Goodbye, Big Tax Cut. Hello, Smaller Debt. ; Republicans on Hill, Unlike Presidential Candidates, Shift Emphasis To

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Coming off a failed effort last year to win a huge tax cut for Americans, congressional Republicans are back in town with a new fiscal message for this year: Let's reduce the national debt.

That, of course, is the same as saying, "Let's not do much," because any unused portions of the federal budget surplus automatically default to paying down the $3.7 trillion publicly held debt.

Still, Republicans on the Hill call their debt-reduction plan "significant," and say it won't preclude cutting taxes.

But, in a clear shift in strategy, the bite-size, targeted cuts they are proposing for this year are minuscule compared with last year's tax-cut banquet - and are even far smaller than cuts being proposed by GOP presidential front-runner George W. Bush.

What all this portends, say many Congress-watchers, is a year of modest legislative accomplishment, as lawmakers delay some of the hard issues until a new president is elected.

"Debt retirement is the default position," says Stephen Moore, fiscal-policy director for the Cato Institute here. "It's an indication that they don't have a very bold or exciting agenda for this year."

So far, neither the Republican leaders of Congress nor the White House and Democrats have launched the new year with bold policy initiatives.

"If this is what you are leading with, you know there will be no big proposals up ahead," says Stanley Collender of the federal budget consulting group at Fleishman-Hillard Inc., a Washington public-relations firm.

Nibbling around the edges

Prospects for major legislative compromises in a short congressional session (starting Jan. 24 and ending in early October) are also dim as each party focuses on the coming election. The GOP is only five seats from losing control of the House of Representatives.

"Republicans want to get out of town as early as possible to campaign," says Mr. Moore.

As a result, analysts predict continued stasis on Capitol Hill, with Republicans tinkering with small tax cuts while mounting a rear- guard battle against White House spending proposals.

The White House agenda includes a new proposal for $1.3 billion in loans and grants to renovate schools. The rest of the Democrats' wish list is largely unfinished business from last year, including health-care insurance reforms, gun control, and raising the minimum wage. President Clinton will formally unveil his fiscal 2001 budget next month.

Republicans will focus on improving trade ties with China and WTO membership, high-tech issues such as digital signatures, and - most notably - greatly scaled-back tax cuts.

Backing away from a big tax cut may be a pragmatic move for the GOP. Last year's $792 billion, 10-year package, which Mr. …