Had Saddam not started the war, there is every reason to believe the hostages would have been freed before November. Because I was concerned that the paranoid Iranians would think we had put Saddam Hussein up to it, I quickly called Brzezinski and his deputy, David Aaron, and then Henry Owen to recommend that the president issue a reassuring statement that we were not behind the invasion. Owen said it was a “first-rate idea.”162
The next day we held a Situation Room meeting with all the military brass, the CIA, and the cabinet members involved with security, including Vance’s successor, Edmund Muskie. The new secretary of state said the ultimate threat to the United States lay in the Gulf’s busy sea-lanes. We and our allies had naval forces in the area, and the French and Italians believed that Iraq wanted to control the long-disputed territory and bring down Khomeini by destroying Iran’s oil resources and its economy. We realized they were in for a long war—it lasted eight years with a million casualties—and we decided to join a formal UN Security Council resolution calling for a cease-fire, as unlikely as that would be.
This put the administration in a tight corner. While we had no sympathy for Khomeini, to say the least, anything that seemed to indicate we favored the invasion might seal the fate of the American hostages. But there was one way that the war might work to the United States’ advantage: Providing arms for the Iranian military might give us negotiating leverage in freeing the hostages. In October the administration agreed to release an arms shipment that had been ready for delivery to Iran but was withheld by the political turmoil. While some other military goods were also shipped, highly lethal classified equipment such as radar-guided missiles and high-technology aviation electronics were not. If Carter had as little restraint as Reagan had in the sordid arms deal with Iran, the hostages might have been released well before the election.
I can say without equivocation that Carter never missed a beat on my domestic issues. Decision memorandums were returned just as promptly as ever, and when I asked to meet with him in private to resolve interagency disputes, he was always ready. Campaign speeches were planned, drafted, and edited. I never once saw him lose his composure or seem depressed and downcast, except immediately after the disastrous rescue mission, and at rare moments toward the end.
Brzezinski, who briefed him every day on the hostages and other trouble spots like Afghanistan, saw the same qualities—which he summed up as “serenity.” He wondered about the source of this stabilizing quality and concluded that Carter was “a genuinely religious person, who is extremely serious in a thoughtful way about his religion.” We both agreed that Rosalynn was also an important source of reassurance and strength, because she was not only close to him but a strong person.163 Carter never wore his religion on his sleeve, never made me feel uncomfortable about his religion or my own, and that religious devotion, along with his wife’s love, support, and advice, sustained him against all the problems that crowded in on him during his last year in office.
Although the final agreement for the hostage release was reached while Carter was in office, as one last humiliation Khomeini allowed the hostages, who had been freed but were still on the ground, to leave Iranian airspace only seconds after Carter’s term had officially ended and Reagan was inaugurated. We wondered whether the Reagan election team had struck a deal. Did they offer the Iranians the arms deal they later delivered in order to delay the moment of the release? Sick thought so and laid out the evidence he found in a book, October Surprise.164 Carter told me that he had no independent knowledge beyond what Sick had written in his book, but that at one time during the campaign, George H. W. Bush, who formerly headed the CIA and was Reagan’s running mate, “completely disappeared from the American scene and went to Paris.”165
Hearings were held in the U.S. Senate and House of Representatives, which concluded that there was insufficient evidence to conclude a plot actually occurred.166 But Sick did note that the Iranians had been expressing a great deal of interest in obtaining spare parts for their American military equipment until they suddenly stopped about a month before the presidential election, despite their pressing need after Saddam’s attack. If nothing else the Reagan campaign did an effective job of helping create public cynicism as a firebreak against any surprise release that would have benefited Carter.
* * *
Even after losing the election, Carter and his team worked day and night for the hostages’ release. On January 12 he briefed the White House staff on the negotiations, correctly forecasting that they would go right down to the wire.167 The Iranians were contemptuous of Carter, and one of the radical students’ favorite sayings was: “Carter can do nothing.” They neither forgot nor forgave Carter for his identification with the Shah, and Laingen noted that they wished Carter “ill at every opportunity [and] hoped he would lose to further discredit him and disgrace him, as evidence that God was on their side, too.” They got their wish, but they were also unsure about whether Reagan might clobber them and did not want to risk that an hour longer than necessary.168
Carter did not go to bed during the last three nights before he left office, sleeping fitfully on the couch in the Oval Office the entire time. He worked through the Algerians, who, he noted, “were the only ones with whom Khomeini would communicate.”169 Christopher was on the ground in Algiers, backed by Lloyd Cutler, the president’s White House counsel. Twelve nations were involved, with Britain holding $2 billion in frozen Iranian gold bullion, and the United States $10 billion. Carter let Khomeini know that none of the frozen assets would be exchanged for the hostages, but an international claims court would be established for American contractors and other companies that had built airports, roads, schools, and other projects but had not been paid.
All of this, he said, “I had to orchestrate” with one foot out of the Oval Office. He was determined to obtain the release before he left office or at least to leave his successor a clean slate. As a condition of their release, Carter also made a difficult compromise by blocking the hostages from bringing private suits against Iran for unlawful detention. Carter said he reluctantly agreed, and that “some of the hostages have resented that since then.”170 Could the hostage taking have been prevented? Yes, if the president had been left to follow his own sound instincts and deny entry to the Shah for medical treatment. He was well aware of the risks and presciently asked: “What do you propose to do if they take our diplomats hostage?” No one came up with a coherent answer.
And could the hostages have been released earlier? It is impossible to know. I continue to believe that a stronger show of U.S. military might and shutting off Iran’s oil exports would have led to the hostages’ release and not to their murder. Khomeini heeded the president’s warning that any harm or even show trials of the hostages would be met with the full force of the United States, which is why he did neither. But it is easier for me to say. Carter had to make the terrible choice of weighing the possible loss of life of our diplomats against the loss of the country’s prestige in the humiliating impasse with Khomeini.
In providing a fair assessment of the decisions Carter made in dealing with the entire Iranian crisis, little was known at the time about the absolutist, uncompromisingly radical attitude of Islamic fundamentalism, embodied by an unelected, aged ayatollah who did not fit into any historical norms. The Carter administration negotiated with the supposed leaders of the postrevolution government, only to find that they lost their positions and in some cases their lives, and reached agreements overruled by the impervious Khomeini, with whom no one in the U.S. government could even meet, let alone negotiate. Even now, with internal turmoil in Iran, the U.S. still has little insight into, or policies to deal with, the contending internal forces of the more moderate elected government and the radical Islamic clerical regime, which holds the real power.
We had no visibility into his decision-making process, or that of the revolutionary council. In the end the hostages were released partly because of the bite of billions of dollars in fr
ozen assets and imperfect economic sanctions, and partly because even the ayatollah recognized that Iran needed outside help after the Iraqi invasion—but most significantly, because the hostages had fulfilled their role of consolidating Khomeini’s power following the August 1980 parliamentary elections and no longer served any useful purpose to a regime whose ways we still do not fully understand decades later.
PART IX
A CATASTROPHIC CONCLUSION
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“WHERE’S THE CARTER BILL WHEN WE NEED IT?”
National health insurance had been a Democratic dream since Harry Truman’s days, and the inability of Jimmy Carter and Ted Kennedy to agree on a plan was a major factor in Kennedy’s challenge to the president’s renomination. Kennedy rallied the liberal wing of the party and helped weaken Carter against Ronald Reagan in the general election. For three decades—until Barack Obama’s presidency—this set back the goal of broad health coverage for the American people that other Western allies adopted after World War II. National health insurance became the major fault line in the party. Kennedy used it as his lodestar in trying to maintain a liberal party supporting huge new social obligations, while Carter, recognizing the rising antigovernment, antitax mood in the nation and struggling to combat rising inflation, tried to create a more centrist party, while holding on to its historic support for the poverty-stricken and the working poor, white and black.
Even at the height of his Great Society programs, Lyndon Johnson did not seek universal coverage but covered the elderly in Medicare and the poor in Medicaid, leaving tens of millions without health insurance unless they were covered through their employers. Ironically the first serious presidential proposal for national health insurance came not from a liberal Democratic president, but from Richard Nixon in his 1971 State of the Union message, when he expected to face Kennedy and needed to outflank him on health care.1
When Nixon revived it after Watergate, the unions and liberals shunned the plan, believing they could get a better deal from the Democratic president they expected in the next election. This was a continuing pattern during the Carter administration. Rather than reach a compromise with Carter on a less sweeping bill that would have introduced universal coverage in stages, Kennedy initially aimed for all or nothing, in a comprehensive plan financed by payroll taxes. During lengthy negotiations he made important concessions, but not enough to reach an agreement during a time of high inflation and tight budgets. In the end Kennedy and the nation got nothing. Carter did not share Kennedy’s lifelong passion for national health insurance, and during the beginning phase of the Democratic primary campaign did not address it because of its cost, complexity, and because a giant new social program was at odds with his economic focus. This program would have been the mother of them all, and the unions worked with Kennedy to dangle it before Carter as the price for their support.
After capturing several key Southern primaries, the Carter campaign headed to the industrial East and Midwest to test whether the former Georgia governor could be a national and not just a Southern regional candidate. I received a call at our Atlanta headquarters from Steven Schlossberg, the general counsel of the United Auto Workers, who told me the UAW was prepared to endorse Carter if he supported national health insurance—the first union endorsement of any candidate from a nonunion state. While the UAW did not insist that Carter support any particular bill, Schlossberg insisted his statement must include the key principles of universal, mandatory coverage in one law. This had been the union’s goal since Walter Reuther, the founding president of the UAW, first approached Kennedy in the 1960s to make it his cause when he was a junior senator. I immediately called Carter and was authorized to negotiate a set of principles, which the candidate instructed me to make as general as possible, and to avoid a specific timetable on something that clearly was not one of his priorities.
So I worked out with Schlossberg a statement that included the key buzzwords demanded by the UAW but heavily hedged. The program would be phased in “as revenues permit,” would focus initially on catastrophic coverage to avoid bankrupting families, would first mandate mother-and-child coverage, and would then move toward eventual universal and mandatory participation.2 There would be an emphasis on quality and cost control. We later issued a separate statement assuring private insurance companies that we envisioned a significant role for them.3 Thus I had given Carter maximum leeway in committing him to accept the principle but not the details of national health insurance, and in exchange we received both the UAW’s endorsement and its union foot soldiers in key battleground states, helping to validate him for the party’s wary liberal wing.
Kennedy had eagerly awaited Carter’s arrival in the White House in the belief that he had an ally in his life’s quest. He called Carter after the election to congratulate him and felt he received assurances that his top priority would also be Carter’s.4 But the senator did not get the speedy attention he expected from the new president. Once elected, Carter shuffled his priorities in a way that would substantially delay and complicate any agreement on health insurance, not mentioning it at all in an early speech on domestic priorities. He was in no rush to propose a massive new entitlement program so soon out of the gate, lest it undermine his campaign’s emphasis on fiscal frugality as a major weapon to fight inflation.
On December, 28, 1976, at his transition retreat at St. Simons Island (an 1,800-acre plantation owned by Smith Bagley, a Carter supporter and heir to the R. J. Reynolds fortune), he told the incoming cabinet and White House staff that before proposing any expansion of health coverage, it was essential to control soaring health care costs, starting with hospitals. A sweeping energy plan and welfare reform vaulted to the top of his agenda, sapping both the energy and time of the administration as well as many of the same congressional committees that would have jurisdiction over health insurance. Welfare reform and hospital cost containment fell flat, and national health insurance along with them, while the energy plan took two years to enact.5
Containing medical costs was not a diversion from national health insurance; it was an essential condition to include the millions with no coverage at all in a system whose costs were out of control. But it was a sordid object lesson of how Washington’s work is stymied by powerful special-interest groups with money and access to influence Congress. A bill was already before Congress to limit Medicare and Medicaid costs, and Carter broadened it to cover private insurance costs. I suggested linking it further to some form of national health insurance, since the expected benefits of an efficient government insurance plan could be a primary selling point for capping hospital costs. But by concentrating only on costs and ignoring coverage, we were proposing a plan with all pain and no gain, a serious strategic mistake that we never adequately discussed and for which I bear equal responsibility with Health Secretary Joe Califano and our political team. The missed opportunity haunts me to this day.
AN EARLY LESSON IN POLITICS AND POLICY
From our earliest days a central failure of the Carter administration was our inability to combine politics with policy in our decision making. The big political questions about health care were never addressed, nor did Califano prompt them. Instead we went ahead blindly, taking on the medical and hospital lobbies, among the most powerful in Washington, without the armor of expanded coverage. Then began an intensive round of discussions inside the administration,6 and also with outside stakeholders such as the hospital organizations, the American Medical Association (AMA),7 and the National Association of County Organizations.8
We also kept in close contact with Senator Kennedy, who supported our efforts to rein in costs. But when Carter wrote key congressional leaders thanking them for their help, his letters read something like a memorandum: “To Chairman Edward Kennedy: Thank you for your prompt work on hospital cost containment. I am enclosing a copy of a letter on cost containment that I am sending to the other three health subcommittee Chairmen. Sincerely, Jimmy.” He rarely personalized his letters b
y writing in the first names of senators or congressmen or penning a personal inscription at the bottom, which added to their sense of his aloofness, the opposite image from what we saw while working with him daily.9 With Kennedy’s help we moved a bill out of the Senate Human Services Committee to cover privately insured hospital patients as well as those on Medicare and Medicaid.
Then we hit a serious roadblock in the House Ways and Means Committee’s Health Subcommittee, chaired by Dan Rostenkowski of Chicago; it was also the home base for the two associations representing for-profit and nonprofit hospitals, where they played their special brand of Washington political hardball. The vote on hospital cost containment, already watered down from the administration’s proposal, was tied, and Harold Ford, a Tennessee Democrat, could not be found, for good reason: He had pledged his vote to both Rostenkowski and to Michael Bromberg, the executive director of the American Federation of Hospitals, which opposed the bill and had written Ford a substantial campaign check. Rostenkowski had a marshal summon Ford to the subcommittee room, where he reluctantly yielded his tie-breaking vote to Rostenkowski. After Rostenkowski gaveled adjournment, Bromberg canceled Ford’s check.10
Then Rostenkowski decided to call in his own political chit as his price for continued support, as the bill moved to the full Ways and Means Committee. He was furious at the White House for not appointing Chicago’s deputy mayor to the Chicago regional office of Califano’s department, and vowed: “I’m going to get even.”11 Califano cut a face-saving deal but the president overruled it, saying: “All these guys care about is the head of their regional office. I’m not going to make a deal like that.”12 The unwillingness to trade small favors that can produce big results was emblematic of his distaste for the traditional give-and-take of Washington politics. Rostenkowski was not someone worth crossing on such a minor matter when he was the legislative key to a major initiative.
President Carter Page 98