(Controversial bill puts White House in chaos)

Washington--Faced with a barrage of protest, President Bush retreated on Thursday from a White House plan to roll back longstanding federal policies that promote the hiring of women and minorities.

The reversal came even as Bush signed long-delayed civil rights legislation that he said "will fight the evil of discrimination."

A firestorm of criticism greeted reports late Wednesday that Hush planned to unveil directions to the federal bureaucracy to abandon guidelines authorizing the government and private employers to use affirmative action programs to attack discrimination in the workplace.

The disclosure could not have come at a worse time for the White House. The incident further strained racial tensions already inflamed by the David Duke gubernatorial campaign in Louisiana, Clarence Thomas' nomination to the Supreme Court and the yearlong squabble that preceded Bush's acceptance of the civil rights legislation.

Some senior administration officials said that the controversy demonstrated the chaos that has gripped the White House as Bush's poll ratings have tumbled and as chief of staff John H. Sununu has become distracted by the pressures of the president's budding re-election campaign and criticism of his own performance.

In a statement prepared for Bush to read as he signed the civil rights bill into law, the president would have instructed government agencies to abolish the Uniform Guidelines on Employee Selection Procedures, which spell out what private companies must do to comply with federal anti-discrimination employment laws.

Public disclosure of the planned directive and the resulting criticism from civil rights advocates and legal experts prompted a series of hasty meetings among White House officials, late- night telephone

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calls and conferences with the president.

The plan, advanced by C. Boyden Gray, the president's counsel, was withdrawn on Thursday morning, only hours before it was to have been unveiled.

Instead, Bush recommitted himself to the principle of affirmative action. He pledged that "nothing in this bill overturns the government's affirmative action programs" --a statement added to his text shortly before be spoke in an effort to calm the controversy, a senior White House official said.

Twice, the president told an audience of government officials and a smattering of civil rights leaders summoned to the Rose Garden: "This is a very good bill."

Nevertheless, Democrats and Republicans seemed almost shocked by the White House performance, and one senior White House official complained, "It's obviously a very big screw-up."

Benjamin Hooks, executive director of the NAACP, said he would have boycotted the ceremony m the Rose Garden had the controversial material remained. "If I were the president, somebody's head would have to roll," he said.

One of Bush's allies, Sen. John C. Danforth, R-Mo., said that if the administration had not retreated, the new approach "would have totally eclipsed the law that was signed" and would have become a "major political issue" in the 1992 presidential campaign.

The bill Bush signed overturns six Supreme Court rulings and makes it easier for workers to win anti-discrimination lawsuits. It also extends to women the right to collect damages of up to $300,000 for sexual harassment and other discrimination in the workplace.

For months, Bush had opposed similar measures, asserting they would force businesses to use hiring quotas. He vetoed more far-reaching measures earlier this year and in 1990. But lour weeks ago, responding to the vicious fight over the Thomas nomination, the aggressive campaign in Louisiana of former Ku Klux Klansman Duke and the prospects of a third angry veto fight, he and congressional leaders found grounds for compromise.

But that sudden tenor of harmony evaporated literally overnight after a draft of Bush's statement was circulated, according to White House spokesman Marlin Fitzwater, to about "50 or 60" people in the late afternoon. He said at that point, Bush was unaware of the material in the statement.

Almost as soon as copies of the proposed statement were sent by facsimile machine to the various federal departments and agencies, objections were raised. They were first brought to Bush's attention by Sununu shortly after they returned to the White House about 9 p.m. from a Washington hotel, where they had attended a million-dollar fund-raising sing dinner for the president's still-unofficial re-election campaign, senior White House officials said.

Sununu had been alerted to the controversy when White House officials were unable to resolve arguments among themselves on Wednesday evening and called him at the dinner.

As portrayed by several senior officials, however, the opposition expressed by officials beyond the White House was unanimous.

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Secretary of Labor Lynn Martin "had a strong reaction to the memo as drafted, a very, very, very strong reaction," one administration official said. Early Thursday morning, the official said, Martin called Gray at the White House and told him "her strong feeling that this did not reflect the president's views, that this was not consistent with what she understands the president to believe," the official said.

Despite the furious backpedaling, several officials said that the retreat may have been only temporary and that they did not think the issue had been dropped for good.

"Maybe the timing was wrong," said one official who ended up on the losing side of the argument. But he said, "We are going to have to change some of the rules and the guidelines. There's no doubt about it."

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