You see a lot of candidates you know arent going to work that way. and I had no previous knowledge of it at all. So, looking back on it, the nature and the history of those three men had a lot to do with the eventual outcome. We had lunch. Working on the Hill, traveling? Everybody gets a nametag, and theres the Secretary of the Treasury, the Deputy Secretary of this and Director of OMB, and youre all sitting around, a very staged setting. He was fully free to say no to that. In the last 48 or 72 hours, because that vote was also a cliffhanger, although not as close. Mexico was looking for the freedom for its trucks to cross the border and continue to deliver in the United States. But, in any event, as soon as I flew back from Tokyo, I moved into this area in the old Executive Office Building they had cleared out and I was the person in charge of the war room, and it worked I think for five weeks give or take. I think its wrong from a policy point of view. Thats one of the things that kind of surprises. I think though, if I can repeat myself once, I finished reading a few months ago a marvelous biography of TR [Theodore Roosevelt], the second volume of Edmund Morris work. President Bush was very vulnerable, and so Clinton was attacking on the economy and basically saying, if you remember, this rather famous line, he was going to focus like a laser on the economy. Carter had his famous Pond House meetings, and I went to a couple of those. We had a good discussion and I went back to the airport and flew home. Thats just the way history works. I was elected twice vice president of my class. Then of course, the Senate voted the next day and we only had 49 votes that we knew about and Senator Bob Kerrey was the undecided vote, the only one left. I raise the question because one of the outside perceptions that you get later on is when, in the early post-election period of the administration, theres some considerable debate within the administration about which of the priorities ought to come first, and among some of the people that you mentioned in Little Rock at the time. You know, you call in for five minutes apiece and theyre all lined up. In retrospect, the idea that he finished second is seen that he had triumphed. Of course Mack McLarty was there and all theif I can call them factionswere represented. Anyway, a couple of days later I flew to Austin, Texas and met him and Mrs. [Beryl Ann] Bentsen in a hotel room in Austin. But youd been doing transition work for a month. He does not see that as one of his own great accomplishments. By the end of the year it had become a massive issue. She figured in some bumper stickers also. 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. So Fiske came to the conclusion that nothing had happened, Starr came to the conclusion nothing had happened, and certainly, if he could have found anything, I think he would have been motivated to push it. So actually I didnt have any concerns. I was asked a second time to do it on the healthcare. That was the all-time low for the dollar. I moved over to the White House, was given a strange assignment, which was to go run this thing called the Summit of the Americas which occurred in December of 94, which was this meeting of literally 35 heads of state in Miami for three days to talk about why you would have a hemispheric free trade agreement. I could have mentioned a lot of other people, but Im just saying, I dont think that when President [George W.] BushI dont think that as people leave the Bush administration, theyre going to do that. and I said, I just want to serve.Im not going to give you a speech about why I should be Secretary of the Treasury. Thats why I wonder whether there was some kind of perception, outside. He knew that if we lost this vote it was a severe blow. Of course that depends on the moment in question. And Bentsen, who full knew this was going to be on the front page of the Wall Street Journal said, Im not in the Senate. You may remember that Clinton put forward a white paper, if I can call it that, called Putting People First, which came out I believe at the end of 1991. I cant recall what year it was but it was in the late 80s, and now its seven or eight thousand, actually up toward nine, but has more or less slid ever since. There was a concern that wed spill all the rest of our blood on NAFTA and have nothing left. But, no, they couldnt have been more cooperative. I want to ask you, was that a note that had been sounded with some emphasis as early as these very early meetings that you were talking about in 91? In other words, all the work that goes in before its actually sent to the Hill. Ive read a lot of whats been written about the healthcare plan, its all there. Yes, hes just that way. I think Clinton recognized that, by virtue of his being an outsider in Washingtonhe never served in Washingtonhe needed a link to the Congress, a really superb link, of the type that Bentsen afforded, especially since Clintons first priorities were economics.The Senate Finance Committee was going to be, more than any other single place, where the action was. But in 1987, I think it was, the Democrats in this case, I must say, rewrote the rules and decided that ideology should be the grounds on which this was decided, and Mr. Bork may have had great credentials, may have been a scholar of great distinction but his ideology was unacceptable. So he was frantically calling members of Congress as various requests came in for him to do so. That was a factor. I sat there for two or three hours and he took the measure of me and at the end he said, Would you like to do this? So I knew a little bit about what was worth doing and what wasnt. So is there a lot of policy difference today between the nine candidates running for the Democratic nomination in June 2003? But I was briefed on the procedures the RTC had to follow here. I mean, we had these discussions, we had these ways to measure progress and so forth, that sometimes alarmed economists in the United States because they seemed protectionist. Bentsen only talked to about five or six Senators. But everybody felt such a part of it because they were sitting right there. We did have goals. Were there things about those campaigns that you had learned in preparation for this one that proved to be particularly helpful? No, he was working the Hill like everyone else, but he was important. But there were some deputies, Harold Ickes came in maybe six months or soIm trying to remember when that first shakeup with the deputies was. But anyway, in retrospect it was a very bad idea. Were you privy to the conversations that he had? Can you walk us through that? Oh sure, sure, well have another major Presidential uproar. Do you recall in your conversations with Senator Bentsen, were there missed opportunities for developing a more bipartisan atmosphere in Washington at this time, or was it pretty much just a foregone conclusion that because the Republicans were now completely in the minority that they were going to obstruct from the outset? Hed been shot eight times. We still joke about that today. Well take a break for lunch here in just a minute, but I want to jump track and ask you one set of questions about your own responsibilities within Treasury. 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. 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. The idea of making changes or improvements in the IRS is a pretty tough idea, but you find yourself doing things like that. I think the Japanese have ultimately realized its in their own interests to make a lot of these changes. Some of them, yes. And deficit reduction was his top priority, a focus at the top? Clinton, as we all know, is very open, but also a very undisciplined guy. The Wall Street Journal reporter says to Secretary Bentsen, Mr. Secretary, if you were in the Senate, would you vote for the Presidents healthcare bill? But from the outside, one of the notable departures of that administration, and I think it began very early, was the cordial deference paid toward the Federal Reserve Board. I was the natural person to do that, having served in it before. For a variety of reasons, I dont think he had the pure luxury of just saying, Lets do NAFTA a year from now. I want to be sure that there is a clear picture of that because he cant offer it himself. In the initial phases it was really broad strategy because we didnt yet know. Is he somebody who, from your perception, makes close friends at all? But fundamentally, I was getting those assignments from the legislative staff. So that, despite the extraordinary achievement it really was, I think may be seen by history as a small achievement. We had a couple hundred people there. But that moment was quite amazing. Well, nobody took more pain up front than Ronald Reagan. Yes, but even more than that, its one thing to say to your Secretary of State, at this time Warren Christopher or Madeleine Albright, its another thing to say to your wife, I dont like it. I dont think Id ever met her, but we were serving on the same board together and we became acquainted and occasionally talked about getting together some way or other. Bentsen was chosen during the first week of December. 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. I thought Perot was a flake, I think Perot is a flake, so I didnt take him terribly seriously. So the Congress decided to hold hearings on all aspects of Whitewater and, as everybody remembers, everyone from Maggie Williams to Harold Ickes to everybody had to testify. There was a stimulus package that dwindled, right? I dont think this is what it really says, but I suppose in the distant lens of history, Ronald Reagan ended the Cold War. That was a period during which [Boris] Yeltsin was just coming onto the stage. The President relied on Bentsen and Altman to take on some of his Administrations toughest tasks. He remained in those positions until Lehman was sold. But my first point is that that entire team was out there promoting the Presidents economic package, both crisscrossing the country for that purpose, speaking, visiting Congressional districts and so forth, testifying on it of course, visiting one-on-one with members of Congress. But my role was shaped largely by two things: one, Bentsen and what Bentsen wanted; and two, the fact that I had a reasonably close relationship with the White House. I stay in touch with him. It really wasnt that way. Do you have the perception that there were some other instances where maybe this wasnt done? Then once he started to make the rounds in New York, he generated very considerable positive reaction and became self-fulfilling, and raising money for him became quite a bit easier. I would say presided over, Id have to check the statistics, but probably the greatest period of economic prosperity in the entire century, or ushered in the greatest period of prosperity in the entire century. The phone rang and I was told by the Under Secretary for Enforcement that there had been a raid by the Bureau of Alcohol, Tobacco, and Firearms on a complex in Waco, Texas, which had gone terribly wrong. 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. Georgetown was not a hotbed of political activism. [laughter]. Again, I had the benefit of Lloyd Bentsens views. Ill never forget, I went in to see one of them whod been shot eight times. I remember that very vividly, and I said, I want to do the honorable thing. Luck plays a big role in politics, and he was really lucky that a number of candidates who could have been very strong ones chose not to run. I said to him, If I should resign, then thats what I want to do. You never saw it. Less and less now that shes her own public figure, but thats her nature. I suppose you could have strengthening of the yen, coordinated G7 action to do that. That was in recognition of that. In the Carter administration, there was no real sense of what the Federal Reserve really was, what it did, how to deal with it. Certainly on free trade you would say that there was a consistency in his rhetoric during the campaign and the behavior of the administration after he was elected. Word comes up, you just say nothing. In other words, at the time I just didnt take Perot seriously. But Lloyd Bentsen was in that league, top five or six or seven. 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. Mr. Altman returned to Washington in 1993 to serve as Deputy Secretary of the U.S. Treasury for two years. No, he doesnt, not in terms of the way I would define close friends, genuine friends. The arrangements, as far as the White House, how it passes operation, and the Treasury operationshould that be seen as well coordinated, or is it difficult to coordinate? So we were not classmates, and we were not buddies in that sense, but we knew each other pretty well by standards of students who were not in the same year. Greenspan sat next to Mrs. Clinton. I couldnt for the life of me see why that was a problem, but anyway, I went to the White House and told Bernie Nussbaum, the White House Counsel, just how the RTC actually operated in these matters. But its just a reality that in an economy of that size, spending changes arent going to have much effect on the economy; monetary changes can. Not the first time he met with another head of state, but I think his first summit outside this country. Id had served before and seen how not to do it. I didnt feel it because I had a long relationship with Bob Rubin, which had been ten or 12 or 14 years, and Bentsen and Rubin had had their own long relationship and I saw no real problem with everybody relating successfully to each other. Before the grand jury before Starr, and how was that experience? 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