TIME: Almanac 1995

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<text id=92TT2573> <title> Nov. 16, 1992: What He Will Do </title> <history> TIME--The Weekly Newsmagazine--1992 Nov. 16, 1992 Election Special: Mandate for Change </history> <article> <source>Time Magazine</source> <hdr> COVER STORIES, Page 30 ELECTION `92 What He Will Do </hdr><body> 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." </body></article> </text>