This wont help you because its not very original, but theres something about President Clinton that had the effect of rubbing salt on a wound as far as his opponents were concerned. I had known him just slightly. Just be sure it doesnt collapse during the interim. We had a macro economic task force. So an hour before the vote is when we heard that we probably had his vote. His first term wasnt so good, but his second term was wonderful. I dont have any better thoughts on that than anybody else as to what it is about President Clinton that did that. He also had primary responsibility for Blackstones international business. The following MondayI was out West actuallyI flew back to Washington and I believe I resigned on Wednesday. That is foolish because history provides lessons on these matters. I was an Assistant Secretary, I had a few meetings with President Carter but not that many, so I wasnt familiar, But it was not the way you would organize, and one wonders, Mack McLarty was the Chief of Staff at the time and came out of a business. Of course that depends on the moment in question. I dont mean that facetiously. If anything comes to mind that we havent talked about, that youd like to have included. We had so much going on that Bentsen asked me if I would just, on an interim basis, serve as interim chairman of the RTC. But youd been doing transition work for a month. While I never agreed with a single thing that President Reagan ever said, I have to grudgingly concede him that. In the very beginning it wasnt as availed of, as it quickly became availed of later. I was not. Did it succeed? So a group of us at the deputy level, Joan Spero, Charlene Barshefsky, Bo Cutter, me, who were the four senior members of that group, started entering into discussions with our Japanese counterparts. So he remained alive and, as we all know, recovered. Its always a mistake to critique the Federal Reserve. Exactly. That was just an amazing experience. Then about three weeks later I was testifying as a regular matter on the RTC, I guess it was semiannual oversight hearings on the RTC, and Senator Gramm or Senator [Chris] Bond, Senator Gramm I think, asked me if Id had any contact with the White House about this whole matter. I was often, or at least periodically, talking to members of the administration but not to the President. He was not confronted with a grave crisis, but I think history will treat him very well, because essentially. Ill give you an answer but Ill preface it by saying Im not sure my memory is quite right here. I guess I probably began to help raise money, its a rough memory now, in the early fall, perhaps September of 91. Well, how do you know? We had some serious issues with the IRS. Yes, but I dont think he thought it was going to be as tough on the Democratic side as it turned out to be. It got more organized as 92 unfolded. So maybe among the so-called populists there was a lot of anxiety as they saw this axis, the Bentsen-Rubin axis, develop and recognizing that both were relatively conservative. Because it promotes a lack of confidence in financial markets and, for that matter, a lack of confidence in the business community, a sense that that administration doesnt know what its doing. Panetta had made a very distinguished career as House Budget Chairman out of pushing for lower deficits and a more transparent budget process. The election took place on the first Tuesday of November. Japan accepted a series of goals that we wanted them to accept, but the teeth, in terms of enforcement, werent there. They have made changes in policy, its not as though theyve stood still. There was some action forcing the schedule and the President would have had to ditch the treaty, just say, Ive decided Im not for it. He was very disciplined and he went to bed at a certain time and he went home. I then had the brilliant ideaIm saying this, obviously sarcastically, that I should inform the White House what those procedural alternatives were. Fourth, I recall that the economic forecasts for 93 were not very heartening. If were talking about 1991, I think his ideas were in formation. So essentially you would not have been involved in any of the crafting, I guess, you basically were given an agreement and it was a question of just lining up the votes at this point. That was in recognition of that. WebNot only are 10% of the U.S. House and Senate Jesuit-trained from Georgetown, but so are many of the world's political leaders, which should have you asking What are they really up to?" Weve all seen this happen often in Washington. You would have thought Senator Bentsen would have felt that way also, unless there was an assumption that this was literally going to be a few weeks time. As a Democratic President however, he could have vetoed the bill and it would have been sustained by Congress. My point is, I thought the whole discussion had a considerable impact on Clinton, as did scores of others along the way after that. I didnt think it was going to be that bad. I want to come back to something that we had touched upon earlier, and that was this question about the administrations prioritizations, because you had suggested that there were some internal discussions, even at the time that NAFTA was taken on, as to what to do next. But its been shown before that if you can be to the right of center while still being seen as a true Democrat, its more effective, and Clinton did that. Can you give us a picture? On preparing a whole set of materials and otherwise paving the way for Secretary Bentsen to walk into his office and be fully prepared to function from the first minute. Did Senator [Edward] Kennedy figure at all as a help or a hindrance or what in the budget battle, he wasnt really a key player? Of course, by November 94, many of the benefits of this program had not yet evolved. I sat next to Mrs. Clinton at dinner. They were taking, to some degree, a thousand-year view. Is the existence of a war room something. Did you stay in Little Rock for a while afterward? Kerrey made a quite dramatic speech, rather excoriating Clinton, urged Clinton to get back on the high road and so forth and then cast the vote and Gore cast the tie-breaking vote and thats how it happened. In that regard, I would guess that your background on Wall Street was a big help in terms of talking with these members and having a rapport with them that they would feel comfortable with? But it wasnt political on one hand, policy on the other, just different ideologies. But, I can tell youa bit of a digression. It was Clintons first, if I recall correctly, major international summit. Then maybe half of them we discussed about this person, that person. Im an economist in the Brookings Institution in Washington. So it could be revived again tomorrow. I think it was obvious to Clinton that there were several serious people there in New York whose support he wanted to get who felt strongly about what I would call a centrist economic policy, perhaps right of center economic policy. My assumption is that you must have been doing that from two perches, your first perch being in the Treasury Department and then eventually the war room was opened up, and then you at some point were moved into the war room. So it was a combination of an organized role. And, of course, the ATF agents didnt know what they were going to experience and he found himself exposed to an open line of fire. Its improved a lot since then, now become of course one of the leading universities in the country, but it was not at that time, in fairness. Can you tell us about how that unfolded, your perceptions of Mrs. Clintons role in all of this? There were some folks from the White House Press Secretarys office who were in it. Hes chancellor of the Board of Education of New York, hes a good friend of mine, and I had dinner with him about a month ago and I said, Does it make any difference who the President is as far as youre concerned? Once you get NAFTA behind you, my guess is that there were further discussions at that point about what ought to be next and this is when healthcare becomes a priority. Do you have any recollections of seeing anything different in him as a candidate at that point for that position? So two points: one, I support what the President did and I think he deserves a lot of credit for it. He never did anything spontaneously, at least professionally speaking. My memory is a bit fuzzy on that. Well take a break for lunch here in just a minute, but I want to jump track and ask you one set of questions about your own responsibilities within Treasury. Did it come from DAmato, or what? Mrs. Bentsen responded. Chicago, of course, always has been, and they attracted very different students. In 1991 it was not organized. She inspired, continues to inspire, fierce loyalty and he doesnt. Carter had his famous Pond House meetings, and I went to a couple of those. I also told him, which was quite a mistake, that I was thinking about recusing myself from the case because I realized that there was such a conflict here between being a member of the administration on one hand and being a Federal regulator on the other. Stephanopoulos was there and Sperling was there. And it turned around and by November 84 as you remember, it was Morning in America and he won 49 states. I was just in awe of people like that. Of course, we were in a different time zone, 12 hours different. It was going to be a different kind of animal. Everything imaginable. They just didnt believe it would work. He said, I know this will be hard, but I think I can get those folks. Am I misremembering, did the President invite Mr. Greenspan, to sit in the gallery next to his wife when he delivered his economic policy. What political or personal characteristics does she have that he doesnt have, what does she bring to the. I think my point is slightly different. He would explain to me the problems with the particular pieces, but, I dont know if you had to be Bentsen, did you? You sit down with the leaders of your own party in the Congress, ultimately with the entire leadership, and then you learn a little bit about the realities that you face from the legislative point of view. But a very useful one. Eventually they did, but it wasnt because of this agreement, big macro forces had them do it. There are too many people in his own administration, at least at the moment, who think that all he finally did was succumb to the Republican position, and anybody who wore a D on his shirt and supported the Republican position could have brought along enough Ds to make the bill happen. Lets hold off if we can just a couple of minutes before getting into the transition period and let me ask you a couple of questions about the campaign itself. But when youre in the administrationI mean, as you well know, there are many on the more liberal side of the Clinton alumni who think the administration basically adopted the Republican position on welfare reform and that was what enabled it to happen, and anybody could have done it and Clinton doesnt deserve a lot of credit for it. A few questions about that. We assembled Carter and Ford and George H. W. Bush, and various other luminaries, Jim Baker, [Henry] Kissinger and so forth, to project a bipartisan front on NAFTA and Clinton gave the speech of his life. I mean, it was a larger package as it was originally conceived and then. Id had served before and seen how not to do it. He created a big expectation with that speech that he gave I think in the fall of 1993. He knew what was possible; he knew what wasnt possible. For one reason or other, Clinton developed some very powerful antagonists in the press, most notably Howell Raines of the New York Times editorial page, and the New York Times treatment of Clinton became a virtual industry unto itself. It was sort of all-encompassing. The country needs it, the Democratic Party needs it, I need it. I attended the little thing at Monticello when he was on his way to be inaugurated, the first time he stopped by in the bus. I got involved in certain aspects of preparing it, editing it, fine-tuning it, I recall that. Anyway. So anyway, within a few days, all of us who had anything to do with the RTC from the point of view of the Treasury were subpoenaed by Fiske. He said, What do you want to do? I was the class of 1967 and he was the class of 1968. I mean, the worst recession since the Great Depression occurred in 1981 and 1982 and in the fall of 82, in early August, Reagan was being described as Herbert Hoover, politically dead, gone, might as well already make his reservations back to Santa Barbara and so forth. But apropos of my comments earlier that classic, unreconstructed liberalism had never been my cup of tea, I never identified with Mario Cuomo. It wasnt as simple as that, lay the groundwork for a new agreement. Now we became aware pretty early that there were some real problems with this proposal. I didnt know what to expect. Presidents should be presented with options that have been carefully developed, really carefully vetted, and those options should be written down in the usual way, and that wasnt the case here. Clinton gave his State of the Union address, the 28th of January, eight days after being inaugurated. To bed at a certain time and he was not confronted with a single thing President. 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