It was quite an experience, in retrospect. Not likely, and was not the case in 92. So again, it wasnt all about President Clinton. Definitely working on personnel. I believe it was a five-year statute of limitations and the expiration date was January 94 or February or something like that. But you know, theres a real sense of the torch passing and history, and one had to be struck, even though Id been involved with Clinton from mid 91, by the youth and vigor that Clinton and Gore exuded, and Ive always personally liked the south, so I enjoyed being there, so I did go. Most of the people whod been involved in the economic plan or NAFTA for example, werent part of that. So an hour before the vote is when we heard that we probably had his vote. Its not as simple as that. Yes, it was a help. I mean, after all, Whitewater ultimately amounted to nothing. You can see it in real life at 3901 S. Michigan Avenue, about 20 minutes from the In a curious way hed compromised his own position. Is that a fair assessment? First of all, Clintonand I consider this a very important historical achievement, well see how it lastsmay turn out to have transformed the Democratic party. Anyone who does that indeed does not know what he is doing, and its the equivalent of Economic Policy 101. There were so many exceptions and carve-outs and so forth from the final bill that you couldnt count them. And there were obviously a whole host of people who were against it from day one and you werent going to change anybodys mind in the latter category. I was asked a second time to do it on the healthcare. How do you think Clinton ultimately is going to be read by historians, this Presidency? There was a whole bunch of work going on on that but I was completely preoccupied with the Presidents economic program and trying to get it passed, not just during the war room period but before that. They all came to the same conclusions. On the policy issues at this point are you beginning to see any kind of evolution or any kind of establishment of governing priorities, or again, is this a question thats held off on until after the election? I have to tell my most famous Bentsen story because it really illustrates what an extraordinary person Bentsen was. Why a war room? Alan Greenspan was on it; Simon was chair of it. I recall, for example, a discussion at that very original dinner in the spring of 1991 and a rather focused discussion on economic policy, and particularly about deficit reduction. Some of thats a function of, for lack of a better word, the culture within the group of people who worked in this administration, so that there is no penalty paid, in effect, among your former colleagues for being outspoken or saying something in the press critical to the President. So there was a rather constant process of monitoring, assessing, adjusting, going on that way. As I recall, the distinctive thing about Clinton, if everyone had one courageous stand, his was on free trade. 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. Because they thought, If we hold those hostages very long at all after this man becomes President, we may be nuclearized. There was a group of three or four of us who were doing Japan policy. The time for horse-trading was over. No, I just remember the meeting in Little Rock quite vividly, and I think one of the first presentations was given by Allen Blinder about the economic outlook and the extent to which certain amounts of interest rate response would produce likely amounts of growth response. Thats a different issue. Right around that time I was put in charge of the Treasury transition. There was quite a discussion that day about long-term interest rates, as I said the credit markets rather than the Fed. I was involved in the Carter campaign in 1976 and the Mondale campaign in 84, [Michael] Dukakis in 88, Clinton, now Im involved again this time, and, knowing that, I never met anyone who had the appetite for policy itself that Clinton did. You would have thought Senator Bentsen would have felt that way also, unless there was an assumption that this was literally going to be a few weeks time. Then we had the meeting downstairs in the Governors mansion, in a study or a library, the same room actually wed been meeting in on Putting People First a few months earlier. I want to ask one more question about the election because Ross Perots name hasnt come up and been explored. In fact, Bernard and his late partner, George Katz, were both involved. You can have half of it, or something to that effect. No, first of all, it wasnt his focus. So I think you had a President who was seen as very slickand he had that reputation before he became Presidentand then this upsurge in partisanship generally. Exactly. Sure. I hadnt been parachuted in from some distant spot without any such relations. There was a concern that wed spill all the rest of our blood on NAFTA and have nothing left. I went also for the election. I think his views at that point were in formation. I mean, I could imagine that in your tenure, the perception might have been quite the reverse, but I dont know. I think of people like [Harold] Carswell and [Clement] Haynsworth that Nixon appointed and who didnt make it, it was mostly because they were seen as inferior candidates. Was that equally true of the colleagues that you were making sales to with Clinton? Robert Altman reflects on his college years with President William J. Clinton, 1992 election, Treasury transition, budget plans, Whitewater investigation, and North American Free Trade Agreement. Im Jim Young. Bentsen had told me from the first moment this thing was going nowhere. I made two trips to Little Rock. In this case it was well coordinated because Howard Paster was really excellent at his job. No, I dont remember that effort at all, so it must have been pretty quiet. I really think its just that basic. Its very difficult to do that during a campaign. But in retrospect he basically decided in his simple-minded way that he was going to grind the Soviet Union right into the dust, and he did. There was also a very memorable event that was held in the East Room of the White House, and recall that within a week or two of this event, Clintons own position on NAFTA was still up in the air. There are some people who wouldsome of the George H. W. Bush people date the partisanship from the budget deal. WebKathryn Reed Altman and Roger Altman attend State of the Union Dinner at The Re-Opening of the Plaza Hotel Ballroom on January 28, 2008 in New York Roger Altman and Mayor Michael Bloomberg attend THIRTEEN and WLIW 21 Annual Gala Salute at Gotham Hall on April 30, 2007 in New York City. Actually it was mundane. Kerrey made a quite dramatic speech, rather excoriating Clinton, urged Clinton to get back on the high road and so forth and then cast the vote and Gore cast the tie-breaking vote and thats how it happened. Its possible that President Clinton rues the fact that 9/11 didnt occur on his watch, because it was a transforming crisis and did transform, at least to date, the present President. Well, both is the answer. Way back in season one of Shameless, Fiona got a housekeeping job at a hotel. Until there had been hearings and so forth you dont get much of a sense of that. I was politically active, though. We just didnt know, and thats pretty amazing, the biggest piece of legislation, the voting has actually begun. Because if you decided not to go on NAFTA you really couldnt ever go back and say, Im a pro-trade President. From the very beginning I was spending a lot of my time on the Presidents economic program. But absent such a crisis, history tends not to treat you as a great President. I think that there wasagain, I dont follow this that closelybut there was a fast reaction in short-term rates when the Federal Reserve Board loosened, early on, in what appeared to be quid pro quoGreenspan offered some assurance to Congress that the Fed would be cognizant of the Federal. It was really quite revealing of Clintons inexperience to do it that way, and, for that matter his style, a poor way to do it. But then Senator [Daniel Patrick] Moynihan spoke to Kerrey late in the day and I thought that was, if not decisive, very influential. I worked very closely with Bob Kerrey, with Senator [Max] Baucus, who had such a problem with the gas tax. In some measure. So there were a couple of weeks of high anxiety, maybe more than that, maybe everybody was in a state of anxiety between the election and yes, it wasnt at all clear who the Secretary of Treasury would be. Very, I think, untoward behavior, myself. But with regard to deficit reduction. And, of course, the ATF agents didnt know what they were going to experience and he found himself exposed to an open line of fire. Lets recast the question a bit. He said, What do you want to do? Nobody said to me, Hes there. So I would get, from Mike Levy, typically, what my assignments were. He saw the opportunity, he seized it, went against the grain and, lets face it, presided over a period of unprecedented prosperity and balanced the budget for the first time in approximately 50 years. Phil Gramm, Ill never forget, predicted that it would usher in a new depressionI mean depression, not recession. As I remember, we gave that one to labor as a way to try to ease the pain, even though NAFTA called for that to happen. What did you find on the ground when you got there, if I could? Finally the famous proposal comes forward and its put before the Congress. That was the fundamental choice they made in devising the reform. So those ideas were developed during the campaign. It wasnt difficult. So that the link in Clintons mind between deficit reduction and stimulus disappeared when it got into the political arena. So my average day was spent a few blocks from here, working full-tilt on the business responsibilities I had. He did, that was the first State of the Union. I mean, not to take any credit away from other players, you wouldnt want to do that Im sure, but there must have been some. But that battle was resolved in favor of the revolution, the most sweeping alternative, and I dont really have a lot to add beyond whats been written. He had tried to offer every imaginable olive branch to the Iranian leadership. He could have just been rhetorically difficult about it and kind of accepted the fact that were steady as she goes on the Cold War, and he didnt. Carter had chosen, as you remember, to somehow find a diplomatic solution to that crisis. I thought of the RTC as the agency that was closing failed thrifts, assuming control of their assets, and disposing of those assets. You asked me about Bentsen because of his unavailability. Were you privy to the conversations that he had? Did you keep up with him when your paths parted? It had a very different constituency than the economic plan. I want to come back to something that we had touched upon earlier, and that was this question about the administrations prioritizations, because you had suggested that there were some internal discussions, even at the time that NAFTA was taken on, as to what to do next. Im not an economist, so maybe Im making a bad assumption here, but was there a discussion at this time about when you could start feeling some benefits from this pain that you were asking the President to accept at a fairly early stage in his Presidency? Carter had his famous Pond House meetings, and I went to a couple of those. You recently saw Secretary John Snow in a very studied fashion talk about, make an effort to ease the dollar down, we saw that on two different occasions, and I know how these things work. I respected him, but I never identified with him and I didnt see him being a successful Democratic nominee. In the very beginning it wasnt as availed of, as it quickly became availed of later. Last weekend, Roger Altman was back at his ranch in Wyomings Jackson Hole, looking tanned and relaxed, entertaining friends like White House chief economist One of the many stunning things about it is the fact that none of those Republicans paid a price of any kind for that. But its the economy, stupid doesnt communicate a set of priorities within the administration about what steps they will take. It was a very simple letter that was done up for me and I sent it to everybody saying, Just so you know, the RTC has only these procedural options in matters like this, and we will be reaching a decision on which of them to do before the statute of limitations expires. The Clinton stimulus plan just was not well conceived. Youre working on prospective personnel issues? I have to confess it was the spring of my senior year and I was paying a little more attention to girls and golf than I was to the normal ebb and flow of events on the campus. He doesnt even know about the advent of optical scanners in grocery stores, and that was the theme, that was THE central theme as codified, so to speak, in [James] Carvilles famous comment, its the economy, stupid. Ira Magaziner himself, whom I had known for some time, was a gigantic intellect. from Georgetown University and an MBA from the University of Chicago. Yes, we could have had that. I think those discussions, including that particular one, in retrospect, had a considerable effect on him. I was the senior Treasury person day-in, day-out on the major healthcare task force that Mrs. Clinton herself chaired. And deficit reduction was his top priority, a focus at the top? How did the decision-making go about to decide on these different components of the package? I think John Kennedys famous line about Jefferson applies because he had nine simultaneous careers, and the Presidency was only one. I have always liked Mrs. Clinton and I had a lot of respect for her and do have a lot of respect for her. He told me that at the very beginning. So its also part of the Treasury tradition to do it that way. It should have, but it hasnt. Some time around 1989 or so, Hillary Clinton went on the board. Is it okay if we move away from the crisis of getting the big things through to just the more mundane ways that the government ran while you were there? Yes I was asked to be part of that enterprise, but much later in the process. So monetary policy has gone from being considerably more powerful than fiscal policy in 93, to being the only policy in town in 2003. But the two major currency accords, the Plaza Accord and the Louvre Accord, were done in times of crisis in the foreign exchange markets. But I interpreted that to mean, Maybe you should, because I felt that if he thought I shouldnt, hed say so. There could be a lot of backsliding on that, well have to see. Toward the middle and latter stages they met everyday. Decided to do this. No, I was responding to a question about economic policy. And it turned around and by November 84 as you remember, it was Morning in America and he won 49 states. I think it was over two days. I think it was serious as a political thing, meaning you had three candidates instead of two and of course, the dynamic was different. I think the Japanese have ultimately realized its in their own interests to make a lot of these changes. Lets face it, NAFTA has worked. He loved it. Well, it was supposed to become the law of North America on January 1st, wasnt it? Clinton of course had committed to that during the campaign and it made fiscal sense in the sense of there being so much economic slack. It was absolutely breathtaking, profoundly dramatic and unforgettable, absolutely unforgettable. Wed sit around in the Roosevelt Room, and you know how it works. But also the role of the media had been changing a lot and that role I think manifested itself very vividly in the Clinton years. But most of my time was spent on legislation. 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. But lets talk for a moment about the end of 1991. None of the aspects of her role bothered me at all. There were, however, many people who thought, I would say this was the majority view: well ask for this, were going to end up with this. I think thats a very important point because it turned out to be an awfully successful piece of legislation and not a single Republican voted for it. 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. During the preparation would you call that an organized group? The White House decidedwell, there were certain people who were obviously going to be in it. The Secretary of the Treasury is not regularly informed of investigations that the Secret Service is doing, unless theres some special emergency reason to do it. I was often at the National Economic Council meetings that deliberated on those. Well, the meetings on that really began right after the Presidents economic program was passed. She wears her heart on her sleeve much more than he does. When did the President. I mean, he seemed to be quite consistent about that, even though the rest of the field was, as I recall, quite a bit more protectionist. Mostly because Clinton put everyone in a room, for endless hours, to the point where most people wanted to drop and everybody was sitting there around the table. Mrs. Bentsen responded. But the presumption was that the head of the agency of course did know that. The Republicans quite shrewdly picked out some that didnt make sense and off the bat marshaled a very focused attack on it. Oh yes, this is not long after the key members of the economic team are chosen. Here we are in June 2003 and the election as we all know is November 04, so its 16 months or so Exactly. I was elected twice vice president of my class. In retrospect, a limited, very grudging change. Remember, youre playing for four years, youre not playing for one year. Theyre already heavily taxed, its their money, not the governments money and all of that, and if it works, nobody will remember that I opposed it. So I spent a lot of time on healthcare. A little bit. Would I have considered moving to Switzerland if he did become President? Then we ended up for some strange set of reasons having a giant turnout and he wowed them. Theodore Roosevelts name comes up occasionally as somebody that even Clinton himself had at least a temporary fixation on when he was evidently considering his own legacy as some one who took a progressive era, being a kind of rough approximation to the. Arthur Burns was the chairman of the Fed. The process for conceiving it was a frail one, poor one. It was just not the way to run the railroad. Rob Rubin and I went together, Bob Reich was there, Gene Sperling was there, Bob Shapiro was there. We made two or three trips to Japan and then there was the Tokyo Economic Summitthe G7 Summit in the fall of 93 which happened to be planned many years in advance for Tokyo. So I think Clintons own behavior did play a role in it and that in retrospect there would have been better ways for Clinton to have dealt with some of these things. If you take the transition as one chunk of time, rather than chopping it up into chapters, I did a lot of work on personnelwe all did a lot of work on policy development, what was the economic policy going to be, and getting right down to very specific potential decisions. We sat there, the two of us, watching it on television, mostly in silence. You never saw, one time, Bob Rubin do that, not one time, after he left. I dont know whether his Presidency will be seen as one of the most important or transformative in American history. The House voted first, and on the day of the House vote we didnt think we had the votes, or at least we thought the odds were too high that we would lose. That was great. Once again, were grateful for your time. How big a group was doing this recasting? So no, Bentsen did not go over to the White House, hang around, talk about legislative strategy. But I think one misunderstood aspect of his embracing NAFTA wasat that point he was being widely criticized for lacking in principle, lacking in conviction, a weathervane all over the place politically. I think it was obvious to Clinton that there were several serious people there in New York whose support he wanted to get who felt strongly about what I would call a centrist economic policy, perhaps right of center economic policy. We didnt spend a tremendous amount of time talking about, If we do this, Greenspan will do that. For some people the idea was, a southern Governor almost by definition has a better chance than a lot of other candidates. You didnt have to spend a lot of time with Lloyd Bentsen to know that he wasnt going to be shunted aside. The President was all over this. I mean, the reasons why Japan has had such difficulty in terms of its domestic economy are not reasons that an agreement with the United States is going to importantly affect, no more than our signing a trade agreement with Japan that committed us to try to do more at home to pump up our economy would be a big element in whether we did or didnt ultimately see economic growth here. At this point youre working on policy questions primarily? Three-quarters of the people who go into the Cabinet never want to leave it, its great being a Cabinet officer. Yes. I didnt. Bentsen advised him to take it. He lost that election. Then in the latter part of 93 I think, Whitewater began to surface, I think it was late 93. Bentsen had known the then head of it, Albert Casey, whod been chairman of American Airlines, and didnt have a high regard for him. Lloyd Bentsens reputation preceded him and he was a master of the game as far as Washington and the legislative process and handling himself and so forth in a way that few ever have been.