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All of President Clinton's difficulties in devising a strategy for dealing with a Republican-controlled Congress have come to a head as he and his top aides struggle to draft the administration's fiscal 1996 budget request.

With congressional Republicans promising a balanced budget by 2002 and huge tax cuts, the president is groping for an alternative economic-policy agenda that matches his opponents' boldness without spurning Democratic allies or damaging his reputation for honest budgeting, administration officials said.One administration official described the process as "a complex simultaneous equation" that is forcing Clinton to make politically painful choices about myriad issues from health care to welfare reform to deficit reduction to tax policy.

While Clinton has yet to make any final decisions about the budget - one of the first proposals he will send the new Congress - he appears to be leaning toward trying to do a little bit of everything: embrace modest tax cuts and a smattering of new programs and fund them with highly visible, but limited, spending reductions, according to officials who have participated in a series of marathon budget meetings over the past two weeks.

Some officials fear that such a split-the-difference approach will look like a watered-down version of the Republican agenda to voters, cementing Clinton's image among his detractors as the Great Equivocator.

Clinton has urged his aides to devise a spending plan - which congressional Republicans are likely to reject as soon as it is sent to them - that would clearly define his administration.

At the end of a meeting last Monday, Clinton stressed the importance of including only things "we really believe in . . . Our standard for everything can't be getting re-elected. Our goal should be to have something that shows what we believe in and to make sure than everyone who votes against us knows exactly what they are voting against," one official recalled the president saying.

"The tenor of the discussion has been very bold," one Cabinet member said in a telephone interview Friday.

Above all, Clinton has stressed that the financing in his budget must be credible. "We will put forth a budget that is very fiscally responsible," said Office of Management and Budget Director Alice M. Rivlin. "There will be no smoke and mirrors, no rosy forecasts."

"We've made a decision that we aren't going to play any games," said one official. "That makes it hard. No matter what we do, our overall numbers won't be as impressive as what the Republicans will be claiming."

The hope, officials said, is that over time, voters will view the economic promises at the heart of the Republican agenda as unrealistic and credit Clinton for speaking truthfully.

A senior official said the "working assumptions" are that the president will propose a middle-class tax cut of $40 billion to $50 billion over five years, and modest increases in spending on defense and social programs, including some new initiatives such as a program to help ease the burdens of immigration in politically strategic states such as California.

Clinton is likely to propose funding those initiatives with the termination or drastic reduction of a limited number of high-profile government programs or agencies, according to aides. Closing the Interstate Commerce Commission and closing a host of agricultural field offices, for example, are among the cuts under consideration.