Bush Forges Ahead on Policy Plan

Monday, January 8th 2001, 12:00 am

By: News On 6

AUSTIN, Texas (AP) â€” President-elect Bush is forging ahead with his policy planning, but new questions about Linda Chavez, his choice for labor secretary, are giving Democrats new ammunition for upcoming Senate confirmation hearings.

Bush was devoting his efforts Monday to the military, meeting with a bipartisan group of congressional leaders to discuss plans to modernize the armed services and develop a missile defense system.

But his aides were left to deal with the disclosure that Chavez provided housing and financial aid to a Guatemalan woman, in the United States illegally, who lived in Chavez's Maryland home in the early 1990s.

The woman, Marta Mercado, told The Washington Post she told Chavez of her illegal status about three months after moving into Chavez's home in late 1991. ``I really was not an employee,'' Mercado said, adding that she considered the occasional $100 or $200 given her by Chavez to be Chavez's way of showing appreciation.

Chavez told the Post: ``If someone came to me needing shelter and needing a helping hand even under the same circumstances, I would try to help them.''

Ari Fleischer, a Bush transition spokesman, said Monday that Chavez ``has a history of taking people in. America has a long history of taking people in ... the church community often does it and it's looked upon as act of compassion to help people in need.''

Fleischer said that disclosure of the case, first reported by ABC News, was a normal part of the vetting process. He said there was no comparison between this case and that of Zoe Baird, President Clinton's early choice for attorney general, who failed to pay Social Security taxes for a nanny she employed.

``We see no reason the Senate will come to the conclusion that it's identical to the Zoe Baird case,'' he said.

Fleischer said Chavez did employ household helpers and ``she paid their taxes.''

Tucker Eskew, another Bush spokesman, said a friend of Chavez asked her to ``take the woman in and provide shelter and she did so as an act of charity and compassion.''

He said Bush ``has absolute confidence not only in Ms. Chavez, but as to her ultimate confirmation.''

Democrats questioned whether Chavez was fit for the job of overseeing the nation's labor laws, and they promised to examine the case during her confirmation hearings. The hearings already were likely to be contentious because of the nominee's strongly conservative stands on affirmative action and other issues.

Meanwhile, Vice President-elect Dick Cheney, Defense Secretary-designate Donald Rumsfeld and Condoleezza Rice, Bush's choice for national security adviser, were joining Bush in Austin for discussions with lawmakers about updating military equipment, training methods and defense technology.

``Strengthening our military is one of my top priorities,'' Bush said.

During the 2000 presidential campaign, Bush and Cheney, who as defense secretary under Bush's father oversaw U.S. strategy during the Persian Gulf War, were critical of the Clinton administration's handling of the military. They said troops were overcommitted to peacekeeping missions abroad while defense budgets were cut back.

Bush has proposed spending $20 billion more for weapons research and development and $1 billion more a year for a military pay raise. He also favors developing a missile defense system.

He promised that, once in office, his administration would review all peacekeeping missions â€” he has said he wants to reduce troop strength in the Balkans â€” and would make an overall assessment of the nation's armed services to determine where investments should be made. Cheney will have a leading role in that review, aides have said.

Bush invited eight Republican and six Democratic lawmakers to Monday's meetings. They included Sen. John Warner, R-Va., chairman of the Senate Armed Services Committee; Sen. Carl Levin of Michigan, the panel's ranking Democrat; Rep. Bob Stump, R-Ariz., incoming chairman of the House Armed Services Committee, and Rep. John Spratt, D-S.C., a senior committee member.

Chairmen and senior members of House and Senate Appropriations defense subcommittees will also be on hand, according to the Bush camp.

Absent from the list of attendees released by the Bush camp was Sen. John McCain, R-Ariz., a senior member of the Senate Armed Services Committee and Bush's former rival for the Republican presidential nomination.

Bush aides said only chairmen and the most senior members of the committees were invited.

The president-elect and his wife, Laura, spent much of Sunday finishing their packing at the Texas governor's mansion. The Bushes will live at their ranch in Crawford, Texas, two hours from Austin, until they move to Washington a few days before Bush's inauguration Jan. 20.