fiscal conservative or a more activist proponent of supply-side economics in the spirit of his White House predecessor, Ronald Reagan.

Dole, a traditionalist who believes tax cuts by themselves could hurt the economy by aggravating the already soaring budget deficit, declared that such legislation “is not going to be enacted this year.”

“If he can offset the tax cut with a spending freeze or a spending reduction,” Dole said in an NBC interview, “that would make good economic sense. But a tax cut by itself, as some of the supply-siders might advocate, would be bad medicine.”

That prompted supply-side Weber to tell CBS that Dole’s statement “just makes me all the happier that he’s the Senate leader and President Bush is in the White House.”

Weber said the possibility of proposing additional tax reductions to stimulate the economy is under active consideration. And Kemp suggested that Bush is prepared to outline plans for a cut to benefit citizens at virtually all income levels.

Yet what Bush actually intends to do on the issue Thursday is “the most closely guarded secret of the convention,” said one official.

Another source said that “a large portion” of the economic plan has been approved by Bush.

Showdown With Iraq

Bush aides worried that the President’s attempts to shift his focus from foreign policy and “target America,” as one staffer put it, by addressing economic and other domestic concerns might be overshadowed by reports that the Administration is preparing for a military showdown with Iraq.

Not only did the President angrily dismiss any suggestion that politics would influence his decision regarding Iraq, but Mary Matalin, his deputy campaign manager, and other officials insisted repeatedly to reporters that Bush would never allow politics to shape his conduct on foreign policy.

In remarks Sunday after returning to the White House from Camp David, and later in a telephone talk to volunteers here, Bush signaled that he is determined to play the role of commander in chief, both in what now appears to be an imminent showdown with Iraq and on other foreign policy issues.

“We’re not going to apologize for the time that we’ve invested in bringing peace to the world, and indeed in changing the world,” he declared.

The Clinton campaign quickly backed Bush on Iraq. “I have stated clearly, repeatedly, that we have to expect and demand and insist that Saddam Hussein comply with the cease-fire agreements. And I don’t think we should rule out military force,” Clinton said from Little Rock Sunday evening.

Asked to comment on charges that Bush might initiate a military action in Iraq for political reasons, he said: “We know of no example where the commander in chief has used or would use the awesome power of military action for political purposes.”

The Campaign

In his pep talk to volunteers here, Bush, reflecting an aggressive new campaign tone, said: “Now we’re going to get our chance.

“We’ve got a good program. The American people do not know it. And when we get finished with this campaign, they will.”

Although Bush actually began intensifying his campaign efforts soon after the Democratic convention last month, he has continued to slide in some polls. Both he and his top aides see the convention as an opportunity for the President to make a new start, energize the campaign and narrow the lead Clinton enjoys in the polls.

In an ABC interview broadcast Sunday but taped Thursday, Bush, a World War II Navy combat pilot, used a Navy term in sounding a more confrontational note. He vowed to go to “general quarters” in challenging Clinton and said he would link the Arkansas governor to “the sorry record” of the Democratic-controlled Congress.

Asked how he could catch up with Clinton between now and the November election, Bush said: “I think the answer is that people will come to their senses, and, in the final analysis, they’re going to say, ‘George Bush has demonstrated that he has the courage and the knowledge and the trust to sit in that Oval Office.’ ”

The Platform

Grumbling about the platform--and particularly its rigid language opposing abortions--echoed in lobbies and corridors of Houston hotels where delegates gathered Sunday night. Many expressed concern upon learning that Bush operatives would prohibit them from carrying abortion rights placards into the Astrodome.

Top convention and campaign officials insisted that the prohibition of handmade signs was nothing more than business as usual for a Republican Convention. “The rule is simple, and it’s always the same,” said Craig Fuller, convention manager and a longtime Bush loyalist. “You can’t carry them in.”

The rule is designed to create the impression of unanimity for those watching the convention on television, but it seemed likely to spur further efforts by delegates who back abortion rights to strip the abortion language from the platform.

There appeared to be little or no chance the efforts would succeed. “It’s not going to happen,” senior adviser Charles Black said bluntly. “That’s a lost cause.”

The abortion language, which the President’s wife, Barbara, questioned in declaring last week that the issue should have been left out of the platform, continued to cause discomfort to some GOP officials. “It shouldn’t be the centerpiece of anyone’s campaign,” Dole said.

The Media

Delegates arriving here Sunday for the convention found new reasons to bemoan the relentlessly dispiriting nature of news reports about the party’s prospects.

Not only did national publications feature detailed reports on the President’s political problems, but the two major newspapers in his adopted hometown--the Post and the Chronicle--were brimming over with unwelcome news.

The Post displayed a front-page banner headline on its Texas Poll, putting Clinton ahead by 17 percentage points. In addition to lagging far behind in his own state, the President--a Chronicle headline blared--is “Badly Lagging in Electoral Support” nationally.

The national media was just about as depressing for the Republicans. The cover of U.S. News & World Report depicted Bush as a prisoner in the White House, clutching it’s pillars as though they were bars, under the heading: “Prisoner of Washington: Why George Bush Can’t Change.”

Convention Speakers

The convention’s opening night shapes up as a salute to the party’s conservative wing, featuring an array of right-wing cheerleaders whose job it will be to fire up a crowd that is looking hard for something to cheer about.

Reagan, who helped forge the broad Republican coalition that now appears in jeopardy, will take a turn at the microphone. Buchanan, another conservative crowd-pleaser, will explain why voters should throw their support to Bush, whom he attacked savagely during his own spirited bid for the Republican nomination.

Times staff writers William J. Eaton, Michael Ross and David Lauter contributed to this report.