For months, the idea of a new, liberal "third way" has been dominating media analysis. Supposedly, leftist intellectuals have learned from the collapse of communism and the Babbittry of Reaganism that there must be a third way between non-compassionate market capitalism and welfare socialism, to avoid both "extremes." The proof is the two-time election of Bill Clinton and his clones in Europe such as Tony Blair and Gerhard Schroeder. But it is just old crock wrapped in new bunting.

Welfare state liberalism, from the New Deal through the Cold War, has always viewed itself as this "reasonable" middle ground between capitalism and socialism. For one example, where the case was made precisely in these terms, try Robert A. Dahl and Charles Lindbloom’s classic "Politics, Economics and Welfare," published as "recently" as a half-century ago--with references to a prior 50 year gestation period for its intellectual predecessors. This idea is so fresh it inspired Franklin Roosevelt and Lyndon Johnson to create all of their now bankrupt, failed and even destructive programs--whose collapse in 1980 led to the Ronald Reagan revolution. His successors did not learn something new but merely advanced the logic of his own proposals. That is why all three keep moving in the direction of the market and local solutions, not to socialism.

Still, there is this sense that the left is gaining and the right is confused. Even one of those who had led the moral battle against the "inordinate increase of public agencies that are dominated more by bureaucratic ways of thinking than concern for servicing their clients" under the welfare state, seemed recently to retreat from this message. Pope John Paul II, in his document "The Church in America," issued on his five day trip here in January, criticized the growing influence in this hemisphere (widely viewed as emanating from the United States in the 1980s) of "neoliberalism," a "purely economic conception of man" based only on "profit and the law of the market," which leads "to the neglect of the weaker members of society." Likewise, there were exhortations to cancel poor nations’ debt, end the arms buildup, eliminate the death penalty, end racial discrimination, and to welcome even illegal immigration.

But the left has over-interpreted what he said. The document was not authored by him but by a synod of bishops from the Americas and then commented upon and signed by the Pontiff. It would have been immensely provocative for him to rewrite the whole document from what is a powerful but often liberal hierarchy--some of whom he had condemned a few years earlier for flirting with Marxism. So he downgraded the document’s status from encyclical to "exhortation." Moreover, he pointedly modified it by adding that "love for the poor must be preferential but not exclusive," criticizing neglecting the rich (i.e., the "leadership sector")! Likewise, he highlighted the corruption of many governmental solutions and recommended the formation of individual consciences and individual renewal as the "best antidote." He set education as the priority for fighting poverty and identified state monopoly education "as a form of totalitarianism" blocking reform, recommending new private, religious and local solutions.

A hardy band of Congressional Republicans, called The Renewal Alliance, took up the challenge of new more individualistic solutions by issuing an initiative at a recent Capitol press conference consisting of a Charity Empowerment Act, an Educational Opportunity Act and a Community Renewal Act. The Charity Act would create a state-based charity tax credit to fund churches, charities and other private institutions performing welfare functions so they could replace crushing state bureaucracies in providing needed services to the poor. The Education initiative would support state and local public and private school scholarships, vouchers and/or tax credits to "spur the competition necessary to improve public education," and establish expedited waivers to free local authorities from Department of Education regulatory burdens. The Community Renewal Act would remove regulatory burdens and create tax incentives to assist in the physical renewal of local communities.

The Charity Empowerment Act, especially, is enormously attractive to those who want to replace bureaucracy with private and community welfare. It provided the central proposal of a book, "Does Freedom Work?," written by your reporter way back in 1978, when he was an egg-head professor. But the proposal was subject to the objection of why the national government should be involved at all? The attraction of the Alliance proposal is that the states would completely administer the credit (and there are tricky issues such as the definition of what constitutes a welfare charity, that are best solved there), and the states would have full choice whether to adopt it or not, under an already existing grant. The Charity Act would provide new liability protection for business contributions of property to charitable organizations and allow faith-based charities to compete for government contracts under six additional bloc grants. But the charity tax credit is fully funded by existing grants, using up to 50 percent of the money from seven welfare block grants for private activities. As Alliance co-chairman, Sen. Rick Santorum noted, it is consistent with a national flat tax because it moves the tax credit to the state level.

It is difficult not to notice that social welfare has improved in recent years. But the third way phenomenon is too recent to deserve the credit. Teen-age pregnancy rates outside marriage are down 12 percent since 1991. The American Freshman survey found that support for casual sex outside marriage declined from 52% support in 1987 to 40% in 1998. Princeton Survey Research Associates conducted a poll, paid for by the shocked good ladies of the tres liberal Center for Gender Equality, which found that a majority for the first time thought abortion should be illegal at least under some circumstances and that most were religious (while 41% thought the conservative Christian Coalition improved the lives of women verses only 18% who thought they did not and even the "repressive" Catholic Church was seen as improving lives by 48% and worsening them by only 13%). The hard data show the same for the whole population. Crime declined seven percent in 1997, to its lowest point in 24 years. The number of welfare recipients, illegitimate births generally, and abortions have fallen for the first time in years. Volunteering for charity has doubled since 1977. These are massive and positive changes, but they did not happen overnight but were the result of years of incremental changes beginning in the 1980s.

Yes, Bill Clinton gets some of the credit. While discussing his latest imbroglio, my cabdriver--after defending Big Bill as much maligned--almost offhandedly concluded: Abut I do notice now that ‘brothers’ who have been fooling around are breaking off affairs for fear of reprisals from disgruntled old girlfriends." This might not be the most perfect reason for virtue but these days, who can complain? More seriously, Mr. Clinton has moved his party, and thus the nation, to the right. But he has done it--reluctantly and grudgingly--by following what Ronald Reagan initiated, not by creating any new third way.

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Donald Devine, former director Of the U.S. Office of Personnel Management, is a columnist and a Washington-based policy consultant and a Vice Chairman for the American Conservative Union.