Time - Man of the Year/Time_Man_of_the_Year_Compact_Publishing_3YX-Disc-1_Compact_Publishing_1993.iso/moy/111692/1116997.000

Text File | 1993-04-08 | 31KB | 593 lines

                                                                                COVER STORIES, Page 30

ELECTION `92

What He Will Do


Armed with more will than wallet, Clinton realizes he must
stimulate the economy before delivering on such heady promises as
health-care reform and job retraining

By MICHAEL KRAMER -- With reporting by Priscilla Painton and
Walter Shapiro with Clinton


    He was not a born king of men. . .but a child of the
common people, who made himself a great persuader, therefore a
leader, by dint of firm resolve, patient effort, and dogged
perseverance. . . He was open to all impressions and influences,
and gladly profited by the teachings of events and
circumstances, no matter how adverse or unwelcome. There was
probably no year of his life when he was not a wiser, cooler,
and better man than he had been the year preceeding. -- HORACE
GREELEY ON ABRAHAM LINCOLN


    Early last January, on a cold, windy morning, Bill Clinton
drove around Little Rock reveling in his good fortune. The
Secret Service cocoon had yet to come and not a vote had been
cast, but Clinton was already being hailed as the Democrat to
beat. Dressed in jeans and a sweatshirt and with a University
of Arkansas baseball cap tilted back on a head of hair
considerably less gray than it is today, Clinton wheeled his
state-owned sedan around town and laughed at the presumption of
comparing himself to Lincoln. "Yet, you know," he said, "if you
think about it, that description kind of gets at me some, don't
you think?"

    Greeley's observation is contained in Lincoln on
Leadership, a slim volume of 188 pages. Clinton, a quick study,
could have devoured the book's central tenets in a few hours.
But he carried it around for weeks, dipping in and out,
rereading its advice, "learning a little," as he put it. "He
keeps talking about it," said his aide, George Stephanopoulos,
at the time. "It's like a private bible about how to govern."

    The epigraph of the book's first chapter quoted Lincoln's
reason for relieving General John Fremont of his Missouri
command during the Civil War: "His cardinal mistake is that he
isolates himself and allows nobody to see him," Lincoln wrote.
"That's it," said Clinton as he drove. "The key to being an
effective political leader is getting around. Lincoln was always
out and about picking up information. He wasn't a prisoner in
the White House. He was one of the few Presidents to regularly
visit working sessions of the Congress. I do that too, with the
legislature here. You've got to go find the facts for yourself,
and many of the good ones come from outside your inner circle.
If I make it, the hardest thing will be to keep reaching out.
A strict, formal structure just won't cut it. There's too much
you miss if you don't forage around yourself.''

    Two days after this conversation, the Gennifer Flowers
allegations almost wrecked Clinton's candidacy. He weathered
them, and others with the potential to destroy him, and
afterward mused about the value of luck. "You work and you study
and you position yourself and you strike back when you're hit,
but without luck, forget it," Clinton said last spring. "Think
about how I've gotten to this point. Bush was riding high in the
polls after the Gulf War, so the big-name Democrats stayed out.
That's luck. Then, the guys who chose to run anyway proved less
than compelling because they didn't seem to have seriously
thought through what they'd do with the job, so they appeared
tentative and simply ambitious. More luck. And then, above
everything, there is the luck of a bad economy. The case for
change is virtually self-evident. When I talk about change, I'm
tapping into a pre-existing desire for it. Best of all, if I go
all the way, the economy will be on the mend, so I'll be playing
with a deck increasingly stacked in my favor. Now that's real
luck."

    That was then. Today reality has another face. Several
days before the election, some of the men and women who hope to
help the President-elect fix the nation's broken economy met to
review the situation. They pored over the latest economic data,
considered future projections and reminded themselves of the
promises Clinton made during the campaign. "Due to circumstances
beyond our control -- and some of our own making -- the deck is
not exactly stacked in our favor," says one of those who were
present. "The reality is a cold shower. Expectations for Bill's
presidency couldn't be higher, but the economy is stalled almost
beyond reason. We changed our program last June and said we'd
cut the deficit in half in four years rather than eliminate it
completely -- but even that seems impossible now unless we get
serious about cutting entitlement programs, which would probably
require expending all of our political capital."

    Four years, the Clintonians realize, is not a long time.
"We'll get some deficit relief in the first few years, as the
savings and loan bailout is completed, but we're looking at a
deficit that will climb again in 1995 and '96 when Bill is up
for re-election," says the aide. "On top of that, we have
incredibly expensive programs for everything, and many of the
supporting numbers on both the revenue and spending sides just
don't add up." A case in point, says this adviser, is the plan
to collect $45 billion in extra taxes from foreign corporations
over four years. "We'd be lucky to get a tenth of that," he
says. "Bill's going to win, but his luck may be about to run
out."

    Clinton promises a post-Inauguration 100 days reminiscent
of Franklin Roosevelt's action-filled early push to lift
America from the Great Depression. But budgetary constraints
will force him to choose priorities among the many reforms he
has promised, ranging from universal health insurance and
college-loan programs to massive public works investments. The
most critical decision he faces is whether to combine an initial
economic-stimulus package with deficit-reduction measures or to
postpone the belt tightening until a stronger recovery is under
way. What to look for in the short term:


    -- Executive Orders overturning such Bush Administration
actions as the ban on lesbians and gays in the military.

    -- Rapid legislative action on a spate of bills, like the
Family Leave Act, that have stalled because of Bush vetoes or
veto threats.

    -- Early staffing decisions that will set the tone of the
Administration. Two key appointments: chief of staff, which will
signal whether Clinton will follow a top-down or
hub-of-the-wheel governing style; and Treasury Secretary, which
must be someone who can reassure both financial markets and the
Federal Reserve that Clinton will exercise discipline as he
pursues economic reform.

    The first 100 days cannot be successful without an intense
interregnum. The time between now and Jan. 20 will tell the
tale, and by all accounts Clinton is just beginning to focus on
the transition. But for months a number of campaign insiders and
several groups officially unaffiliated with Clinton have been
thinking hard about governing. A small cadre led by campaign
chairman Mickey Kantor, a Los Angeles lawyer, has been working
secretly for eight weeks. In Washington the Democratic
Leadership Council has been pondering policy and structural
questions for even longer, and Clinton's aides expect its
conclusions will carry special weight. Clinton helped found and
was once chairman of the group, a collection of centrist
Democrats whose views the President-elect has often echoed. The
council's thoughts -- and those of its think tank, the
Progressive Policy Institute -- will be presented to Clinton
later this week, and may offer the best window into
understanding how he will proceed from here.

    More important than who gets what job is how Clinton
conceives of his government operationally, whether he is able
to winnow his varied and often contradictory promises to a few
significant proposals capable of passing a Congress that will
have its own agenda, and whether he is astute enough to
understand that process and policy are inseparable. Clinton's
first task, says the Progressive Policy Institute's Elaine
Kamarck, must be "the definition of his mandate, something he
needs to do early and often. If he doesn't do it, it will be
done for him by the media, which will look to the exit polls and
their own musings."

    Defining his mandate, claiming a rationale for his
election beyond the rejection of Bush, is critical for Clinton
for two reasons: 1) despite his impressive victory, a majority
of Americans voted for someone else; and 2) there is a vast
difference between being an instrument of change and being a
catalyst for change. Clinton "thought about beginning this
definitional process before the election," says Kamarck, "but
the result was in too much doubt, and he had to make sure he
won."

    Clinton's advisers hope he will emulate Ronald Reagan.
Against the evidence, Reagan interpreted his 1980 victory as a
vote for his supply-side nostrums rather than a vote against
Jimmy Carter. "Reagan just said what the election was about, and
pretty soon everyone bought his definition," says Kamarck. "Now,
with a series of speeches culminating in his Inaugural, Clinton
has to do what Reagan did."

    At the same time, the President-elect must set his
priorities, determine the structure of his government and make
appointments. "The order is key," says Richard Holbrooke, a
Clinton foreign policy adviser who served in the Carter
Administration as an Assistant Secretary of State. "If you
appoint people first, they immediately begin protecting their
turf, and they start making decisions in your name. Clinton
should delay appointments till his priorities are set and until
he has a governmental structure firmly in mind."

    Clinton believes he has already signaled the programs he
will emphasize in his first 100 days: job creation, health-care
reform and training the work force of the future. "These are the
things we've run on and we'd want to address right out of the
box," says campaign director Bruce Lindsey. "But each of these
implies hundreds of subpriorities that he hasn't yet ranked,"
says another Clinton aide. "Take job creation. What the hell is
that, really? Do we go with a large economic-stimulus package
right away? Do we increase infrastructure expenditures? Do we
push all the training schemes he's mentioned at once and right
away? Do we delay a middle-class tax cut in order to pay for it
all, because the economy's so sour? These questions are crucial,
and the list of them is endless. Simply enunciating what we call
the Big Three major objectives gets you nowhere in real life."

    One of the important "process" decisions Clinton must make
soon is whether he will control the appointment of sub-Cabinet
officers instead of permitting the department Secretaries to
select their own deputies. Clinton appears to have firm views
on the subject. Carter's problem, Clinton said last winter, "is
that he gave little thought to how his appointees would work
together. He went for the `best people' without thinking about
their loyalty to him or to his program, and he avoided getting
involved with choosing the second-tier people, who are the ones
who really run things on a day-to-day basis."

    The question here is whether Clinton will really avoid
Carter's mistakes, or whether Clinton's conciliatory nature will
cause him to accommodate all his philosophically diverse
advisers in the belief that he is smart enough to adjudicate
among them. "He doesn't want to do everything," says Clinton's
campaign-issues director, Bruce Reed. "He wants to know
everything -- and from that comes a tendency to make most
decisions himself."

    Clinton views intellectual ferment as valuable in itself,
and while he may have gone to school on Carter's shortcomings,
he has described himself as being "quite taken" with Franklin
Roosevelt's presidency. F.D.R.'s governing style has been
captured best by biographer Kenneth Davis: "Whitmanesque in his
zestful openness to a variety that . . . included
contradictions, and in his `yea-saying' to all and sundry, he
was absolutely confident of his ability to `weave together'
antagonistic counsels and personalities . . . he talked with a
steady stream of visitors, each of whom left him saying and
often believing that he was deeply sympathetic with the
visitor's views if he did not, in fact, share them."

    After hearing that passage, three of Clinton's closest
aides say the same could be "said exactly" of the
President-elect, and Hillary Clinton's own analysis of her
husband supports that conclusion. "If you go in expecting that
someone who is sympathetic with you agrees with you, then that
is a very naive position to take," Hillary recently told the
Washington Post. "When he says, `I understand,' or `That's
terrible,' that is no commitment, but an expression of
understanding."

    From this stance, his advisers fear Clinton will follow
Roosevelt and reject a White House system that revolves around
a strong chief of staff -- even if the President-elect permits
someone to have the title. F.D.R. preferred what political
scientists describe as a "spokes of a wheel" structure that had
the President at the hub. Carter too tried a "spokes"
arrangement for the first two years of his term. Jack Watson
(who was Carter's last chief of staff) has described the
disaster that ensued. Carter "wished to know the pros and cons
and the ins and the outs of every issue," Watson said. "We had
a spokes-of-the-wheel staff where there was going to be equal
access. Many of our problems arose from that and from the fact
that no one knew who was really speaking for the President. We
should have started from the beginning with a strong chief of
staff."

    Clinton should too, but there is no obvious candidate for
the job besides Hillary. The testimony of campaign insiders
highlights Clinton's need for a tough staff chief and indicates
clearly why Hillary is best positioned for the role. "Hillary
is quicker to clarify and make decisions than he is," says
Carolyn Staley, one of the Clintons' oldest friends. "He'll
maybe [let] things drag or wait for someone else to do them.
[Hillary's] very organized. She's very thorough on follow-up.
Bill relies on the staff to keep him organized." Betsey Wright,
who served as Clinton's gubernatorial chief of staff, views
Hillary as the "process" person in the Clinton political
partnership. "She's the facilitator for making certain that the
decisions he is leaning toward are ironclad," says Wright. "And
by asking him the questions and walking him through scenarios
and playing devil's advocate, she keeps other people from
imposing things on him. She has the trial lawyer's [ability]
to punch a hole in an argument -- and she'll keep punching until
he fixes it."

    Hillary has said only that she foresees a more
"comprehensive" White House role for herself than that
undertaken by previous First Ladies. Actually naming her chief
of staff would cause a flap; but if Clinton won't take such a
precedent-setting step, he will have to find someone of
comparable skills or risk seeing his presidency go the way of
Carter's.

    While Clinton needs to resolve such structural issues
quickly, he must move with equal speed on several fundamental
policy decisions.

    In 1960 Harvard political scientist Richard Neustadt told
President-elect John Kennedy that "nothing would help the new
Administration more than an impression of energy, direction,
action and accomplishment. Postpone whatever is postponable.
Concentrate upon the things that are immediately relevant."
Kennedy governed in an easier time. For Clinton, too much that
is immediately relevant is difficult and in some instances at
variance with his campaign rhetoric. This is not to say that
Clinton won't impress. He understands symbolism and will quickly
act to telegraph a change in tone and direction.

    As early as his first day in office, Clinton will issue
Executive Orders lifting the ban on the use of U.S. funds for
fetal-tissue research and the prohibition of gays in the
military. He will also support legislation that the Congress can
be expected to pass triumphantly, like the Family Leave Act, a
law mandating stricter child-support enforcement,
campaign-finance reform, and tougher restrictions on lobbyists
and government employees who seek work in the private-sector
businesses they had previously overseen -- the so-called
revolving-door problem.

    With these easy steps accomplished, the road will become
increasingly rocky. Some of the programs Clinton mentioned
without caveat during the campaign are full of qualifiers, and
those unfamiliar with the fine print of his plan will be
disappointed. Many of Clinton's sweet-sounding programs, like
requiring companies to spend 1.5% of their payroll on job
training, will be "phased in" over long periods, and even when
fully implemented, some will not have the reach many expect.

    Consider the plan to permit students to finance their
college education with loans or a period of community service.
Clinton has spoken often about national service, but he has
never mentioned that the maximum tuition assistance available
would be only $5,000 a year (less than the annual cost of an
education at even most state universities), or that only a
fraction of those who might be attracted to the idea could be
accommodated. "We're not going to create another entitlement so
that anyone who wants to go into national service can do it,"
says Bruce Reed. "We'll spend up to $7.5 billion a year on it
and try to provide as many slots as that money can pay for." By
that calculus, only about 250,000 students could become national
servants, or roughly one-eighth of those who would be eligible
if the plan had no monetary ceiling.

    A feature of Clinton's program to revitalize urban areas
would give welfare recipients and low-income workers an
incentive to save by allowing them to place money in special
accounts. The funds could be used for education, job training,
the purchase of a home or retirement, and they would be
federally matched with up to $1,800 a year. Families with
incomes up to about $28,000 a year could participate. But again,
as Reed points out, Clinton plans only a four-year, $400 million
"demonstration project," barely adequate to meet even a minute
fraction of the probable demand.

    While the mitigating details of the programs behind these
promises have been established, there are others that have yet
to be fleshed out, and still more that will most likely be
relegated to the back burner, simply because, as Reed has said,
"there isn't enough money to make everybody happy." So drug
treatment on demand, 100,000 new cops on the street, expanding
Head Start and other well-meaning ideas probably won't surface
as legislative initiatives until well into Clinton's term, if
then.

    What will be addressed is the truly serious business: how
to do anything meritorious about job creation, health care and
worker training when Clinton's advisers have already concluded
privately that the country may face an annual deficit of $500
billion by 1996. Toward the end of the campaign, Clinton was
almost desperate to dampen expectations. He knew, as he said,
that "people are dying to believe again" and that he had
"raised a lot of hope." But in the week before the election, in
a reprise of George Bush's Inaugural assertion that "we have
more will than wallet," Clinton quietly said, "There's a limit
to what we can do because of the deficit." Then, in his
penultimate campaign address, in the wee hours of Election Day
in Albuquerque, New Mexico, Clinton said, "I'm here to tell you
that we didn't get into this mess overnight, and we won't get
out of it overnight," a line one of his aides described as
consciously downbeat.

    Actually, Clinton had been hedging for weeks. During the
third debate, on Oct. 19, Clinton responded to those who were
incredulous about the arithmetic of his plan with these words:
"I am not going to raise taxes on the middle class to pay for
these programs. Now, furthermore, I am not going to tell you
`Read my lips' on anything, because I cannot foresee what
emergencies might develop." That was fine as far as it went, but
at no time since has Clinton defined "emergencies." Neither has
he said that he will not raise middle-class taxes for other
purposes, like deficit reduction, or whether he may increase
"consumption" fees on items like alcohol and tobacco that, after
all, are taxes by another name.

    The reason for all this gobbledygook is simple: the sorry
state of the economy will force Clinton to offer a
fiscal-stimulus program that he will then have to balance with
deficit reduction. On the stimulus side, the strategy under
discussion would involve speeding up Clinton's proposals for new
federal spending on infrastructure improvements to create new
jobs. Clinton's advisers contend that such expenditures have a
multiplier effect that will spur private spending. They believe,
for example, that better roads mean new shopping malls, gas
stations and hotels.

    To hasten this ripple effect, Clinton may expand the
investment tax credit beyond what he has already proposed, a
pump-priming action that could be scaled back as the economy
improved and the unemployment rate declined. But critics fear
that infrastructure spending could be squandered on unproductive
pork-barrel programs as members of Congress add their pet
projects to the Administration's list. Pork aside, two former
presidential economists (Republican Herbert Stein, who served
Nixon, and Democrat Charles Schultze, who worked for Carter) are
worried that infrastructure spending will simply drain money
from private savings and investment, thus defeating the
multiplier effect. "There is a risk here of Democratic
supply-side theory," says Henry Aaron of the Brookings
Institution. "The Democrats may be making a claim for public
investment as ridiculous as the conservative claim for tax
cuts."

    To blunt such skepticism, Clinton has professed increasing
concern for the deficit. He claims that "there may be some ways
to increase investment without increasing the deficit" (a view
many economists find dubious), and he has lately spoken of
"getting serious" about the deficit later. "But it is very, very
difficult to be credible on deficit reduction when you are
saying you are going to do it down the road," says Rudolph
Penner, a former Congressional Budget Office director whose mild
retort reflects a common disbelief among professional
economists. Two other important constituencies have echoed
Penner's qualms. "I would approach any stimulus package with a
great deal of caution," says House Budget Committee chairman
Leon Panetta. "It has to be linked to a definite
deficit-reduction plan." Add to this the likelihood that the
Federal Reserve might be tempted to increase interest rates to
stem inflationary pressures in the wake of a Clinton stimulus
program, and one gets a sense of what Clinton is up against.

    Clinton insisted last week that he has "worked hard to
send a signal to the markets that I'll be disciplined, that
I'll both promote growth and work to reduce the deficit." Maybe
so, but the markets fret that Clinton will perform like a
typical tax-and-spend Democrat. The question then comes back to
balance: Will the markets remain calm if Clinton promises to get
serious at some undetermined future date? Or will he actually
have to enact a triggering mechanism that would mandate deficit
reduction once a certain growth rate was achieved? A collateral
problem here is that half of Clinton's projected deficit
reduction in his first term assumes a healthy economic growth
rate of more than 3% annually -- a rate the country hasn't seen
since the late 1980s.

    The complexion of the Administration's economic team will
be critical as the Congress considers Clinton's initiatives,
especially since the core campaign group of economic advisers
has performed less than admirably. Clinton unveiled a second
economic plan in June, because the first program had failed to
consider the Defense Department reductions already proposed by
President Bush, a mistake that meant Clinton would have about
$200 billion less to spend than he had anticipated. Besides such
substantive difficulties, Clinton has been plagued by a sloppy
staff structure he still tolerates. Throughout the campaign, as
his economic plans were increasingly refined, the candidate
found himself overwhelmed with extraneous information. A rigid
paper-flow system was instituted during the summer, but only
some adhered to its strictures. To this day, several dozen
economic advisers end-run the process and reach Clinton on a
regular basis, thwarting most attempts to organize the stream
of advice.

    Assuming these managerial problems are resolved, Clinton
continues to be in the position of having to reconcile wildly
conflicting recommendations. His advisers were deeply divided,
for instance, over whether Clinton should support the North
American Free Trade Agreement -- and Clinton initially proposed
establishing an Economic Security Council merely to signal to
his own aides that he is serious about trade competition. On
another key matter, two of Clinton's principal advisers differ
greatly on which infrastructure projects the government should
fund. Business consultant Ira Magaziner is entranced with
cutting-edge-technology projects like fiber optics, short-haul
aircraft and high-speed rail; Harvard professor Robert Reich
favors more prosaic investments like rebuilding roads, bridges
and sewers. During the campaign, says one of his aides, Clinton
adopted Magaziner's list because "it's vivid metaphorically."
But the underlying tension remains, and Clinton may flip toward
Reich's view once he assumes office.

    These and other conflicts will be magnified when Clinton
chooses his economic team. The President-elect's tendency toward
procrastination is legendary -- "Bill doesn't want to make
decisions unless he has to," says a longtime friend -- and one
aide predicts that many key spots won't be filled until January.
Once the selection process gets down to short strokes, no
decision will be as crucial as Clinton's choice for Treasury
Secretary -- and that determination, again, will in large part
revolve around the stimulus-vs.-deficit reduction conundrum. If
Clinton won't -- or believes he can't -- address both problems
in a single legislative package, and if his level of
self-awareness is such that he understands his own soothing
words may be insufficient, then he will have to appoint a
Secretary with the stature both to calm the markets and reassure
the Federal Reserve. Any of the four people prominently
mentioned for Treasury fit that bill: former Fed Chairman Paul
Volcker, Texas Senator Lloyd Bentsen and investment bankers
Robert Rubin and Roger Altman.

    In conjunction with the Treasury appointment, Clinton will
have to make an even more fundamental decision: whether to
appoint to the budget office, the Council of Economic Advisers
and other important economic-policy offices people who share a
basic philosophy, rather than a disparate group that could
create a Carter-like stalemate. "What counts is that everyone
is singing from the same hymnal once the decisions are made,"
says a senior Clinton adviser, "but yes, the potential for
meltdown is always there when a President has strong people of
different views jockeying for influence."

    A new day. A new man. Whether or not Bill Clinton
challenges Americans -- as he promises -- they will certainly
challenge him. None of his late-inning attempts to calm voters'
expectations resonated. He has proffered the moon. His
countrymen expect him to make good. But what do Americans know
about this man who insists they are still just getting to know
him?

    -- On five hours of sleep a night, he pushes himself
relentlessly. "You've got to show others you're working harder
than they are," he has said.

    -- He believes the 1992 election is the most important in
decades: "The chances for change will be much greater than
they've been in a long time, greater than after Watergate,
because Watergate was not a mandate for change; it was a mandate
for good government."

    -- He believes in American exceptionalism, the creed of
self-reliance and self-confidence identified by Emerson -- that
nothing really ever happened before, and that Americans are
going to do it better anyhow: "Our ability to re-create
ourselves at critical junctures is why we're still around after
all this time."

    -- He worries about his toughness: "When I was younger, I
was too eager to please everyone. It was a weakness. I think
I've changed."

    -- He believes in action: "I do not promise to be a
perfect President. I will make some mistakes, because unlike the
guy who's in there now, I'll do something."

    -- He knows the value of humility -- and isn't afraid to
steal a line from Ross Perot in order to project it: "I'll wake
up every day in the White House with the idea that it's not my
house; it's your house. I am nothing more than a temporary
tenant and your chief hired hand."

    -- He knows that Teddy Roosevelt was right about the bully
pulpit: "Some look at the evidence and believe that if their
conclusions are logical, others should accept them
automatically. That's not good enough. You have to communicate
-- constantly, emotionally and directly."

    -- He knows invoking his predecessors is the way to
America's heart: "Be faithful to the ideals of Jefferson and
Washington; be faithful to the sacrifice of Abraham Lincoln; be
faithful to the optimism of Franklin Roosevelt; be faithful to
the faith in the future of John Kennedy."

    -- He knew before he won what he would do first when the
campaign ended: "I am going to thank God."