In an Uncertain World

by Robert Rubin

  Another rule of mine was to talk about policy, not about politics. I wanted to engage substantively, not as a political pundit, and in most cases I wasn’t qualified to make political forecasts anyway. So if someone asked me about the administration’s chances of getting renewed funding for the IMF, I’d say we would ultimately be successful because the merits were on our side and then I’d set out our case. If that sometimes made me a less interesting guest, so be it. I avoided the most combative talk shows—which focused largely on conflict and predictions. In general, I found that, like most else in life, you got better at TV by thinking about what you were doing and preparing. I didn’t rehearse answers since that seemed artificial and would undercut the responsiveness and engagement with questioning that is the whole point of television interviews. Instead, I got ready by trying to frame my views in ways that would work on television. I often found that this preparation was valuable in other ways. Thinking about how to express points succinctly often forced me to face contrary views and vulnerabilities in my positions, which sometimes led me to think them through more clearly or even to modify them. A commonplace in Washington is that a lot of policy is made through the speechwriting process. In the same way, I found that my policy thinking was sometimes affected as I prepared for television interviews.

  I learned a great deal that first year about dealing with the print media as well. When I first visited newspaper editorial boards, Gene would come with me. We would sit there together, and I would answer a question. Then Gene would amend my answer—saying that what I had actually meant was slightly different from what I’d just said. In retrospect, this may have seemed slightly bizarre to the journalists in attendance. But it did help me learn how to respond to questions with an awareness of how my answers might create problems for me later.

  Gene also taught me how a telling detail could turn into a useful symbol. He once mentioned to a reporter who was writing about the NEC that I often gave up my scheduled time with the President when I didn’t have any pressing issue. That didn’t seem like a big deal to me; on other occasions, I didn’t insist on being present at briefings Gene would give Clinton in preparation for meetings and interviews. Gene was the appropriate person, and the President deserved to have as few people in the room as possible. I didn’t feel cut out of the picture. To the contrary, I felt that the President’s decision to have someone from the NEC brief him reflected well on the value of the NEC. But Gene’s giving-up-time-with-the-President anecdote had salience because it cut against the familiar clichés about people jockeying for power and “face time” in the White House. As the story got repeated in other profiles, it helped to get across what the NEC was trying to accomplish in terms of creating a fair and open process.

  I realized from the start that the NEC effort would surely go astray if I took advantage of my position or my access to the President to try to promote what I believed personally. So I always bent over backward to be fair to those with opposing points of view. Even when I was alone in the Oval Office telling the President what I thought, I would go out of my way to say that while I thought X, Bob Reich thought Y, and Laura Tyson thought Z. Sometimes, when I had my regularly scheduled time with Clinton, I would ask people who disagreed with me to come along to the meeting to present their views themselves. People in Washington often assume that effectiveness in a presidential administration depends on maximizing your access and exercising your power. But I found that by not seizing all the face time I could, I was more effective. By cultivating a sense of teamwork and fair dealing, I persuaded colleagues to work within the NEC process—and also, in the end, I think, enhanced my standing with the President.

  This kind of teamwork contributed greatly to the development of policy and to internal support for our policies, as shown by the 1993 economic plan. Another memorable illustration was the way we handled trade negotiations with Japan. The members of our economic team had a variety of views—though all were basically committed to trade liberalization. At one end of the spectrum were those who thought that Japan would never open its markets to American competition without extreme pressure. At the other end were the more doctrinaire free traders who felt that our trade deficit with Japan was more a function of our own problems, including our low savings rate, and that, in any case, we benefited from the imports. For my part, I believed that the second-largest economy in the world having significant trade impediments was a major problem for the global trading system, and I supported strong efforts to pry open the Japanese markets. But the point is that in our process, everybody had a fair and full say. Not only did that lead to better decisions because all views were considered, but the participants also bought into those decisions, despite their reservations, because they felt fully invested in the decision-making process. That meant that, despite internal differences, the administration spoke with a single voice in taking a tough stance when the trade issues came to a head at the G-7 Tokyo summit in 1993. One cabinet member reported back a conversation with the Japanese ambassador. In previous administrations, the ambassador said, Japanese officials could visit with administration officials and identify differences among them, which was then helpful in defending Japan’s trade policies. He was amazed that under Clinton, no cracks appeared; every member of the administration hewed seamlessly to the decision that had been made.

  Of course, every rule has exceptions. In a few areas, I thought the free play of internal debate wouldn’t be constructive. Occasionally, someone in the administration would suggest discussing dollar policy or Federal Reserve Board decisions on interest rates. I was able to persuade the others that these two issues should be exceptions to our NEC process. If the outside world knew that our strong-dollar policy or support for the independence of the Federal Reserve Board was subject to internal debate, confidence could be shaken and the markets seriously affected. If others had expressed strong concerns, perhaps some kind of quiet process would have been needed, but that didn’t happen.

  THE CLINTON ADMINISTRATION is widely viewed as having gotten off to a rocky start. Throughout the first year, the press focused heavily on flare-ups over the $200 haircut, the Travel Office firings, Whitewater, and so on. These incidents may well have reflected a shortfall in White House organization and discipline, but the coverage and the impression of chaos seemed to me greatly overstated.

  For chaos was certainly not what I experienced. To the contrary, in the early months of the administration, I saw people working together in an effective, productive way. I used to make that point, and others would look at me as if I’d been spending time on another planet. Clearly, the White House was perceived as less than effectively organized in dealing with communications, media, and political relations—despite very good senior people. But most of that wasn’t really part of my world. I now think that Clinton’s tardiness, his taste for open-ended discussions, and a few other stylistic hallmarks of his first year created a powerful impression at odds with the reality I knew. What I didn’t grasp at the time but have come to appreciate in retrospect is how powerful an influence this kind of style and symbolism can have on how an administration is seen. But however many meetings ran late, work on the vast majority of the substantive economic issues was both organized and effective—and led to major legislative accomplishments. What might have looked messy to outsiders was actually a process of deliberate and open discussion, of smart, committed people engaging in debate as a way of getting to the best decision.

  Some people said that the President shouldn’t be involved in a lengthy discussion of whether the Coast Guard should have a little more or a little less in the budget. My view is that the President’s hands-on involvement in drawing up his first budget in the fifteen or so presidential meetings between January 22 and February 12 contributed enormously to making all of the very difficult decisions necessary to produce a $500 billion deficit reduction plan in such a brief time. What’s more, from then on Bill Clinton possessed a detailed, practical understanding of how the budget pro
cess works, and of a vast number of programs in the budget, that provided him with strong grounding for eight years of annual budget making. Another advantage was that Leon and the rest of us knew in considerable detail what the President’s views on various programs were. Many of the important decisions that Clinton made in his first six weeks were issues that remained settled business within the administration for eight years. Moreover, Clinton wanted to be deeply and personally involved in the budget, and I’m not sure anyone could have prevented that.

  Mack McLarty, Clinton’s boyhood friend who became his first chief of staff, took a lot of criticism for our early troubles. Again, my view is somewhat at variance with the conventional wisdom. The press tended to apply a Washington template that judged the chief of staff’s effectiveness on the basis of the President’s approval rating and the appearance of order—or the lack of it. But it seemed to me that the key issue was whether the head of an organization created an environment that produced substantive results (although appearances can affect the ability to achieve results, especially in Washington). In substantive terms, I viewed Mack as successful. Mack wasn’t a type like John Sununu, President Bush’s chief of staff, who I gather would lay down the law for others to follow. Mack would never try to dominate. Instead he focused on developing an atmosphere in which people could work together effectively, which was what Clinton wanted, rather than spending time and energy on infighting. Mack achieved something that Washington didn’t quite know how to deal with: the creation of an environment with a good measure of mutual support and respect, in which for the most part people functioned well together.

  My own position in the first year was entirely contingent on Mack’s attitude. Another kind of chief of staff could have seen my authority as a threat and taken charge himself, crowding me out. Instead, Mack made room for the NEC process. A reporter once made an observation that I didn’t understand at the time but was absolutely right—the NEC could not have worked unless Mack had let it work.

  As the first-year difficulties mounted, Mack came to feel that the White House needed to take a more strategic approach, a view I shared. Mack suggested to the President bringing in David Gergen, who had worked in four previous administrations, as a high-level adviser with authority over the communications office. I thought that made sense; David brought a strong and experienced strategic perspective. He was very thoughtful about questions such as: How should the President use his time? How much exposure should a President have? How should he present himself? We didn’t have people with the experience to think about those issues in quite the same way David did. But because he was a Republican and had worked for Richard Nixon and Ronald Reagan, Gergen was never really accepted by some who worked in the Clinton White House.

  Bringing in Gergen was seen as a demotion for George Stephanopoulos, who was reassigned from his position as director of communications. George is immensely talented and wonderfully persuasive, but this situation was beyond even his powers. He told me that for a while he tried to explain to reporters that his new role still involved constant proximity to the President. But the assumption that he was being brushed aside in the shake-up was so powerful that after a while George realized that he couldn’t counter it and could only wait until the wave passed. That has been my experience as well. During a media storm, you have to put aside the idea of a balanced presentation of both sides. But you should still try to get your version of events included in a story, even if only in the twenty-second paragraph, because at some point, those efforts might start to have some effect. And that’s what happened here. Once the hullabaloo over Gergen’s arrival died down, reporters realized that George was still central to what was happening and revisited the issue with more balance than in the initial stories.

  As much as Gergen helped, he wasn’t in a position to address the larger organizational problems around the White House. Toward the end of 1993, Mack decided to try to prioritize more effectively, with what came to be known as the “legacy project.” As part of drawing up the President’s second budget in the fall of 1993, Mack asked various members of the administration what they would like to see as Clinton’s major accomplishments, looking back from a notional perspective of either 1996 or 2006. This effort didn’t have any immediate consequence, but it’s interesting to look back at it now, both for my perceptions that first year and as a yardstick to measure the Clinton legacy.

  In addition to health care, which we took as a given, my memo listed five “legacies”: (1) an effective human capital program of high-quality education and training; (2) progress on the problems of the inner city; (3) deficit reduction; (4) an expansion of global trade; and (5) implementation of a rational approach to regulation. Revisiting that list, which reflected my own ambitions for the administration, I’d argue that we accomplished a great deal. Deficit reduction was enormously successful, due to our policy choices and the growth those policies helped promote. Trade liberalization was powerfully advanced by passing NAFTA, strengthening the General Agreement on Tariffs and Trade (GATT), and laying the groundwork for China’s accession to the World Trade Organization, and we were active more generally on international economic matters, including crisis response and prevention.

  On the other issues, the picture is more mixed. The strong economy made a real difference for inner cities, and our policies, including the expansion of the Earned Income Tax Credit (EITC) and increased funding for Head Start, helped reduce poverty. (In the view of many, welfare reform had a significant impact as well, although I had serious reservations about this legislation.) But the fundamental problem of an urban underclass cut off from the mainstream of American society remains, and we still lack a federal effort commensurate with the problem. In terms of “strengthening human capital,” we substantially increased spending on education and worker training. But our public education system still falls far short of what is needed. I think we took the right approach to rationalizing regulation—from reducing export controls and simplifying loan applications for small businesses to banking reform and resisting calls to regulate the Internet. And on a related issue of great importance, we unfortunately did not address the excesses in the tort arena that are such an abuse of our legal system and so adversely affect our economic well-being. I concluded my memo with some observations based on my not-quite-a-year in Washington. “Our political system is too cumbersome to deal effectively with decision making on the complex problems of the modern world,” I wrote. “This problem may be irresolvable, but over the very long run, could overwhelm everything else.”

  This last statement didn’t mean that the more top-down business model of business management could or should apply to government. To the contrary, I’ve developed a deep respect for the differences between the public and private sectors. In business, the single, overriding purpose is to make a profit. Government, on the other hand, deals with a vast number of legitimate and often potentially competing objectives—for example, energy production versus environmental protection, or safety regulations versus productivity. This complexity of goals brings a corresponding complexity of process. Our constitutional system of checks and balances has multiple decision centers—Congress, the Executive Branch (with all its own internal complications), the courts, and state and local governments. Often the relationship among these participants is one of conflict, and, with respect to some issues, the balance of power is ambiguous. Moreover, many participants face electoral accountability. And finally, all important decisions—and even many less important ones—are made with an awareness of how they will be presented in the media.

  In the corporate world, power is far more centralized. Unless trouble develops, a CEO almost always has a relatively good relationship with his company’s board of directors, even as it performs its oversight function. Media scrutiny is far less of a factor, except, again, when problems occur. A successful CEO is far freer to say whatever he wants about politics, his colleagues, or his competitors, at least within reasonable limits. This simpler
model might sometimes look appealing for the public sector. But in reality an immense complexity is inherent in the circumstances of a modern, democratic government. Making government more businesslike can improve efficiency—in both processes and operations—but the inherent complexity would remain.

  WHEN I THINK ABOUT what I wish we had accomplished in our administration and didn’t, broad-based health care reform ranks very high. Our country’s health care system remains an inefficient mixture of market and nonmarket forces that leaves large numbers of people inadequately covered and at the same time consumes a much larger portion of GDP than competitor nations spend. At the start of our administration, I shared the conventional view that the prospects for health care reform looked good. The campaign had built a mandate for reform and there was widespread public and congressional support for it.

  My own involvement was limited, but I came away from our failed effort at comprehensive health care reform with several observations. Most fundamentally, the sheer magnitude of the endeavor—a major policy shift in an area encompassing 14 percent of GDP—made health reform extremely difficult to pass. The larger and more complicated the public policy undertaking, the more special interests there are that may take umbrage and organize against it.

  In this case, massive forces arrayed against this effort, many with a vested interest in the status quo, and spent tens of millions of dollars to defeat the President’s efforts. One example of this was a huge multimillion-dollar national advertising campaign against the plan that proponents lacked the resources to counter. And these ads weren’t constrained by the truth. I turned on the TV late one night in my room at the Jefferson and saw one of the “Harry and Louise” ads. That isn’t what our proposal says, I said to myself. But these ads were highly effective.

  The politics were also very complicated, and I thought Lloyd Bentsen, who had been the savvy chairman of the Senate Finance Committee before becoming Treasury Secretary, made a lot of sense when he said that the President’s deficit reduction plan and health care reform were simply too much for our political system to process at one time. Also, over time, my colleagues working on health care told me that the initial Republican support they had expected slipped away. Watching members in both parties who had publicly espoused support for health care reform “to and fro”—rather than work with each other and compromise to reach a conclusion acceptable to the majority—was a crash course in the realities of politics. The lesson I took from that was that the politics is as important as the policy, because if the politics doesn’t work, the policy—no matter whether the decisions are sensible or not—won’t be implemented.