Then there was the other dynamic, which istheir personalities could not have been more different. I think less well than he was treated while he was in office. Was that true of Georgetown at the time that you were there? More in terms of ostracism from your former colleagues. But in any event, the cooperation in both cases was optimal. That is foolish because history provides lessons on these matters. Oh sure, sure, well have another major Presidential uproar. So I had that meeting with Clinton. Theyre going to ask you about it, say nothing. Very, very intensive, one of the most intensive things Ive ever been involved in. He was not confronted with a grave crisis, but I think history will treat him very well, because essentially. At best I had an input, and in some cases it was just obvious that some of these other folks had to be in it. Do you recall in your conversations with Senator Bentsen, were there missed opportunities for developing a more bipartisan atmosphere in Washington at this time, or was it pretty much just a foregone conclusion that because the Republicans were now completely in the minority that they were going to obstruct from the outset? Yes. Its always a mistake to critique the Federal Reserve. Well, we were talking about lasting changes. So its really a role that varies from Secretary to Secretary in terms of what that Secretary wants, and thats just a history of it. I left the White House around April, took a couple of months off, and went back to New York. We recommend you to check the complete I should have realized I was stepping into a potential mine field but I didnt, although I do have to say that I called my lawyer and asked him if there was any reason I shouldnt take this and he said, Yes, there are about 200 reasons. If you think about who are almost universally considered the three or four greatest American Presidents, they all faced enormous crises, of course Lincoln, [George] Washington, FDR [Franklin Delano Roosevelt] and so forth, and Clinton didnt. He doesnt even know about the advent of optical scanners in grocery stores, and that was the theme, that was THE central theme as codified, so to speak, in [James] Carvilles famous comment, its the economy, stupid. But the burden of my question was it would be a lot of the people whod voted for the economic package that youre putting in this position, right? If you look at the organization chartIm not sure its the same now, but you have the Office of the Secretary of the Treasury, and the Deputy Secretary is part of the office. So it was job one, so to speak. I think everybody has a different calculation. I mean, by that time, the group that was advising him on economic policy had become reasonably well set. My opponent is distracted by international and other matters. There were so many exceptions and carve-outs and so forth from the final bill that you couldnt count them. The thing was televised, nonstop. I dont think I would have known otherwise. On the policy issues at this point are you beginning to see any kind of evolution or any kind of establishment of governing priorities, or again, is this a question thats held off on until after the election? I was not. In the initial phases it was really broad strategy because we didnt yet know. But as to whether it was an innovation, I doubt it. So Ira was, to some degree, as youve read thousands of times, off in the corner doing this whole plan. It wasnt as simple as that. A fairly major effort went into that, which I was part of. No, I was responding to a question about economic policy. It will be differences of style, differences of perception. They had a very unsuccessful discussion, which resulted in name calling and cursing. I mean, wow, but an odd personality. Some of the cookies we use are essential for parts of the website to operate and cannot be switched off in our systems. I was to call Bentsen promptly. You had made your choice to support him before it was clear that he was going to wow a lot of people in New York. Senator Kennedy was for it from day one. I hope he does. Bob Rubin never uttered a single syllable except of friendship and support of President Clinton. Im not sure anyone is ever going to pay a penalty in American society for that type of commentary. But there sure was a lot of effort going into it. But an awful lot of people love being Cabinet officers and leave only most reluctantly. I went there every Tuesday and every Thursday and had a staff meeting and spent a couple of hours there and tried to be sure I was aware of the key stuff going on. You know, she made comments like I could have stayed home and baked cookies but I decided to be a real person, which served to severely antagonize a lot of traditionalists. I wasnt sitting all by myself with him, but sure, there were various opportunities to be in relatively small groups with him. Is this time for horse-trading? Did he come to you with an idea about what he wanted to focus on with the economy or some of his primary domestic policies, or was this at this point still in the process of being formulated? I also learned that when I saw that, it wasnt likely to ultimately succeed. So I would get, from Mike Levy, typically, what my assignments were. So it wasnt invisible. But my guess is that those kinds of. Ford actually attended regularly, I dont mean every day, but regularly, and it was just a version of what Clinton did. I believe, as I say, it was either the day of or the day after Gennifer Flowers had given her press conference. Bentsen was just a legend and Clinton had never served in Washington and Lloyd Bentsen was a king of Washington. I think it counts for four, five percent of the spending. Theres some story that he demanded a commission on entitlement reform as a price. My own view on that is that American history is filled with examples of severe and indeed brutal partisanship. Then we had the meeting downstairs in the Governors mansion, in a study or a library, the same room actually wed been meeting in on Putting People First a few months earlier. Certainly, when he captained it, it was a different party than it had been for the previous 50 years. Exactly. And I dont have any different set of reactions than anyone else watching the thing at the time. Had there always been a sense on your part that your likely posting in the administration would be in Treasury or. Had it always been assumed that Rubin would take that position? But, no, they couldnt have been more cooperative. At my sons school, on the floor where the history department is, each President gets a little tiny picture and about two lines. The hearings ended around the fourth or fifth of August and it was now the seventeenth or something. If you can think of a great President, a President who is seen as really great, who didnt have such a crisis, Id like to hear it, because I dont think there is one. You referred earlier to Garys question that most of the decisions that Clinton made about his priorities came post-election, but the process. Youve already mentioned the people who were attending that particular meeting. Maybe there was, I wasnt privy to that or exposed to that. Was it his personality? Were now in the pre-election period. Carter had the famous $50 rebate, which became the object of much derision ultimately. I remember the very stirring tableau as you may remember, the Clintons and the Gores came out onto this beautifully lit portico and there were, it seemed, thousands of people on the street in front of them. Now streaming on: Powered by But he did give a big speech about healthcare before NAFTA came to a vote, right, as I recall? Weve talked about the general idea that the administration was going to accept pain by having deficit reduction in the early years, but theres still the question of how youre going to mete out the pain. Well, there was, like most administrations, kind of a running shakeup. You say he didnt inspire fierce loyalty amongst a lot of his subordinates, but interestingly, I think a lot of the senior Cabinet members lasted a long time, I mean, they stayed for muchDonna Shalala was Secretary for eight years, Rubin was in for a long time, given the fact that his family didnt move to Washington. By and large, most of the members of the Finance Committee in the Senate and the Ways and Means Committee in the House. That happened, I want to say, late 93, that his nomination was effectively killed. That notion took hold at that meeting. I was on the board of the Childrens Television Workshop, now called the Sesame Workshop, the entity that produces Sesame Street and related childrens programming. No. Bentsen never lost an election, period, on which he was head of the ticket, ever. So I think Clintons own behavior did play a role in it and that in retrospect there would have been better ways for Clinton to have dealt with some of these things. That was not clear to me. So that, despite the extraordinary achievement it really was, I think may be seen by history as a small achievement. Bob Rubin talked with great credibility about the bond market responding, and James Carville was so amusing for so long afterwards saying he wanted to come back in his next life and be the bond market because everybody paid such fealty to it. I didnt, no. He said, I know this will be hard, but I think I can get those folks. and I had no previous knowledge of it at all. By continuing to browse, you agree to the use of Evercore's cookies. I didnt have a background in healthcare of any kind, and I began to see that it was overloading the circuits to try to do as much as some wanted to. Whenever the times got tough or after they left or whatever it was, I think a lot of people who left the Clinton administration lowered themselves by their own behavior in terms of lesser loyalty than they should have had. Not giving it a lot of thought, frankly, I said, Sure. Id met Bentsen a few times. Ickes arrived for different reasons; that wasnt to try to lend organization to the process. So not long after arriving in the new offices, which were over there on Vermont Avenue, I remember that, I went over to the Treasury and met with Secretary [Nicholas] Brady and the Deputy Secretary, very nice manname escapes me at the momentand began to debrief the senior members of the department. Then I came upstairs, Hillary was there. But I think the most that the Fed can be expected to do is move short rates. Then ultimately, to give you a sense of how colorful this became, DAmato went to the Senate floor and he had a gigantic calendar the size of this wall and was marking off the days. Theres one thing about Clinton that I think is beyond debate, that hes a fabulous politician. and he said, No. Can you tell us how you first got to know Bill Clinton? he is one of famous Financial professional with the age 75 years old group. In the spring of 1991, I think it would have been May or June, we had the chance to have a talk here in New York, and I then talked to him by phone. But you think that by January 20th, this basic division of the fundamental economic policy. A lot of funny things were happening. It was an all right agreement. So I ended up serving in this job for 12 or 13 months, and I had a very disciplined approach to it. If nobody else has any more questions about that, the other trade issue that you were greatly involved with that we touched on only once or twice has been Japan. And trade was one of Clintons priorities and of course NAFTA was followed by a series of other trade agreements, GATT [General Agreement on Tariffs and Trade] and so forth. 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. To make a long story short, of course we all hired lawyers and so forth and we were brought before a grand jury. I have to confess it was the spring of my senior year and I was paying a little more attention to girls and golf than I was to the normal ebb and flow of events on the campus. Some of thats a function of, for lack of a better word, the culture within the group of people who worked in this administration, so that there is no penalty paid, in effect, among your former colleagues for being outspoken or saying something in the press critical to the President. So I served in that job for give or take a year, and I never had a single meeting on an investigation nor did any of my predecessors, just wasnt done, wasnt necessary, and so forth. Twofold. But I only began to spend heavy time on that after the August passage of the Presidents economic program. Youd seen him working with domestic policy issues and with members of Congress and support here. So he performed a similar role. Can you walk us through that? His popularity had sunk to low levels. For other people it was Clintons legendary one-on-one prowess and his effectiveness in small groups, but I dont think theres any one reason why this person or that. Very, I think, untoward behavior, myself. I think Clinton was better served by virtue of Perots presence in the campaign than without it. I dont think its wholly right becauseand this may sound strange coming from mePresident Reagan I think will be seen very favorably by historians, mostly because hell be seen as the man who ended the Cold War, and Reagan didnt have to take the position of aggressive anti-Soviet behavior, but he did. 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 funny in the conventional sense, but it was just funny. We wont get into a philosophy, an argument, about causation, I think Reagans Presidency, a bit, goes against what youre saying, thats all. They were done among the United States, Mexico, and the Congressional parties involved. The administration made a change in the way economic policy-making was going to be made too, and I think that choice was made during the transition to have a National Economic Council, and that would have been a great unknown given the Treasurys historical role in economic policy-making. Ironically, Clintons style for those meetings and the style of the present President are not very different. For example, I said earlier, the National Economic Council is not a new idea at all, that the Ford administration had its version, Nixon had his version, and so forth. First of all, the actual role of the Deputy Secretary as defined in the Treasury mission statement is to do what the Secretary of the Treasury asks him to. I follow it pretty closely, and I have a hard time figuring it out. The contrast between Chicago, which was in an uproar at the time, and Georgetown couldnt have been more vivid. He did, that was the first State of the Union. The number of possible votes at that stage had dwindled down to a tiny number, votes that were undecided. This was breaking news, CNN [Cable News Network] was interrupting its programming and so forth and President Clinton said, What is this about? Were there any members in particular with whom you worked directly that you felt you were personally responsible for salvaging? I was not involved in the decision as to the sequencing of healthcare versus welfare reform. How are people in the future to understand why this became such a polarized situation with Congress? Why dont we break now. Secretary [William] Simon spent hours with me, which is quite odd in retrospect since I was 32. Hes not focusing on it, he doesnt particularly care about it. Everybody gets a nametag, and theres the Secretary of the Treasury, the Deputy Secretary of this and Director of OMB, and youre all sitting around, a very staged setting. If you think about it, it makes lots of sense. There could be a lot of backsliding on that, well have to see. But in any event, Im sure it wasnt as good as it should have been. If you think about his history, Bentsen had been a highly decorated war hero. President Clinton, in retrospect, his disavowals on some of his private life were almost certainly false and the way he handled the Lewinsky matter was about as bad as it could be because heessentially swore before the American people that he didnt do it, and of course then recanted. The vote was really the most dramatic moment I ever experienced in six-and-a-half years of government service. Web(Studio: Charles Gibson) Earlier interview held with Evercore Partners Roger Altman about the House vote and the market reaction. So the experience of visiting these guys, some of whom were right on the edge, made tremendous impact on me. The chief, the captain of that ship with Mickey Kantor, USTR [United States Trade Representative], and to some considerable extent Ron Brown, Secretary of Commerce, and Lloyd Bentsen played a big role in it. I was very pleased that he decided not to run because I thought it would just mean the Democrats might well lose again. You had the bilateral talks with the Japanese and the G7 format. Oh yes, this is not long after the key members of the economic team are chosen. It was quite an experience, in retrospect. How did the second transition compare with that first one in terms of cooperativeness, in terms of being organized and. I thought Perot was a flake, I think Perot is a flake, so I didnt take him terribly seriously. It wasnt as simple as that, lay the groundwork for a new agreement. Well, it was supposed to become the law of North America on January 1st, wasnt it? But you know, theres a real sense of the torch passing and history, and one had to be struck, even though Id been involved with Clinton from mid 91, by the youth and vigor that Clinton and Gore exuded, and Ive always personally liked the south, so I enjoyed being there, so I did go. 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. Nothing, zero, never did, never would have. So obviously by inauguration day hed largely assimilated them. So its funny how reality quickly returns. In other words, Clinton believed that he could charm anyone if he wanted to and Bush believes the same thing. I just didnt; it wasnt my style. Altman ran the White House war room during last I just never took him seriously as a candidate. But in any event, what gets discussed most in the campaign historically may or may not be the first or second major initiative that comes from the new President. Once again, were grateful for your time. I knew Bob Kerrey quite well by that time and Bob was very unpredictable. So the dynamic between the two was quite an interesting dynamic and quite quicklyto come to your pointafter the stimulus plan went down, Clinton began deferring to Bentsen on everything. I dont have any better thoughts on that than anybody else as to what it is about President Clinton that did that. I think we made some, but it was grudging and limited. The key players turned out to be the so-called blue dog Democrats. We just discussed one of them, which is the up cycle in partisanship, as I call it. Theyd been working on it for two or three weeks or whatever one does, but, as they usually do, the day before the profile runs, they want to come in and interview him so they can have a current aspect to it. Oh sure. Alan Greenspan was on it; Simon was chair of it. So two points: one, I support what the President did and I think he deserves a lot of credit for it. It turned out to be the equivalent of walking the plank. Sure. I think it was serious as a political thing, meaning you had three candidates instead of two and of course, the dynamic was different. But, in any event, the presentations were very effective and that was, I think, the most important single day in the evolution of that original policy. You see a lot of candidates you know arent going to work that way. Eventually they did, but it wasnt because of this agreement, big macro forces had them do it. Why? You couldnt do that. Then we put on our battle armor and went back into battle. Nineteen sixty-seven to sixty-eight, of course, were peak years in terms of the Vietnam War and antiwar activism, but Georgetown was not at all in the center of that. The Senate Finance Committee is the most powerful committee, Bentsen had been chairman for quite a few years, was seen universally as a very effective, powerful chairman. I got involved in certain aspects of preparing it, editing it, fine-tuning it, I recall that. Against that test, a noncrisis Presidency, what can they achieve, under the extremely adverse politics of this time, thats been building up. Yes. The White House decidedwell, there were certain people who were obviously going to be in it. Id served four years in the Carter Treasury but I hadnt had that much exposure in those years to the President. Clinton gave his State of the Union address, the 28th of January, eight days after being inaugurated. But it was a rather fluid, floating group. Thats something we dont have a lot of information about. Stephanopoulos was there and Sperling was there. But was there any perspective then that in fact, the Japanese economy was weak relative to the other G7? Well, if you were to ask me for a moment when looking back on it, one could perhaps see that we were moving into a new period of partisanship, I would have chosen instead the [Robert] Bork battle, which I think changed quite dramatically the whole process on Supreme Court nominations and the grounds on which they were debated. So its also part of the Treasury tradition to do it that way. The RTC had to choose between allowing the statute of limitationsto expire; filing charges, criminal charges; or, as often happens, entering into a so-called tolling agreement, where if youre the party under investigation, you voluntarily agree that the RTC can circumvent the statute of limitations because you believe that if they have more time theyll ultimately decide to exonerate you and you dont want them to be forced to make a decision about filing or not filing charges. Its not as simple as that. So its a free vote, ideologically and politically. Once she was put in charge of it, it obviously had tremendous internal focus. Then there were other people who went down and the press was following all this. Some time around 1989 or so, Hillary Clinton went on the board. I dont know. But I was briefed on the procedures the RTC had to follow here. This is a bit of an anecdote, but of course Joel Klein served in the Clinton administration. As I say, we assembled sometime between the 20th and 25th of November in Washington and then December 5th or 6th or 7th or whatever it was he made his choices. 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. I took a trip out to Oklahoma to visit the district of a Congressman from Oklahoma whose vote we needed, and ultimately I think we got. Yes, there was a big debate about whether it should be healthcare or NAFTA. 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