Background check: people to watch in the new Congress.

On November 9, Bill Clinton became a domestic-policy lame duck. Since then, all of the energy and initiative for changes in taxes, spending, and regulation have originated on Capitol Hill. Even the White House's "Middle Class Bill of Rights" was upstaged by Hill Democrats when incoming Minority Leader Dick Gephardt proposed his own middle-class tax cut three days before Clinton unveiled his plan.

The November election was both a rejection of the high-handed ways in which Democrats have controlled the legislative branch and a call for a less-intrusive federal government. The House Republicans, led by Speaker Newt Gingrich, have already implemented long-overdue changes in the ways Congress operates - eliminating committees, requiring members to be present at committee meetings to cast votes, and forcing Congress to abide by the laws under which businesses operate.

But the November elections cannot be considered truly revolutionary unless Congress does more than keep its own houses in order. If the GOP is serious about rolling back the federal government, it must tackle arcane budget rules, the tax code, and regulations. And it must overcome powerful advocates for statism both inside and outside the Republican party.

The mainstream press may have conferred near omnipotence on Gingrich. But his voice won't be the only one heard on Capitol Hill. Senators and other representatives will serve up ideas that Congress will tackle, including some the speaker doesn't like. Here are a few bellwethers worth watching:

The Innovators

The Republicans' new congressional majority is a tribute to the power of ideas as party-building political tools. And as House Majority Leader Dick Armey proved with his base-closing commission, clever policy making can be a great way to build an individual career. The need for new ideas will continue once the 100 days of the Contract with America have come and gone. Expect the Republicans to look to these innovators for both policy and packaging to define the post-Contract Congress.

Rep. Chris Cox (R-Calif.)

The Orange County congressman floated his first initiative for the new Congress on election night: The Republicans might, he said, reorganize the House committee structure to reflect an anti-statist agenda, starting with committees on revision and repeal and on privatization and deregulation. Following Gingrich's operating procedure, Cox announced the possible reorganization first to the public, via TV appearances and newspaper interviews.

Such fundamental restructuring was too hot for Newt's revolutionaries. But the trial balloon marked Cox as an idea man in the new Congress, getting him favorable coverage from George Will and other columnists. And it reminded the Republican majority not to fall in love with passing laws - that their self-proclaimed agenda is to roll back government, not to expand it in new directions.

A member of the counsel's staff in the Reagan White House, the 42-year-old Cox is best known to Congress watchers for his work on budget reform. In 1989 he cooked up a plan to impose discipline on congressional appropriations and control the automatic escalation of even "discretionary" federal spending.

The articulate Newport Beach representative proposed switching to a one-page budget specifying how much could be spent in each of the 19 categories that make up the federal budget. If Congress went over the specified limits, the president could rescind the additional spending. The Cox plan also would have frozen each agency's budget at the previous year's level unless Congress specifically increased the budget, thereby doing away with "baseline budgeting."

Cox is the second-ranking Republican on the Budget Committee, after Chairman John Kasich of Ohio. Before the election, Republicans disgruntled with Kasich's compromise on the crime bill and suspicious that Kasich might be too friendly to Democratic tax-raising schemes had hinted they might hand a future chairmanship to Cox. The threat apparently worked; in the weeks leading up to the election, Kasich became one of the most important spokesmen for the fiscal provisions of the Republican Contract.

And Cox instead landed a leadership position as the new chairman of the Republican Policy Committee, the House's internal think tank. There, among other issues, Cox will gauge public support for the two Republican plans to simplify taxes: Armey's proposed 17-percent flat tax and incoming Ways and Means Chairman Bill Archer's plan to abolish the Internal Revenue Service and replace the income tax with a national sales tax. Cox is a critic of using taxes as a tool of behavior modification, and he may end up refereeing the coming struggle between Republicans who want to make the tax code simple and Republicans who want to lard it with credits and deductions designed to entice Americans to behave in a more conservative-approved manner.

Cox, whose Harvard law degree came along with an MBA, can also expect to play a major role in calming the calls for regulation that accompany each rediscovery that securities markets entail risk. The former securities lawyer was in the headlines when Orange County declared bankruptcy in December. In fact, he broke the story when he was handed a note from the county's lobbyist during a meeting with reporters. The note read: "Urgent: Orange County may declare bankruptcy by 1:30 this afternoon. Please call the SEC to get the federal courts to freeze the asset pool" to stop investors from pulling their money out. Cox read the first sentence aloud - he later said he assumed the news was already public - and thereby precluded any behind-the-scenes federal intervention.

As the GOP's point man on financial markets and an Orange County representative, Cox would be the logical person to head any congressional inquiry into the bankruptcy. That means the county's financial shenanigans are unlikely to spark a witchhunt against derivatives or other esoteric securities.

As part of the Contract with America, Cox is principal sponsor of the Securities Litigation Reform Act, a bill that would make it more difficult for investors to file class-action lawsuits against the companies they invest in or the brokerage houses from which they take advice. Cox's bill would require an investor to hold at least a 1-percent stake in a Security before filing suit; force plaintiffs to prove brokerages intentionally lied rather than merely gave bad investment advice; and make investors who lost lawsuits pay the defendants' legal fees. Nuisance suits when stock prices fall are pet peeves of growth companies in particular, including the high-tech communities in both Orange County and Silicon Valley.

Both regions could prove critical to Cox's longer-term ambitions. He had considered challenging Dianne Feinstein for the Senate last year. Given the Republican year, he might very well have won the general election. When Michael Huffington promised to spend millions to win the Republican primary, however, Cox decided to hold on to his House seat. Many observers believe Cox will challenge Barbara Boxer for California's other Senate seat in 1998.

Rep. Bill Zeliff (R-N.H.)

The 1994 elections may have marked a turning point in the public perception of the pork-barrel programs that concentrate benefits in one congressional district. Skepticism of such targeted government programs helped sound the death-knell for those legislators, notably House Speaker Tom Foley, who viewed government as a patronage machine or a way to bribe voters. And few issues underscored the ossified nature of Democrats in the 103rd Congress more than their leaders' response to the A-to-Z spending-cut plan.

A-to-Z was a clever policy idea with a career-building name. It took its title from the distinctive last initial of its originator, Bill Zeliff, an affable 58-year-old from New Hampshire's north country. He went looking for a co-sponsor whose surname would complete the alphabetical spectrum and signed on Rob Andrews, a then-freshman Democrat from New Jersey.

Much like Armey's base-closing commission, which listed a group of bases that would either all continue operating or would all close, the A-to-Z program offered an ingenious method of circumventing the pork barrel. The A-to-Z plan would set aside a segment of the legislative calendar in which any member of Congress could propose cuts in any federal program or cluster of programs. The entire House would then cast an up-or-down vote on each proposal.

When the Democrat leaders refused to hold hearings on A-to-Z, and shut it out of the legislative calendar, Zeliff and Andrews responded by circulating a discharge petition for the plan. If a majority of the members of the House sign a discharge petition for a certain bill, that bill must be brought to the floor for a vote without amendments. Though A-to-Z had more than 220 co-sponsors, Speaker Tom Foley and Majority Leader Gephardt were able to threaten and cajole a handful of co-sponsors and prevent them from signing the discharge petition.

The result was a tactical win for the big spenders but a strategic loss. The A-to-Z plan became a populist touchstone, fodder for countless talk radio hosts. Zeliff will reintroduce A-to-Z in the 104th Congress, where it should get a friendlier reception.

An innkeeper whose pro-choice position led the conservative Manchester Union Leader to endorse his opponents in the 1992 primary and general elections, Zeliff's next target will probably be regulations, especially those that affect entrepreneurs. In December, he founded the Small Business Survival Caucus, a group of legislators that will work to reduce the size of the federal government by cutting taxes, spending, and regulations.

And if the new Congress changes the Superfund law, Zeliff will be one of the architects. The current law makes every polluter at a Superfund site potentially responsible for paying the entire cleanup costs, even if that company's actions were legal before Superfund was enacted. In the last Congress, Zeliff and another New Hampshire Republican, Sen. Bob Smith, co-sponsored an amendment that would have repealed the retroactive-liability provisions in the Superfund law and paid for cleanups by doubling the Superfund tax rates. Zeliff plans to reintroduce this bill in the new Congress.

The Democrats

For the Democrats, the 104th Congress represents every coach's nightmare - the rebuilding year. With a dramatically different and smaller team, Democrats have to figure out just what style of ball to play: suburban or inner city.

The suburbanites are corporatists who sag to the center, fighting broad-based tax cuts in the name of fiscal responsibility, favoring targeted credits and deductions, and supporting freer trade. The inner-city representatives, meanwhile, play a rhetorically rougher game, applying in-your-face pressure out on the fringe. They will continue to fight for income redistribution, race-based regulations, and urban pork.

Allies on many issues, both Democratic factions speak the language of business success, economic empowerment, and jobs. And both camps have politically savvy, outspoken representatives from California.

Rep. Robert Matsui (D-Calif.)

Despite Bill Clinton's weakened position, the president can still veto bills he doesn't like and will need friends on Capitol Hill to advance his administration's agenda. Had the Democrats retained i control of Congress, Sacramento native Bob Matsui might have supplanted New York's Charles Rangel and become chairman of the Ways and Means Committee. (Democratic leaders did not want two New Yorkers, Rangel and Senate Finance Committee Chairman Daniel Patrick Moynihan, in charge of the tax-writing committees.) Now that Democrats are in the minority, Matsui, an ideological ally of Chief of Staff Leon Panetta, may instead become the Clinton administration's biggest booster on Capitol Hill.

The White House chose the telegenic 53-year-old Matsui, rather than more-senior trade subcommittee members (the 74-year-old Sam Gibbons and the legally challenged Dan Rostenkowski), as its principal House spokesman for the North American Free Trade Agreement and the General Agreement on Tariffs and Trade. But taxes and spending, rather than trade, will dominate the new Congress. Matsui was an early supporter of the rate-cutting tax simplifications in the 1986 reforms. More recently, however, he has become a "Panetta Democrat" - a corporatist deficit hawk who believes in using the Internal Revenue Code to supplement government activism.

Over the past few years, Matsui has supported the use of the tax code for a variety of social-engineering endeavors - targeted capital-gains cuts, limits on employer-provided parking to encourage the use of mass transit, and tax credits for child care and wind power. He supported the administration's stimulus package and the 1993 budget deal.

Since the election, he has become a vocal critic of the Contract with America and one of the few legislators to oppose any tax cuts, including Gephardt's and Clinton's. Matsui argues that the 1981 income-tax rate cuts expanded the federal deficit and ballooned the national debt; he says a similar tax-cut bidding war today would cause the deficit to explode. In fact, the deficit was driven up by the military buildup and by spending increases in the types of programs Matsui supports - Social Security, Medicare, Medicaid, welfare, and other government intrusions in the marketplace such as job training and industrial policy.

Matsui's opposition to tax cuts may appear impolitic now. But it may eventually be echoed by Clinton, as spending advocates bombard the White House with demands for more money. Expect to hear the phrase Matsui now uses, "We can't enact any tax cuts we can't pay for," become a part of the administration's playbook in the coming months.

Rep. Maxine Waters (D-Calif.)

As a member of the California Assembly, Waters was a protege of Speaker Willie Brown, the most powerful and most feared politician in state government. She came to Washington in 1990 and quickly became the most prominent freshman in the House.

Outside her South-Central Los Angeles district, people have heard of Waters mostly as a result of two events: the 1992 Los Angeles riots and the House Whitewater hearings. In the aftermath of the riots, she blanketed television and radio talk shows as an apologist for gang violence, actions that have prompted Michael Barone, co-author of The Almanac of American Politics, to say Waters "speaks in the authentic accents of the street thug." As a member of the House Banking Committee, she also drew national attention during the Whitewater hearings when she repeatedly shouted, "Shut up," at Rep. Peter King (R-N.Y.) as he tried to question Clinton administration witnesses.

Despite her blustery demeanor, the 56-year-old Waters is more than sharp elbows and left-wing dogma. She supports programs to deter teen pregnancies and, unlike many inner-city legislators, plans to be more than a naysayer in the welfare-reform debate. In the state legislature, Waters was an important backer of the Greater Avenues for Independence program, better known as GAIN, which establishes work requirements for some welfare recipients. A former garment worker who earned a sociology degree when she was 32, Waters supports job-training programs that replace cash welfare grants with scholarship-like stipends to people who complete adult-education programs.

But Republicans promise to more than tinker with existing programs. The debate has now shifted beyond funding levels for food stamps to questions over what role, if any, Washington should play in anti-poverty programs. Republicans are now proposing giving states money to administer any programs they choose and otherwise getting out of their way. Waters will remain relevant in this debate only if Republicans fail to substantively slash welfare bureaucracies.

Waters is also a savvy politician. Previously a Jesse Jackson supporter, she endorsed Bill Clinton early in the 1992 campaign and co-chaired his California effort. She then distanced herself from him after he won the Democratic nomination, though not too far; her political support won her husband a post as ambassador to the Bahamas. And while Rep. Kweisi Mfume (D-Md.) seethed at Republicans for cutting off taxpayer funds for the Congressional Black Caucus last December, Waters brushed the matter aside. "We are, I think, wise enough and capable of raising the money necessary to keep this organization going and I think that's what we're going to have to do," she told the Los Angeles Times.

The money will presumably come from shaking down corporate donors. And Waters's seat on the Banking Committee could help provide her with access to guilt money from businesses. Look for her to relentlessly prod companies to confront two issues: economic devastation in the inner city and bank-lending practices that allegedly discriminate against women and members of racial minority groups.

The Western Senators

The new Republican majorities are dominated by members from the South and the West, and for good reason: Americans have been moving West for almost 300 years and South for at least 30. The COP must sweep both regions to retake the White House next year.

With their anti-welfare state positions, economic optimism, and morality-infused rhetoric, House Speaker Newt Gingrich and Senate Majority Whip Trent Lott represent the spirit of the suburban South, a combination of upward mobility and conservative Christianity. Western attitudes are slightly different: less genteel, more get-out-of-my-face. In both regions, however, voters are energized by issues that the Eastern establishment considers outside the bounds of civilized discourse, including the rights of property and gun owners. And beyond the leadership, the West is just as important - particularly in the Senate, where population density doesn't matter.

Sen. Larry Craig (R-Idaho)

Larry Craig, elected to the House in 1980 and the Senate a decade later, has been an early advocate of fiscal and regulatory reforms that later resonated nationally. During the 1980s, Craig relentlessly campaigned for a balanced-budget amendment to the Constitution. If Congress indeed passes an amendment this spring, the 49-year-old Craig may spend much of the next few years traveling to state capitals, lobbying legislatures to ratify it. That alone would make him a national figure.

He has a major obstacle to overcome first, however: getting the same amendment through both houses of Congress. A balanced-budget amendment runs the risk of becoming an excuse for raising taxes, rather than a mechanism for reducing spending. To counteract that effect, House Republicans promise to offer a version of the amendment that would require a 60-percent majority vote to increase taxes. Craig says that fewer than 67 senators would support such an amendment and that even debating the idea would waste time.

But if he and Senate Republicans insist on an amendment free of tax limitations, they could lose House support. And a balanced-budget-amendment-at-any-cost strategy that threatens to saddle taxpayers with ever-escalating bills could make the amendment harder to get through state legislatures, and far less effective at limiting the size of government.

When not plumping for the balanced-budget amendment, Craig is a leading advocate of regulatory reforms that appeal to grassroots voters in the West and beyond. The farmer and rancher replaced his former Idaho colleague Steve Symms as co-chairman of the Senate Property Rights caucus, which works to repeal intrusive government regulations or to enact laws that protect property owners from those restrictions. He is a principal co-sponsor of Sen. Phil Gramm's Private Property Restoration Act, a bill that would mandate compensation to a land owner when any new government regulation reduces the value of his property by 25 percent or $10,000, whichever is less.

Craig's vigorous advocacy of property rights has attracted national attention, making him the senator to call on the issue - even for journalists far from his Western home. In a December 25 article on the Endangered Species Act, Charlotte Observer reporter Heather Dewar quoted Craig's opinion that the act allows "malicious bureaucrats" to engage in "environmental extremism that has ruined the lives of ordinary people."

Most recently, Craig has cheered gun owners and more-traditional civil libertarians by speaking out against the excessive use of force by government law-enforcement agents. He is a relentless critic of the actions of federal law enforcers in the deaths of Vickie and Samuel Weaver, who were killed by government agents in a Waco-like raid on their home near Naples, Idaho. (See "Ambush at Ruby Ridge," October 1993.) Craig called for an official investigation of the actions of the Alcohol, Tobacco, and Firearms agents involved in the raid. The department absolved the agents of any criminal wrongdoing in the raid but, as of late December, had refused to publicly release its 540-page report.

If the report remains under wraps, Craig has asked incoming Judiciary Committee Chairman Orrin Hatch to convene hearings in which Attorney General Janet Reno and Assistant Attorney General for Civil Rights Deval Patrick would be questioned on the role of law-enforcement officials in the Weaver case. Such congressional hearings, to which Republican guru William Kristol has given the unfortunate name "show trials," drive news coverage by highlighting human drama. Using them to question government action, rather than call for more regulation, would mark a significant change in congressional dynamics.

Sen. Alan Simpson (R-Wyo.)

The six-foot, seven-inch cowboy was Bob Dole's favorite for Republican whip, a job he lost by one vote to Gingrich ally Lott. And Simpson's tongue is even sharper than Dole's or, for that matter, Gingrich's. For a story on the entitlements commission, I once asked Simpson about the onslaught he would face from seniors' groups because of his support for raising the Social Security retirement age. What about the National Committee to Preserve Social Security and Medicare? Simpson mentioned the group's president by name. "Martha McSteen," he said. "I'd like to boil her in oil."

Simpson's great sound bites guarantee him media prominence. And his favorite issues guarantee him a prominent role in coming Republican battles.

In the Senate, environmental policy is still in the hands of the Sierra Club - specifically its "environmental hero" John Chafee, the patrician Rhode Island Republican most famous for his support for nationalizing health care. In the 103rd Congress, Chafee joined green Democrats to block proposals making wetlands and other land-use policies friendlier to property owners. Chafee now chairs the Environment Committee. Simpson's assignment: to check Chafee.

Simpson had angled for the chairman's job himself, though Chafee was first in line by seniority. But he was defeated before he began, not by Chafee, but by Jesse Helms. Once the North Carolina senator started shooting his mouth off about Bill Clinton's weakness as commander in chief, the only way Dole could avoid a messy fight over Helms's chairmanship of the Foreign Relations Committee was to declare strict seniority in force - and that meant Chafee stayed.

A December 19 Washington Times story reports that conservatives have strong-armed Chafee to such an extent that he has privately agreed to not impede property-rights and "sound science" reforms in his committee. But if Chafee starts cozying up to the Natural Resources Defense Council, it will be up to Simpson to forge bipartisan coalitions with Southern and Western Democrats on land-use policies.

Simpson also plans to speak early and often on immigration - an issue he has called "red hot." He was an architect of the 1986 immigration reform act, which established sanctions against employers who hire undocumented workers. He favors tougher border patrols and some form of "tamper-proof" identification documents for all workers. But he opposes cutting off education and medical benefits to the citizen children of illegal immigrants, and unlike other conservatives he would not deny government benefits to green-card holders, telling The New York Times that "the only thing they can't do that you and I can is vote. Period."

Simpson may sound like a moderate on the subject, and that's the way he portrays himself. But he promises to stir up all sorts of trouble with his proposal to reduce the number of legal immigrants by 25 percent over the next five years, to 500,000 legal entries annually.

With much of the concern over immigration driven by law-and-order sentiment, that's a prescription for disaster. Immigration quotas, like import quotas on cars, are market-disrupting laws that seek to raise the price of a domestic product (in this case, labor) by keeping out foreign suppliers. But here products can walk across the border on their own; the buyers often have no domestic suppliers; and quota-driven shortages encourage ever greater law breaking. People concerned that illegal immigration erodes respect for law have two choices: raise quotas to something approaching a market-clearing level, or adopt a zero-tolerance policy. (The easiest analogy to understand, especially in the West, may be the 55-mph speed limit. If you want to encourage obedience to the law, you either raise the limit to a level appropriate for conditions or slap a huge fine on every other driver.)

Merely cutting legal quotas does nothing to encourage people to obey the law; in fact, it's likely to have the opposite effect. Perhaps 1.2 million persons enter the country, legally and illegally, and stay every year. Unless the Immigration and Naturalization Service can dramatically accelerate the number of persons it deports - and it deported only 20,000 persons in 1993 - Simpson's restrictions would create as many as 700,000 new law-breaking immigrants every year.

Theoretically, they could be sent to prison. But the United States currently has space for one million prisoners. To be effective, the Simpson plan would require the nation's prison capacity to double every 20 months - and that won't happen.

And while most illegals would never go to jail, a lot of employers might. Assuming the government enforced Simpson's immigration caps, law-enforcement agents would conduct frequent raids on businesses to check for illegal employees. As a result, employers would face constant harassment from federal officials, the type of regulatory burden Republicans say they oppose. Indeed, Rep. Lamar Smith of Texas, the Republicans' lead man on immigration in the House, has pushed for extending the Racketeer Influenced and Corrupt Organizations (RICO) law and asset-forfeiture laws to cover those who smuggle or harbor illegals. That could unleash the same regulatory terror on employers and landlords that OSHA and wetlands enforcers engage in now. We'll know how serious Republicans are about slashing the regulatory state if they ignore the Simpson/Smith positions on immigration.

Rick Henderson is Washington editor of REASON.