BUDGET IN TRIO'S HANDS\Stakes high for Dole, Clinton, Gingrich.

Byline: Robert A. Rankin and Jodi Enda Knight-Ridder Tribune News Wire

In the end, America's great balanced-budget debate will be decided by three very different men - Bill Clinton, Bob Dole and Newt Gingrich - whose futures may well hinge on the outcome.

To compromise or not to compromise - and if so, how much, and on what terms?

If Clinton strikes a balanced-budget deal with the Republican Congress, it could sink his presidency or seal his case for re-election, depending on how he does it. Dole weighs a similar calculus as the GOP front-runner to take Clinton's job. And Gingrich's entire "Republican Revolution" hangs in the balance.

Those stakes have been in the background during more than 20 hours of White House budget talks among Clinton, Dole and Gingrich in the past couple of weeks. Here's a look at arguments tugging at them from both sides:

CLINTON: STAND FIRM

The president says this battle is between differing philosophies of government. He insists the GOP budget would devastate programs that he believes are essential - especially Medicare, Medicaid, aid to education and protection of the environment. At stake is the role of the federal government in the lives of Americans.

As leader of his party, Clinton also must protect the interests of Democrats across the country and in Congress. If he yields too much, he'll lose his base of support, which was not strong to begin with.

In personal terms, Clinton has a reputation as a pushover. But his refusal to back down in this budget fight is strengthening his image. His approval ratings are up in opinion polls.

Finally, the only deal Republicans have offered so far amounts to capitulation: Balance the budget on their terms. If Clinton goes along, he could go down in history as the Democrat who ushered in the Republican Revolution, rewarding his enemies and strengthening their claim to leadership.

COMPROMISE

Balancing the budget is expected to add long-term strength to the U.S. economy. It would cut interest on the national debt and interest rates in the economy, so a deal could be good for America.

Besides, it is the president's responsibility to make government work, and in a system of divided powers, compromise is essential.

In personal terms, one of Clinton's biggest weaknesses is his image as an ineffective leader. Compromise that yields a deal could make him look effective. By compromising, Clinton also could play to one of the strongest aspects of his character, for his whole approach to politics - indeed, to life - is to smooth over conflict and avoid confrontation.

And compromising the right way could make for good politics.

If Clinton can strike a deal that balances the budget while softening the harsher edges of the GOP program, he can argue that he responded to the voters' call for change while moderating GOP excesses. Most voters seem to want that kind of centrist politics from a president.

In contrast, failure to reach a deal could turn voters sour. If Clinton's case for re-election boils down to touting the benefits of budget gridlock, he may face a tough sell in November.

HIS CHOICE SO FAR

Clinton compromised a lot in 1995. His February budget left $200 billion in deficits perpetually, but in June he proposed balancing the budget in 10 years. In December he accepted seven years as the target and trimmed back his spending proposals. But his program still does not achieve balance in the judgment of the Congressional Budget Office, which Republicans swear by.

So far in the latest round of White House talks, Clinton has stood firm behind his own proposals.

DOLE: STAND FIRM

He has been painted as a man without conviction, a consummate deal maker.

Now Dole has a chance to recast his image. By standing firm for a balanced budget after breaking ranks with House Republicans on ending their partial shutdown of government, Dole is "acting prBesidential."

Hard-core conservatives say the shutdown kept pressure on Clinton to swallow their budget. They say Dole played into Clinton's hands by moving to end the shutdown - a move they say confirms Dole's lack of conviction. Because these conservatives wield heavy influence over who gets the GOP presidential nomination, Dole is under heavy pressure to appease them.

So far, Dole has not wavered in the broader budget talks. He is standing firm behind the central GOP goal of a balanced budget in seven years - and behind the GOP path for getting there.

That might keep GOP conservatives loyal. It also plays to Dole's strength as a veteran negotiator: flexible on tactics, but sure of what he wants on the bottom line - in this case, a balanced budget. If there's no deal, he could make the case to voters that they need to elect him to get the government's books in order. Compromising with Clinton might weaken that case.

COMPROMISE

Some say Dole would show his presidential qualities best by leading Gingrich into a budget deal obtainable only by compromise.

In this view, Clinton will compromise but he won't capitulate. Therefore if Republicans are to come away with anything, only a canny, seasoned deal-maker like Dole can deliver it. This chance to deliver a winning compromise is Dole's best opportunity to demonstrate his special gifts of leadership.

"Dole's stature has been enhanced" by the budget showdown, said Iowa Republican Chairman Brian Kennedy, who has remained neutral in the GOP presidential race. "When you look at Clinton, Gingrich and Dole, Dole looks the most mature, the most statesmanlike, the coolest head at the table. . . . People aren't paying attention to the inside politics," Kennedy said. "It'll be the final product that matters."

A budget deal would also allow Dole to devote more time to his presidential campaign. By now, he hoped to be in New Hampshire and Iowa courting voters. Instead, he's stuck in Washington with Gingrich and Clinton.

HIS CHOICE SO FAR

Dole has crusaded for a balanced budget his entire career, but he is flexible about how to get one. That worries many House Republicans who believe the voters gave them a mandate to enact their plan. They fear Dole may compromise too much on terms such as tax cuts. So far, no serious compromises have emerged on any major issues in recent White House talks.

GINGRICH: STAND FIRM

He became speaker by persuading a flood tide of freshman lawmakers to stand with him behind a common set of goals he called the GOP "Contract With America." Most of the terms are at stake in the GOP budget.

Gingrich's followers consider their balanced-budget quest to be historic. They call it a Republican Revolution. They see it as the key to reversing 60 years of what they consider to be ineffective government. They believe a balanced budget would reinvigorate the economy and keep faith with the voters who elected them and the young people who will inherit the better world they intend to leave them.

If Gingrich compromises now, some followers might see him as a turncoat. To them, standing firm is a do-or-die mission. Compromising with Clinton would be surrender to all they hoped to change.

"The Republicans already have been battered so badly that they might as well stand their ground and be seen as adhering to principle even if they lose," said Merle Black, a professor of politics at Emory University in Atlanta.

COMPROMISE

Clinton might never agree to GOP terms. That would leave Gingrich's allies in the vaunted Republican Revolution with virtually nothing to show in law after two years of crowing about all the historic change they would deliver - unless Gingrich compromises.

By this reasoning, Gingrich would do better to gain something by compromise rather than win nothing by excessive adherence to principle.

A compromise could yield the central points the GOP fought for, enable Gingrich to claim victory, and enhance both his stature and his party's bid for more power in 1996 elections. Now both are in jeopardy, particularly Gingrich's stature. In the wake of a series of personal missteps, his approval rating is far lower than Clinton's or Dole's.

Finally, as House speaker, Gingrich also holds responsibility to make the government function, just as do Clinton and Dole. Statesmanship requires compromise.

HIS CHOICE SO FAR

Gingrich has stood firm behind the GOP plan.

FRIDAY BUDGET GLANCE

Highlights of measures passed by Congress on Friday reinstating furloughed federal employees to their jobs and providing a resumption of funding for a host of government programs:

Some 280,000 federal employees would return to their jobs and be reimbursed for lost salaries. An additional 480,000, working without wages since Dec. 16, would receive full current and retroactive pay. The legislation would last through Jan. 26.

A host of government programs would be funded, including assistance to the elderly, veterans and welfare recipients. National parks, passport offices and museums would reopen. In most cases, the funds would last the entire fiscal year.

The government's biggest welfare program, Aid to Families with Dependent Children, and foster care adoption assistance to states would last through March 15.

The entire government would be reopened through Jan. 26, provided President Clinton submitted a seven-year balanced budget plan with estimates certified by the Congressional Budget Office.

CAPTION(S):

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Box FRIDAY BUDGET GLANCE (see text)