Clinton is nothing if not rigid. So, when it came to answering Congressman Smiths questions, or Senator Jones questions, we were able to get those answers up there within two hours because we had all the people right in the room. So it was just a very unusual evening. The politics of Oklahoma. Who the key players were and so forth. Of course, the fact of a summit means you have to have some agreement, and we had an agreement. Im not sure. By continuing to browse, you agree to the use of Evercore's cookies. But in retrospect he basically decided in his simple-minded way that he was going to grind the Soviet Union right into the dust, and he did. Which has become a part of the conventional wisdom about this period now, perhaps based on Woodwards analysis. I doubt that youll see that. I mean, Republicans are opposing it because its tax and spend, the President is upset about it because its Wall Street economics. I was completelyclean bill of health from the independent counsel. I mean, by that time, the group that was advising him on economic policy had become reasonably well set. 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. Thats true, yes. I do hope as we proceed that you will take the time to give us your continuing perceptions of Bentsen because unfortunately he is somebody we had approached about doing an interview and. It was a bit of a love fest. Did it come out of Arkansas? But I remember we went to Little Rock. Its curious to me, but thats how it worked. Georgetown was the equivalent of a placid, slow-moving river and Chicago was the equivalent of a roaring torrent. The following MondayI was out West actuallyI flew back to Washington and I believe I resigned on Wednesday. She wasnt a participant in those. Maybe there was, I wasnt privy to that or exposed to that. But it wasnt clear that he was going to do so until not long before he did. The only other observation that just randomly runs through my mind is, I was always described in the press as an intimate of Clintons and that was just not the case. I wasnt telling him anything he didnt know, God knows, but that we were going to enter now a different phase in terms of the laser light of press scrutiny on policies and that we had to deepen the entire effort, and there was agreement on that. He had a certain way of carrying himself and a certain sense of very carefully managing his own stature. I mean, Lloyd Bentsen had been Chairman of the Senate Finance Committee for a long time, knew Alan Greenspan very well, knew the Fed very well. That was on a Friday evening. You know, you call in for five minutes apiece and theyre all lined up. Not likely, and was not the case in 92. Yes, there was a big debate about whether it should be healthcare or NAFTA. They had a very unsuccessful discussion, which resulted in name calling and cursing. He knew that if we lost this vote it was a severe blow. 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. He told me what was going to happen to the Clinton healthcare bill the day it was announced, actually before it was announced. I was to call Bentsen promptly. Fourth, I recall that the economic forecasts for 93 were not very heartening. Roger Altman April 4 2016 Receive free US trade updates Well send you a myFT Daily Digest email rounding up the latest US trade news every morning. While most of this was extreme and unjustified, President Clinton played a role in it himself. People trooped down and sat around and briefed Carter, but he was sitting there figuring out do I want to appoint this guy or that person, and so forth. and Lloyd would say, I wouldnt do it, Mr. President, or I would do it. My own view on that is that American history is filled with examples of severe and indeed brutal partisanship. Well, when we actually re-did Putting People First, we went to Little Rock and worked on it for a few days. I raise the issue because I think theres an extraordinary difference in contemporary politics without the existence of that, without the fact of an independent counsel lingering over an administrations head, and you obviously having had some experience with this would be able to testify to infractions. Most of the budget directors thus far, Alice Rivlin, Leon Panetta, Jack Lewwe spent a day with Larry Summers, a number of the political people as well, speechwriters and so forth. But my guess is that those kinds of. The key players turned out to be the so-called blue dog Democrats. If you think about it in the context of today, well see how the primary campaign plays out, but it will be unusual if differences on issues were the decisive factor. When did the President. I mean, I could imagine that in your tenure, the perception might have been quite the reverse, but I dont know. The great Presidents that you mentioned, the ones that loom large, as you said, are all crisis Presidents. He loved it. I think if Edmund Morris were writing with that skill about the Clinton years, hed have a whole chapter on the vote on this plan. First of all, one has to put it into broad context, including that a number of the more established would-be candidates, if I can put it that way, chose not to run, led by Cuomo, but there were others. Chicago, of course, always has been, and they attracted very different students. Bentsen said, Youre going to ask for this, and youre going to get this, meaning that. Some time around 1989 or so, Hillary Clinton went on the board. Whats the question, why didnt Clinton embrace welfare ahead of healthcare? The only way he saved his life was to throw himself off the roof after hed been shot several times. By the end of the year it had become a massive issue. That has historically been, or at least in the modern era, a successful approach. Somehow it came off successfully in Miami with all these heads of state and everybody was very happy with it. The answer to that is yes. No, no. 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. Then he asked me to begin to work on certain personnelpresent him possible choices for the senior jobs in the department. But in any event, it hasnt ended with President Clintons leaving. Yes, to some degree. I think the Japanese have ultimately realized its in their own interests to make a lot of these changes. Before we close, Id like to make one pitch though. He paid more attention to golf and girls in University. But as to whether it was an innovation, I doubt it. Was there a perceivable influence from your perspective on having Perot in the campaign, making the deficit an issue from his vantage point? We had a good discussion and I went back to the airport and flew home. So heres a person who knew how to manage himself. They were taking, to some degree, a thousand-year view. The Regency Hotel. But I think one misunderstood aspect of his embracing NAFTA wasat that point he was being widely criticized for lacking in principle, lacking in conviction, a weathervane all over the place politically. I traveled to Japan a lot on business. It was the best political speech, with a couple of exceptions, Id ever heard, which prompted a wonderful comment from former President Bush, who then came to the microphone and said, Now I know why Im on the outside looking in. But Lloyd Bentsen was in that league, top five or six or seven. Now, it may last five or six more years, it may last 25 more years, I dont know. It will be differences of style, differences of perception. So that was the revelation, so to speak, that occurred that day. Most of the people I mentioned, and Im sure Im forgetting a group of them, in fact, I know I am, but, I can recall getting slightly involved in debate preparationslightly now, not deeplyattending the debates, seeing drafts of speeches before he gave them, again, not all speeches, but certain speeches, that type of role. 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. The Treasury has a wonderful history of its own and a great deal of pride suffuses those halls. But it doesnt mention that he was President. It was not an accident that he did that. 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. Secretary [William] Simon spent hours with me, which is quite odd in retrospect since I was 32. But its interesting to put it into perspective. There was a camp around that view. Hes pointing to the right-hand column of theWall Street Journal. I came to respect Dole a lot through Bentsen. 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. Are you including in this the difference of approach between the campaign-oriented, the political people, and the policy people, as well as the differences among. 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. Before we come back to this, I want to pose one question and that is about the Presidents style when he was working the phones with members of the House. 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. 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. If were talking about 1991, I think his ideas were in formation. The entire gamut. The Republicans quite shrewdly picked out some that didnt make sense and off the bat marshaled a very focused attack on it. I didnt devise them on my own. 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 did, not before Congress, before the grand jury. Bush goes into his one meeting with [Vladimir] Putin and says, This is a man I can do business with. And we had the same in the Carter administration, but it had been more junior. A lot of time of the National Economic Council was spent on it. But there was the issue of the Clintons association with it and the fact that Madison Guaranty had made loans to the actual Whitewater Development Company, and the question of whether those loans had been made under pressure from the Clintons and in fact whether [James] McDougal, who ran it, had defrauded the depositors in cahoots with the Clintons. I mean one of the oldest rules of Presidential management is, take your pain up front. The notion, by the way, in Bob Woodwards book, The Agenda, that Greenspan was hovering over the proceedings like an angel of death is completely fictitious. Stay as long as you can figure out how to cling to it. So I knew nothing about the substance of the Clinton case. That was about the last time he didnt listen to Bentsen, but he should have. No, I did not. Bentsen also wanted the resignation of the Treasury General Counsel, who resigned too. One is that it had a very rocky beginning in New Hampshire, and Im wondering if you have recollections about your reaction to the news events that occurred and to the electoral results in New Hampshire and how the President was able to deal with those things. There was also a whole series of other investigations undertaken at the same time, one by the Office of Government Ethics, one by the Treasury Inspector General, one by the Office of White House Counsel. 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. You should have asked me about the vote, unless youve already talked to enough people about it. Its worth asking. Its mostly things I learned that dont work. Had there always been a sense on your part that your likely posting in the administration would be in Treasury or. Are we missing anything in terms of your responsibilities? There were ten or twelve or fourteen or fifteen, big numbers. I think we had a sandwich or something and I took off and went back to the airport. I, and quite a few other people, had dinner with him, quite a few meaning 15 or so. But the election result itself was anticlimactic. Then, while the agreement called for there to be no further duties or tariffs or anything on everything, a whole variety of items were carved out in order to get certain votes. No, two funny stories, Jim, dont let him off so easily. I take these observations, very astute observations, from people who live in this discipline. I dont think this is what it really says, but I suppose in the distant lens of history, Ronald Reagan ended the Cold War. I mean, not one encounter, until the early to mid 80s when I was quite involved in various aspects of the Democratic Party and there were a few forums at various places that I would attend and I would occasionally run into him. Id have to do a little homework. That raises the question then of the people he was meeting with here. Well, the war room, first of all, was operated quite differently from the National Economic Council. No, I had very little contact with Mr. Clinton for roughly 20 years after leaving. 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. 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. So I didnt take him seriously except as in a sort of inner political context. The two camps were right there sitting in front of the President for six hours at a time. Was there a group of people who were helping him on the policy side respective to economics? Let me give you an example that is appropriate to the present. Do you have any recollections of seeing anything different in him as a candidate at that point for that position? I dont include that on the list because the federal role in education is always exaggerated. The Secretary of the Treasury is not regularly informed of investigations that the Secret Service is doing, unless theres some special emergency reason to do it. Any particular memories from that successful trip? And that kind of input isnt available during the campaign. 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. That was not a high point of the Clinton Presidency. A fairly major effort went into that, which I was part of. So I knew we had a problem. Yes. Carter, whos a wonderful man, God knows, however is very rigid. Ill never forget, I went in to see one of them whod been shot eight times. If Im not mistaken, Paul Tsongas won New Hampshire? Im trying to get a sense of what their input to the whole process was. We were very explicit. He served as assistant secretary of the U.S. Treasury from 1977 to 1981 before returning to Lehman, where he later became co-head of overall investment banking as well as a member of the management committee and board. Was it his personality that won, or was he able to? Oh sure, New York is, in terms of Democratic politics, not a terribly big town. 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. It was really only when Erskine Bowles became Deputy Chief of Staff that a structure began to be built around Clinton that enabled all those processes to become more organized. So there was not any anxiety or uncertainty within the core group of people involved in economic policy making about how this might fit in or. That approach hasnt been able to capture a majority of the American public for 40 years and I dont think its going to capture the majority of the American public for another 40 years. Did you have to retestify when Starr took this over? No. I might have if I had not known Bob Rubin, but I knew him better than anybody else in the administration knew him and I had great confidence in him and knew that he and I would relate well. Mexico was looking for the freedom for its trucks to cross the border and continue to deliver in the United States. Somebody was wrong. His popularity had sunk to low levels. She inspired, continues to inspire, fierce loyalty and he doesnt. It was a good-sized ballroom here in New York. Did you do any traveling with Clinton on the campaign around New York or outside of New York? After all, thered been only two Democratic Presidents in the last 25 or 30 years and theyd both been southern Governors. 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. 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. Its always a mistake to challenge the Federal Reserve. Well, it was difficult in the beginning. Only to a degree. My comment is a retrospective comment. Bentsen, of course, didnt know the House as well as he knew the Senate, so it wasnt unusual that he himself wouldnt know in the House. Did he interact comfortably with the other leaders at the summit? But its interesting to put it into perspective. More in terms of ostracism from your former colleagues. Bentsen had told me from the first moment this thing was going nowhere. That notion took hold at that meeting. I was not involved in the decision as to the sequencing of healthcare versus welfare reform. Why a war room? And I dont have any different set of reactions than anyone else watching the thing at the time. Lloyd Bentsen was the very first person we tried when this whole project started, on the urging also of Clintons people because of his age, and they didnt know at that time that he was as ill as he was. He didnt want to be involved in the daily ins and outs of those jobs. Yes, hes just that way. Again, I had the benefit of Lloyd Bentsens views. Were seeing it today. Well, that was just one of the many fatal diseases that this bill had. 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. I was in Tokyo with President Clinton, the Tokyo Economic Summit and Id made several trips to Tokyo paving the way for that. Was there anything that particularly distinguished this campaign from what youd seen in these other instances thats noteworthy? But it coincided, I think more importantly than that, with the onset of huge political problems for Clinton in the context of Vince Foster, Whitewater, and the entire beginning of that. Howard Paster at the White House, Mike Levy at the Treasury. Very, I think, untoward behavior, myself. I think I called that evening. But that was fairly brief, though. Yes. So the question naturally arises, was it his economics? The President and Vice President, I think it was Leon Panetta, and myself, one other person, he and I were standing there, looking out, it was a beautiful August night, not too hot, and it was just an amazing moment. The bigger gamble then was, as you say, the long term, the response in the long-term credit markets, whats going to happen, and that, I take it, is where Allen Blinders. I knew a lot about Perot, having been heavily involved in Wall Street for many years. Theres also an institutional dimension to the atmosphere in Washington thats very important and distinguishes the current situation from the situation in which you governed, and that is the existence of an independent counsel. President Clinton, Democrat, nominated a Republican to this job and the Democrats defeated his nomination. Anyone who does that indeed does not know what he is doing, and its the equivalent of Economic Policy 101. I think the answer to your question was, Yes, it was, but the RTC was charged with the responsibility of cleaning up all S and Ls [Savings and Loans]. Now John Snow didnt learn that, hed never been there before and so forth and so on, whatever excuse fits him. I think thats a very important point because it turned out to be an awfully successful piece of legislation and not a single Republican voted for it. Having said that, I dont believe that affected the partisan approach to it. Word comes up, you just say nothing. 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