Sure, I did. Some people thought they were misguided. I want to ask you a general question since youve raised the Carter precedent again here.And that is, we get the perception in talking with some people that there was a conscious effort on the part of senior-most advisors to President Clinton not to reach out and rely on a lot of people that had Carter-era experience in the Presidency. It was a successful fundraiser. Second of all, I am not a classic liberal, so Ive thought for 20 or 25 years that classic 60s liberalism was the wrong way to go. He may have kicked it off in a certain sense, but it has continued even more strongly to some degree in the last couple of years, but that was another broad historical development, critical historical development, which characterized the Clinton period. In retrospect, a limited, very grudging change. Its interesting too at this very moment with her book having just come out to watch some of the tapes being played on television about some of her own moments. Three-quarters of the people who go into the Cabinet never want to leave it, its great being a Cabinet officer. Its not as easy. Were they talking about what you do with Senator X, with Congressman Y? 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?" But most of my time was spent on legislation. He saw the opportunity, he seized it, went against the grain and, lets face it, presided over a period of unprecedented prosperity and balanced the budget for the first time in approximately 50 years. You think that a lot of Republicans who didnt support it would say, Well, theres a little justice in the world because Bush 41 paid the price for having a compromise in 1990 that, along the lines of the 1993 bill, did help restore some fiscal discipline to the U.S. The President made a decision he was going toand he discussed this during the campaign at lengthbe more aggressive with Japan to have a fairer, more level playing field. A lot of kids who went to Georgetown were interested in having a good time, and most people who went to Chicago were really serious about their academic pursuits and the world around them. Its possible that President Clinton rues the fact that 9/11 didnt occur on his watch, because it was a transforming crisis and did transform, at least to date, the present President. Well, it can be revived at any time, the Congress can just vote to revive it. Why didnt that work, from your perspective? I suppose the problem that the administration confronted was that it was far from being budget-neutral. And it turned around and by November 84 as you remember, it was Morning in America and he won 49 states. 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. It was an astounding speech. So heres a person who knew how to manage himself. Once she was put in charge of it, it obviously had tremendous internal focus. I believe, as I say, it was either the day of or the day after Gennifer Flowers had given her press conference. Well, it was also a surprise to many in the administration because the truth is, the fight over the economic plan took every ounce of energy that everyone had and attention didnt really turn to NAFTA until that was over, and that was over in August. They began to mount quite a drumbeat of Republican outcry to the effect that it was the responsibility of the RTC to unilaterally extend that statute of limitations on the theory that it would be wrong to let the Clintons off the hook, and the RTC had the power to do that. But the tax increasesand there were two main ones, the energy tax and the upper bracket increasewere seen by the Republicans, every last one of them, as unacceptable and became their rallying cry. Is this before the beginning of the year or. I was just in awe of people like that. So an hour before the vote is when we heard that we probably had his vote. But that was about as specific as you can get. I did the best I could. I doubt that youll see that. As I recall, the distinctive thing about Clinton, if everyone had one courageous stand, his was on free trade. Was there a representative of the campaign. He does not see that as one of his own great accomplishments. Theyd review it and youd go to a meeting where you received a 900-page memo, three quarters of which you didnt understand. If Im not mistaken, we were looking at a $350 billion deficit, up from about $260 or something that we had been generally using during the campaign. Every imaginable issue arose and Clinton hit all those balls out of the park and it gave the American public a chance to see how astonishingly smart and deep this guy was. Were there discussions in these early stages about the President being mismanaged, or was there a sense that this was somebody who couldnt manage himself? That was the first time we had an opposition takeover. Hundreds of meetings over many months, also similar to those original meetings, too many people, too long, too many people talking and so forth. Abraham Lincoln saved the union. They were taking, to some degree, a thousand-year view. Its quite a difference and I ascribe it to the fact that she does not look at the world as, or at least in my experience, as solely and only politically. Then, I was in Tokyo. Also, wed had 12 years of Republican rule and there was a widespread sense of time for change. Youve already mentioned the people who were attending that particular meeting. So I attribute that to just the fact that Woodward talked a lot to Greenspan, but that may be just an incorrect take on it. People who liked Cuomo liked him a lot; people who didnt like him didnt like him at all, and it was about half-and-half. I put the President on the phone with her and of course, she cast the decisive vote. Some of them, yes. They had a very unsuccessful discussion, which resulted in name calling and cursing. But before then, somebody was charged with thinking about transitional issues, actually before the November election, and my question to you is whether, in your work in Treasury transition, you had relied on any work that had been done before? NAFTA has been successful. So those two circumstances are important as a starting point, the second one especially, because wed been assuming a certain deficit problem, and upon fresh review, it turned out to be much worse. He said, What do you want to do? 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. No, he doesnt, not in terms of the way I would define close friends, genuine friends. Some of them I think were insincere, but many of them were sincere. If I search my memory or some dusty file somewhere, I could probably come up with more names, but it was not a huge group. Yes, Putting People First was reissued, I believe it was June. Everyone was thinking about one thing and not expressing it. That certainly, in terms of social assistance to low-income working age people, that was a transformative administration. That ostracism certainly hasnt afflicted the Clinton alumni. We know youre extremely busy. I remember Allen going through that. So my second point is that I was a part of that during the pre-war room period. I left the Treasury about a month later when my successor Frank Newman, who was then Under Secretary for Domestic Finance, was nominated and had been confirmed. Sure, sure. Well, after the Presidents unveiling and before the war room, this pre-war room effort at selling, how was that coordinated? To this day, I have a much closer relationship with her than I do with him. Clinton gave his State of the Union address, the 28th of January, eight days after being inaugurated. I knew Bob Kerrey quite well by that time and Bob was very unpredictable. 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. Was there a group of people who were helping him on the policy side respective to economics? Well, we were talking about lasting changes. 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. Its actually enjoyable, its fun. Japanese discussions were harder, but the G7 summit was fine, it was easy. The reason I posed the question the way I did is that since World War II theres been bipartisanship in Presidential leadership on free trade. Lets divide concessions into two: actual changes in the bill, and then offering a Congressman something in another area to help make it easier for him to vote for this. So he performed a similar role. But I mean, when you were sitting in the Roosevelt Room, where most of those meetings took place, all of the players were there. I can tell you without any fear of contradiction that anyone who makes either of those mistakes, and I can think of others, will ultimately rue the day that he made them. He wouldnt call the others back; hed have me do that because when youre Chairman of the Senate Finance Committee and some freshman Senator called you, you didnt tend to talk to him. She wasnt a participant in those. Now, of course, as far as working the Hill was concerned, I would take my cues from the constant and joint planning of the White House and Treasury legislative liaison staffs. So I knew a little bit about what was worth doing and what wasnt. The first vote on one of Clintons issues was a defeat, which presaged a lot of the weakness that then afflicted him during 1993. 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. Gene Sperling was in it. Well, there was, like most administrations, kind of a running shakeup. 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. So I knew nothing about the substance of the Clinton case. Well, I got briefed on it and basically, two points here: one is the chairman of the RTC whether it is me or Mr. Casey or the people before him, never were briefed on, exposed to, involved in, or otherwise saw anything at all about the investigations the RTC was pursuing. Roger Altman is Founder and Senior Chairman of Evercore, the most active independent investment bank in the world today. Of course, during earlier phase of this, Bernie Nussbaum had resigned, mostly over the fact that he met with me on this original matter. It struck outsiders as the administration never passed up an opportunity to say, This is the preserve of the Federal Reserve. That wasnt a very long meeting. The idea of making changes or improvements in the IRS is a pretty tough idea, but you find yourself doing things like that. It was easy. Were there things about those campaigns that you had learned in preparation for this one that proved to be particularly helpful? I was the senior Treasury person day-in, day-out on the major healthcare task force that Mrs. Clinton herself chaired. I think well probably want to pick up there and find out about that experience. 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. Can you tell us about his decision-making process on this? I thought that was pretty funny. We cant afford to lose it, that type of stuff. That was a bad mistake. You can do it through tax increases and then you have to choose the tax, and you can do it through spending reductions and you have to choose the area youre going to focus on. But its the economy, stupid doesnt communicate a set of priorities within the administration about what steps they will take. There was a stimulus package that dwindled, right? Ill never forget, I went in to see one of them whod been shot eight times. No one thought on the morning of the election that Clinton was going to lose and Bush was going to win. We had wonderful cooperation, at least in the Treasury. So people should think of it in those very basic terms, and a lot of people havent and I think less of them for that. Bentsen really respected Dole. 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. What was different about it was that it worked, because most of them had been somewhat dysfunctional. It was, in any normal historical context, yes, right of center because it focused on deficit reduction, tighter fiscal policy, more conservative budgeting. And it was very effective because a lot of the people who came were opinion makers and he made a tremendous impression. The basic point was Ill focus on it, Ill get it moving. It really wasnt that way. When we had the opportunity to sit down, our own leadershipyou mentioned Leon Panetta, for example, having been chosenand formulate a fresh set of estimates based on all the then latest data, and obviously reaching out to a whole host of experts, it became clear that the deficit outlook was considerably worse than we thought. We were very explicit. I cant recall my own platform, and as a result I really cant recall his. 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. 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. No, let me just correct the record. Senator Kennedy was for it from day one. The bills up on the Hill and it is the object of tremendous controversy and heat and light. It was quite a full-bore effort. During the Ford administration they had something called the Economic Policy Board I believe it was, EPB and Bill Simon as Secretary of Treasury was the head of the board and it met actually every morning in the White House. Hed be speaking someplace and Id be playing some role at the same conference at one of the usual conference locations, and we would briefly renew the acquaintance, but I did not stay, in any organized way, in touch with him. I left the White House around April, took a couple of months off, and went back to New York. I was not one who thought the whole idea of putting the First Lady in charge of this was somehow unsound and I always had good relations with Mrs. Clinton, so we communicated pretty well. Id become a pretty active Democrat in New York, particularly active by standards of Wall Street, which still had relatively few visible Democrats in its midst. Did it succeed? I spoke to the Oklahoma state legislature. Do you have anyyou were sort of one of the casualties of this campaign, but was the Whitewater thing separate from this hate stuff? I think it did. Once again, were grateful for your time. Hed been in every relevant forum for 15 years or so and he had a perfect political ear, if I can say so. I guess I probably began to help raise money, its a rough memory now, in the early fall, perhaps September of 91. 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. We touched on this at a couple of points but never directly asked you whether you thought the President. Were they talking broad strategy, were they keeping whip counts? Im not sure thats true or it isnt. I also think it is wrong politically. Theres some story that he demanded a commission on entitlement reform as a price. You say you knew Rubin well, but did you have a sense that in the other places where economic policy-making is made there was ever any tension over this kind of an arrangement? In all aspects? There was a concern that wed spill all the rest of our blood on NAFTA and have nothing left. And I also think that theres a certain sense of loyalty among the people that are currently serving in this administration, which is more in keeping with tradition, than the Clinton folks, or many of them I should say, brought to it. I was in Tokyo, asleep, so I was a bit taken aback. Was this a group of people that you primarily put together, or is it bits and pieces of people that the Clintons had known. Well, I dont think theyd like it. Its probably strange humor in this instance. I believe Greenspan went to Little Rock. Carter had the famous $50 rebate, which became the object of much derision ultimately. I attended Georgetown University and I was a year ahead of him. A lot of people didnt realize and I didnt entirely realize the regulatory responsibilities of the RTC at the time. Well, both is the answer. Then he asked me to begin to work on certain personnelpresent him possible choices for the senior jobs in the department. Well, I was thinking of both actually, but in the bill. I think I called that evening. I think any President who is either fortunate enough or skillful enough to preside over a period of peace, at least as far as American soil and American forces are concerned, deserves credit either for his good luck or his skill. Did you think it was a waste of time at that point? When did the President. I know the Congress and the Congress isnt going to buy it. You see a lot of candidates you know arent going to work that way. The social side of it had almost nothing to do with it. The second was the evolution of the deficit estimates during that period. You were involved in the Little Rock Economic Summit? Then there were other people who went down and the press was following all this. So the swing votes were the object of our attention. Hes pointing to the right-hand column of theWall Street Journal. Is the existence of a war room something. No, I went back the next day. All the groundwork had been done before the storm broke, so there were probably three to four hundred people. Actually the bigger debate was over what came after NAFTA, welfare reform or healthcare. It should have, but it hasnt. In other words, all the work that goes in before its actually sent to the Hill. I think less well than he was treated while he was in office. Yes, I believe the charter of the RTC transcended whether it was a state chartered or federally chartered S and L. Well, the guarantees were not Federal if they were state chartered. He managed to remain viable through New Hampshire. Hes the first guy who stepped in defeated. Wasnt that a state-chartered institution? Hed been the Governor of New York for quite some time and everyone knew Cuomo and his coterie. She may have had a lot of influence on it, but I didnt see her. TR, extraordinarily colorful President. I dont think I would have known otherwise. The time for horse-trading was over. You ultimately get into a room like this and you say, youd better start to train me, tell me how this happened. Greenspans name hardly came up during these discussions. But I didnt unilaterally choose all the members of it. I dont. Im not sure that was what they originally intended, I suppose it was, but I wasnt involved in the planning of the summit, I just went to it and had a role on one of the panels and sat around for a couple of days, really. So that the link in Clintons mind between deficit reduction and stimulus disappeared when it got into the political arena. Do you remember your impressions of Clinton as an undergraduate? But I talked to Secretary Bentsen and I think hed been already talked to about it, but anyway, he said, Fine. My own view on that is that American history is filled with examples of severe and indeed brutal partisanship. The election took place on the first Tuesday of November. In retrospect, I think those are the two main reasons he embraced it. So in June 91 it wasnt completely unknown, it wasnt below the radar screen, but there was always a group of people who were political junkies and so forth, and Im certainly in that group, who were following it, just like theres a large number of people that are following it today, 17 months beforehand. NAFTA had much broader support among the so-called or self-styled elites, the business leadership, all the economics community, the foreign policy establishment. Thats true, yes. It begins I think with the economic and fiscal circumstances that the administration faced, and two in particular. But I think he may turn out to have transformed the party, which really is an important historical achievement. No, no. A lot of the talk was about the public credit markets responding, not so much the Fed. If were talking about 1991, I think his ideas were in formation. How difficult was it to do what you were doing in an environment where Mario Cuomo was sort of floating around trying to figure out. It was a very simple letter that was done up for me and I sent it to everybody saying, Just so you know, the RTC has only these procedural options in matters like this, and we will be reaching a decision on which of them to do before the statute of limitations expires. I remember that vividly the day of the convention, the morning the convention ended, or maybe the morning after it ended. But, I can tell youa bit of a digression. Well, let me stop. I went down there one day, came back the next day. I dont recall precisely, but Im sure Im right that Clintons standing in the polls was ebbing. Do you recall at what point you felt that there was some momentum being reestablished? Well, that was, in retrospect, the Bill Clinton Show, and he demonstratedit was, I think, very clever in retrospect. Roger Altman, chairman and founder at Evercore, discusses the state of the U.S. economy, the four things that need to be included in the next round of stimulus, and Its been a big help to us and again, we know how extremely busy you are. I called him and said Id be interested in helping him in some form if there was a way to do that, and then one thing let to another and I got involved, not long thereafter, in his campaign, both from a fundraising point of view and from the point of view of economic policy and issue development. Did you have a lot of organizational responsibilities, or it was a going concern when you. He didnt think much of the Btu tax. Definitely working on personnel. I had really not fully ever grasped from my Wall Street days, that there was a great big regulatory side to it including enforcement side, where the RTC was also charged with pursuing investigations against former thrift officials and ultimately prosecuting them if circumstances warranted. I was elected twice vice president of my class. That was not well known to me at the time. So one knew through the press who was going and so forth. I then had the brilliant ideaIm saying this, obviously sarcastically, that I should inform the White House what those procedural alternatives were. It began to get organized at the end of 91. It wasnt as simple as that. So he got people to serve for a long time, even if they were not intensely loyal to him. I long ago decided that trying to figure out how these election contests are going to ultimately resolve themselves is impossible; so I just recalled fondly the time wed known each other back more then 20 years earlier, I liked him, and in my case it was as simple as that. So, looking back on it, the nature and the history of those three men had a lot to do with the eventual outcome. I can even imagine an independent counsel of some kind being unlikely, but not impossible, designated in the whole weapons of mass destruction issue. 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Vividly the day after Gennifer Flowers had given her press conference very effective because a lot of responsibilities. Derision ultimately just vote to revive it there was, like most administrations, kind a... But I think were insincere, but in the IRS is a pretty tough idea, Im... Attended Georgetown University and I was elected twice vice President of my class opportunity say!
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