Political Parties Draw at Least Five Battle Lines for Election '98 When Congress Resumes at Month's End, Money Matters Will Likely Sharpen the Partisan Divide

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Already, Republicans and Democrats are busy honing their agendas for the coming session of Congress, which resumes at the end of the month.

Each party's goal is similar: Find issues that distinguish it from the other - and that the public will rally behind - and ride them to victory in November's elections.

Both sides have staked out sharp differences on several key issues: how to improve education, how to reform the tax code and cut taxes, what to do with any budget surplus, what to do about affirmative action, and how to amend campaign-finance laws. While Congress faces many issues, these are the most likely to break along partisan lines. Education. Republicans say competition would force public schools to improve; they call for "parental choice" of public or private schools. They would create "education savings accounts," allowing parents to deposit up to $2,000 a year and spend the gain tax-free on K-to-12 expenses for public, private, or home schooling. The GOP also pushes scholarships to inner-city children for use at any school. Democrats view the GOP proposals as an attack on public schools. They propose spending more on early-childhood development, teacher training, rebuilding decrepit schools, and choice "within the public-school system." "Some 90 percent of American children attend public schools, and that's why it's so important we invest in them," says House minority whip David Bonior (D) of Michigan. Tax reform. Both parties will propose cutting taxes further, but in different ways. House Speaker Newt Gingrich (R) of Georgia wants to phase out the "marriage penalty" (in which some married couples pay more income tax than they would as individuals) and reduce income-tax rates. President Clinton prefers cuts or credits targeted to certain groups rather than across-the-board reductions. In the longer term, Republicans and Democrats alike advocate simplifying and reducing income taxes. But all agree a public consensus is required. "We need a national dialogue" on tax reform, Speaker Gingrich says. Republicans lean toward single-rate taxes under the slogan, "fairer, flatter, simpler." House majority leader Dick Armey (R) of Texas is stumping for a flat tax of 17 percent on income of more than $33,800 for a family of four. …