O n the day after the election, awash in congratulatory calls and messages, I went to work on what is called the transition. Is it ever! There was no time to celebrate, and we didnt take much time to rest, which was probably a mistake. In just eleven weeks, my family and I had to make the transition from our life in Arkansas into the White House. There was so much to do: select the cabinet, important sub-cabinet officials, and the White House staff; work with the Bush people on the mechanics of the move; begin briefings on national security and talk to foreign leaders; reach out to congressional leaders; finalize the economic proposals I would present to Congress; develop a plan to implement my other campaign commitments; deal with a large number of requests for meetings and the desire of many of our campaign workers and major supporters to know as soon as possible whether they would be part of the new administration; and respond to unfolding events. There would be a lot of them in the next seventy days, especially overseas: in Iraq, where Saddam Hussein was seeking relief from UN sanctions; Somalia, where President Bush had dispatched U.S. troops on a humanitarian mission to avert mass starvation; and Russia, where the economy was in shambles, President Yeltsin faced growing opposition from ultra-nationalists and unconverted Communists, and the withdrawal of Russian troops from the Baltic nations had been delayed. The to do list was growing.

Several weeks earlier, we had quietly established a transition-planning operation in Little Rock, under a board that included Vernon Jordan, Warren Christopher, Mickey Kantor, former San Antonio mayor Henry Cisneros, Doris Matsui, and former Vermont governor Madeleine Kunin. The staff director was Gerald Stern, who was on leave from his job as executive vice president of Occidental Petroleum. Obviously, we didnt want to look as if wed taken the outcome of the election for granted, so the operation was kept low-key, with an unlisted telephone number and no sign on the door of the offices on the thirteenth floor of the Worthen Bank building.
When George Stephanopoulos came over to the mansion on Wednesday, Hillary and I asked him to continue being our communications director in the White House. I would have been happy to have James Carville there too, to help develop strategy and keep us on message, but he didnt think he was suited to government and two days earlier he had cracked to reporters, I wouldnt live in a country whose government would hire me.
On Wednesday afternoon, I met with the transition board and received my first briefing papers. At 2:30 p.m., I held a short press conference on the back lawn of the Governors Mansion. Because President Bush was in another tense situation with Iraq, I emphasized that America has only one President at a time, and that Americas foreign policy remains solely in his hands.
On my second day as President-elect, I spoke with a few foreign leaders, and went to the office to take care of some state business and thank the governors staff for the fine job they had done while I was away. That night we had a party for the campaign staff. I was still so hoarse I could barely squeak out Thank you. I spent most of the time shaking hands and walking around with signs on my shirt that said, Sorry, I cant talk, and You did a good job.
On Friday, I named Vernon Jordan as chairman and Warren Christopher as director of my transition board. The announcement of their appointments was well received in Washington and in Little Rock, where both were respected by the campaign staff, many of whom were beginning to show predictable and understandable signs of exhaustion, irritability, and anxiety about the future, as the euphoria of our victory wore off.
In the second week of the transition, the pace picked up. I spoke about Middle East peace with Israeli prime minister Yitzhak Rabin, Egyptian president Hosni Mubarak, and Saudi Arabias King Fahd. Vernon and Chris filled out most of the senior transition staff with Alexis Herman, deputy chair of the Democratic Party, and Mark Gearan, who had managed Al Gores campaign, as deputy directors; DLC president Al From in domestic policy; Sandy Berger, along with my campaign aide Nancy Soderberg in foreign policy; and Gene Sperling and my old Rhodes classmate Bob Reich, then a Harvard professor and author of several thought-provoking books on the global economy, in economic policy. The vetting of all candidates for important positions would be overseen by Tom Donilon, a sharp Washington lawyer and longtime Democratic activist. Donilons job was important; defeating a Presidents appointments because of financial or personal problems in their backgrounds or previously unexamined opinions had become a regular part of Washington political life. Our vetters were supposed to make sure that anyone who was willing to serve could survive the scrutiny.
A few days later, former South Carolina governor Dick Riley joined the transition team to oversee the sub-cabinet appointments. Riley had a backbreaking job. At one point, he was getting more than three thousand rsums, as well as a couple of hundred phone calls, a day. Many of the calls were from members of Congress and governors who expected him to return the calls personally. So many people who had contributed to our victory wanted to serve that I was worried about able, deserving people falling through the cracks, and some of them did.
The third week of the transition was devoted to reaching out to Washington. I invited House Speaker Tom Foley, House majority leader Dick Gephardt, and Senate majority leader George Mitchell to Little Rock for dinner and a morning meeting. It was important for me to get off on the right foot with the Democratic leaders. I knew I had to have their support to succeed, and they knew the American people would hold us all accountable for breaking the partisan gridlock in Washington. It would require some compromise on my part and theirs, but after our meetings I was confident we could work together.
On Wednesday, I went to Washington for two days to meet with President Bush, other congressional Democrats, and the Republican leaders in Congress. My meeting with the President, scheduled to last an hour, went almost twice that long and was both cordial and helpful. We talked about a wide variety of issues, and I found the Presidents review of our foreign policy challenges particularly insightful.
From the White House, I drove two miles into north Washington, to a neighborhood beset by poverty, unemployment, drugs, and crime. On Georgia Avenue, I got out of the car and walked for a block, shaking hands and talking to merchants and other citizens about their problems and what I could do to help. Eight people had been killed the previous year within a mile of where I stopped. I got food from a Chinese takeout where the workers operated behind bulletproof glass for safety. Parents of school-aged children said they were frightened because so many of their kids classmates brought guns to school. The people who lived in Washingtons inner city were often forgotten by Congress and the White House, despite the fact that the federal government still retained substantial control over the citys affairs. I wanted the citys residents to know I cared about their problems and wanted to be a good neighbor.
On Thursday, I went for a morning jog, running out the door of the Hay-Adams Hotel, just across Lafayette Square from the White House, down a street filled with homeless people who had spent the night there, over to the Washington Monument and the Lincoln Memorial, then back to the McDonalds near the hotel. I got a cup of coffee and met a fifty-nine-year-old man who told me hed lost his job and everything he had in the recession. I walked back to the hotel thinking about that man, and how I could manage to keep in touch with the problems of people like him from behind the wall that surrounds every President.
Later, after breakfast with fourteen Democratic congressional leaders, I had a private visit with the Senate minority leader, Bob Dole. I had always respected Dole, because of his courageous recovery from his World War II wounds and because he had worked with Democrats on issues like food stamps and disability rights. On the other hand, he was a partisan, and had wasted no time on election night in saying that because I didnt even win by a majority . . . theres not a clear mandate there. Therefore, Dole said, his responsibility was to bring our party together, to reach out to try to attract independent and Perot supporters to put up our own agenda. Dole and I had a good talk, but I left the meeting unsure of what our relationship, or his agenda, would be. After all, Dole wanted to be President too.
I also had a cordial meeting with the House minority leader, Bob Michel, an old-fashioned conservative from Illinois, but I regretted that the Republican whip, Newt Gingrich of Georgia, was away on vacation. Gingrich was the political and intellectual leader of the conservative Republicans in the House, and he believed a permanent Republican majority could be forged by uniting the cultural and religious conservatives with voters who were antibig government and anti-tax. He had skewered President Bush for signing the Democrats deficit-reduction package in 1990 because it contained a gas-tax increase. I could only imagine what he intended to do to me.
Back at the hotel, I met with General Colin Powell, chairman of the Joint Chiefs of Staff. Having risen to the highest ranks with the support of Presidents Reagan and Bush, Powell would serve his last nine months as chairman under a very different Commander in Chief. He was opposed to my proposal to allow gays to serve in the military, even though during the Gulf War, which made him a popular hero, the Pentagon had knowingly allowed more than one hundred gays to serve, dismissing them only after the conflict, when they were no longer needed. Despite our differences, General Powell made it clear that he would serve as best he could, including giving me his honest advice, which is exactly what I wanted.
Hillary and I ended our Washington stay with a dinner party given by Pamela Harriman. The previous night, Vernon and Ann Jordan had also invited some people to have dinner with us. These parties, along with a later one given by Katharine Graham, were designed to introduce Hillary and me to important people in Washingtons political, press, and business circles. To most of them, we were still strangers.
After spending a last Thanksgiving in the Governors Mansion with my family, including our annual visit to a shelter that a friend of ours ran for women and children who had fled from domestic abuse, Hillary and I flew with Chelsea and her friend Elizabeth Flammang to Southern California for a little rest with our friends the Thomasons and for a courtesy call on President Reagan. Reagan had set up shop in a very nice building located on property once used by Twentieth Century Fox to produce movies. I really enjoyed the visit. Reagan was a great storyteller, and after eight years in the White House he had some good ones I wanted to hear. At the close of the meeting, he gave me a jar of his trademark jelly beans, colored red, white, and blue. I would keep it in my office for eight years.
In December, I got down to the business that people hire Presidents to do: making decisions. Since I had promised to focus on the economy like a laser beam, I began with that. On December 3, I had a one-on-one meeting at the Governors Mansion with Alan Greenspan, chairman of the Federal Reserve Board. The Fed chairman has enormous influence over the economy, largely through the Feds setting of short-term interest rates, which in turn affect long-term rates on business and consumer loans, including home mortgages. Because Greenspan was a brilliant student of all aspects of the economy and a seasoned Washington power player, his pronouncements in speeches and congressional testimony carried great weight. I knew Greenspan was a conservative Republican who was probably disappointed by my election, but I thought we could work together for three reasons: I believed in the independence of the Federal Reserve; like Greenspan, I thought it was essential to cut the deficit; and he, too, had once been a tenor saxophone player, who, like me, had decided hed be better off doing something else for a living.
A week later, I began my cabinet announcements with my economic team, starting with Lloyd Bentsen, the chairman of the Senate Finance Committee, as secretary of the Treasury. Bentsen was a pro-business Democrat who still had concern for ordinary people. Tall and lean with a patrician bearing, he came from a wealthy South Texas family, and after service as a bomber pilot in Italy during World War II he was elected to the U.S. House of Representatives. After three terms there, he left the House to go into business, then, in 1970, was elected to the Senate, defeating Congressman George H. W. Bush. I liked Bentsen and thought he would be perfect for the Treasury job: he was respected on Wall Street, effective with Congress, and committed to my goals of restoring growth and reducing poverty. Bentsens deputy secretary would be Roger Altman, vice chairman of the Blackstone Group investment firm and a lifelong Democrat and financial whiz who would strengthen our team and our ties to Wall Street. The other Treasury appointee, Larry Summers, who would become undersecretary for international affairs, was the youngest tenured professor at Harvard at the age of twenty-eight. He was even brighter than his reputation had led me to believe.
I chose Leon Panetta, the California congressman who chaired the House Budget Committee, to be the director of the Office of Management and Budget (OMB), always a critical position but especially important for me, because I was committed to crafting a budget that both reduced the deficit and increased spending in areas vital to our long-term prosperity, like education and technology. I didnt know Leon before I interviewed him, but I was very impressed with his knowledge, energy, and down-to-earth manner. I named the other finalist for the OMB job, Alice Rivlin, as Leons deputy. Like him, she was a deficit hawk, and sensitive to people who needed federal help.
I asked Bob Rubin to take on a new job: coordinating economic policy in the White House as chair of a National Economic Council, which would operate in much the same way the National Security Council did, bringing all the relevant agencies together to formulate and implement policy. I had become convinced that the federal governments economic policy making was neither as organized nor as effective as it could be. I wanted to bring together not only the tax and budget functions of Treasury and the OMB, but also the work of the Commerce Department, the Office of the U.S. Trade Representative, the Council of Economic Advisers, the Export-Import Bank, the Labor Department, and the Small Business Administration. We had to utilize every possible resource to implement the kind of comprehensive, sophisticated economic program necessary to benefit every income group and every region. Rubin was just the man to do it. Somehow he managed to be understated and intense at the same time. He had been co-chairman of Goldman Sachs, the big New York investment firm, and if he could balance all of its egos and interests, he had a good chance to succeed with the job I had given him. The National Economic Council represented the biggest change in White House operations in years, and thanks to Rubin, it would serve America well.
I announced that Laura Tyson, a respected economics professor at the University of California at Berkeley, would be chair of the Council of Economic Advisers. Laura impressed me with her knowledge of technology, manufacturing, and trade, the microeconomic issues I felt had been too long ignored in the making of national economic policy.
I also named Bob Reich labor secretary. The Labor post had languished under Reagan and Bush, but I saw it as a big part of our economic team. Bob had written some good books on the need for greater labor-management cooperation and the importance of both flexibility and security in the modern workplace. I believed he could both defend labors interests in the health, safety, and welfare of working men and women and secure key labor support for our new economic policy.
I asked Ron Brown to be the commerce secretary, fulfilling a campaign commitment to elevate the importance of a department that had been considered a second tier agency for too long. With his unique mixture of brains and bravado, Ron had brought the DNC back from the dead, uniting its liberal and labor bases with those who embraced the new approach of the Democratic Leadership Council. If anyone could enliven the Commerce bureaucracy to advance Americas commercial interests, he could. Ron would become the first African-American secretary of commerce and one of the most effective leaders the department ever had.
On the day I announced Ron Browns appointment, I also resigned as governor of Arkansas. I could no longer devote any time to the job, and Lieutenant Governor Jim Guy Tucker was more than ready and able to take over. One disappointing thing about leaving office in December was that I fell twenty-four days short of breaking Orval Faubuss record as my states longest-serving governor.
On December 14 and 15, with the major economic positions filled, I hosted an economic summit in Little Rock. We had been working on it for six weeks, under the leadership of Mickey Kantor; John Emerson, a friend of Hillarys who had supported me in California; and Erskine Bowles, a successful North Carolina businessman who had supported me for President because of my New Democrat philosophy and my support for fetal-tissue research. Diabetes ran in Erskines family, and he believed, as I did, that the research was essential to unlocking the mysteries of diabetes and other presently incurable medical conditions.
When the conference was announced, everybody in America seemed to want to attend, and we had a hard time keeping the crowd small enough to fit into the hall at the Little Rock Convention Center while leaving adequate space for the enormous number of press people from all over the world who wanted to cover it. Finally, they pared the list of delegates down to 329, ranging from heads of Fortune 500 companies to Silicon Valley executives to shop owners, and including labor leaders, academics, an Alaskan homesteader, and the chief of the Cherokee Indian Nation, whose imposing name was Wilma Mankiller.
When the conference opened, the atmosphere was electric, almost as if it were a rock concert for policy makers. The media called it a wonkfest. The panels produced some keen insights and new ideas, and clarified the choices I faced. There was an overwhelming consensus that my number one priority should be to reduce the deficit, even if it meant less of a middle-class tax cut, or giving up on one altogether. Mickeys Retreat, as we called the conference, was a smashing success, and not just in the eyes of the policy wonks. A poll released after the conference indicated that 77 percent of the American people approved of my preparations for taking over the presidency.
The economic conference sent a loud and clear message that, as I had promised, America was moving forward, away from trickle-down to invest-and-grow economics, away from neglect of those who were losing ground in the changing global economy to an America that once again offered opportunity to every responsible citizen. Eventually I would name Mickey Kantor to be U.S. trade representative, Erskine Bowles to head the Small Business Administration, and John Emerson to the White House staff. If anyone had earned a place on the team, they had.
Just before the economic conference, I announced that Mack McLarty would be White House chief of staff. It was an unusual choice because while Mack had served on two federal commissions under President Bush, he was hardly a Washington insider, a fact that concerned him. He told me he would prefer another job more suited to his business background. Nevertheless, I pressed Mack to accept the position, because I was convinced he could organize the White House staff to function smoothly and create the kind of team atmosphere in which I wanted to work. He was disciplined and intelligent; he had great negotiating skills and the ability to keep up with and follow through on many things at once. He was also a loyal friend of more than forty years, and I knew I could count on him not to shield me from diverse points of view and sources of information. In the first months of our tenure, both he and I would suffer from some of our tone deafness about Washingtons political and press culture, but thanks to Mack, we also would accomplish a lot and create a spirit of cooperation that many previous White House staffs lacked.
Between December 11 and 18, I moved closer to my goal of naming the most diverse administration in history. On the eleventh, I named University of Wisconsin chancellor Donna Shalala as secretary of health and human services and Carole Browner, the state of Floridas environmental director, to head the Environmental Protection Agency. Hillary and I had known Shalala, a four-foot eleven-inch dynamo of Lebanese ancestry, for years. I didnt know Browner before I interviewed her, but was impressed with her; my friend Governor Lawton Chiles thought highly of her; and Al Gore wanted her to have the job. Both women would serve my entire eight years, building long lists of important achievements. On the fifteenth, the story broke that I would ask Dr. Joycelyn Elders, the Arkansas Health Department director, the second black woman to graduate from the University of Arkansas Medical School and a national authority on pediatric diabetes, to be U.S. surgeon general, Americas top public-health official.
On the seventeenth, I announced the selection of Henry Cisneros to be secretary of housing and urban development. With his unusual combination of great political gifts and a caring heart, Henry had become the most popular Hispanic politician in America. He was well qualified for the job, with a brilliant record as mayor in revitalizing San Antonio. I also named Jesse Brown, an African-American ex-marine and Vietnam veteran, who was the executive director of the Disabled American Veterans, to be secretary of the Department of Veterans Affairs.
On December 21, I named Hazel OLeary, an African-American utility executive from Northern States Power Company in Minnesota, to be secretary of energy, and Dick Riley, to be secretary of education. Hazel was an expert on natural gas, and I wanted to support its development because it was cleaner than oil and coal, and in ample supply. Dick and I had been friends for years. His modest manner was deceptive. He had long endured an agonizing spinal condition, despite which he had built a successful legal and political career and a fine family. And he had been a great education governor. In the campaign, I had often cited an article saying Arkansas had made more progress in education in the last ten years than any other state except South Carolina.
On Tuesday, December 22, I announced my entire national security team: Warren Christopher as secretary of state, Les Aspin as secretary of defense, Madeleine Albright as ambassador to the United Nations, Tony Lake as national security advisor, Jim Woolsey as director of the Central Intelligence Agency, and Admiral Bill Crowe as head of the Presidents Foreign Intelligence Advisory Board.
Christopher had been President Carters deputy secretary of state and had played a major role in negotiating the release of American hostages from Iran. He had served me well in the vice-presidential and cabinet selection processes and shared my basic foreign policy objectives. Some people thought his personality was too restrained for him to be effective, but I knew he could get things done.
I asked Les Aspin to be secretary of defense after it became clear that Sam Nunn wouldnt accept the appointment. As chairman of the House Armed Services Committee, Aspin probably knew more about defense than anyone else in the House of Representatives, understood the security challenges of the postCold War world, and was committed to modernizing our military to meet them.
I had been impressed with Madeleine Albright, a popular professor at Georgetown University, since I first met her during the Dukakis campaign. A native of Czechoslovakia and friend of Vclav Havel, she was a passionate and articulate advocate of democracy and freedom. I thought she would be an ideal spokesperson for us at the United Nations in the postCold War era. Because I also wanted her counsel on national security matters, I elevated the UN ambassadors job to cabinet rank.
The national security advisor decision was difficult for me, because both Tony Lake and Sandy Berger had done a great job educating and advising me on foreign policy throughout the campaign. Tony was a little older and Sandy had worked for him in the Carter State Department, but I had known Sandy longer and better. In the end, the matter was resolved when Sandy came to me and suggested that I appoint Tony national security advisor and make him the deputy.
The CIA job was filled last. I wanted to appoint Congressman Dave McCurdy of Oklahoma chairman of the House Intelligence Committee, but much to my disappointment, he declined. I had met Jim Woolsey, a longtime figure in the Washington foreign policy establishment, in late 1991 at a national security discussion Sandy Berger organized with a diverse group of Democrats and independents with more robust views on national security and defense than our party typically projected. Woolsey was clearly intelligent and interested in the job. After one interview, I offered it to him.
After the national security announcements, I was close to meeting my self-imposed deadline of appointing the cabinet by Christmas. On Christmas Eve day we made it: in addition to officially announcing Mickey Kantors appointment, I nominated Congressman Mike Espy of Mississippi to be secretary of agriculture; Federico Pea, the former mayor of Denver, as secretary of transportation; former Arizona governor Bruce Babbitt as secretary of the interior; and Zo Baird, the general counsel for Aetna Life and Casualty, to be the first female attorney general.
Espy was active in the DLC, understood agricultural issues, and, along with Congressmen Bill Jefferson of New Orleans and John Lewis of Atlanta, was one of the first prominent black leaders outside Arkansas to endorse me. I didnt know Pea well, but he had been a fine mayor and had spearheaded the building of Denvers massive new airport. The airline industry was in trouble and needed a transportation secretary who understood its problems. Bruce Babbitt had been one of my favorite fellow governors. Brilliant, iconoclastic, and witty, he had won election in traditionally Republican Arizona and had succeeded as an activist, progressive governor. I hoped he could pursue our environmental agenda with less fallout in the western states than President Carter had suffered.
Originally, I had hoped to make Vernon Jordan attorney general. He had been a distinguished civil rights lawyer and was well thought of in corporate America. But Vernon, like James Carville, was determined not to come into government. When he bowed out in early December, during a talk on the back porch of the Governors Mansion, I considered several people before ultimately choosing Zo Baird.
I didnt know Zo until I interviewed her. In addition to her work as Aetnas counsel, she had served in the Carter White House, had been an advocate for the poor, and, though she was only forty, seemed to have an unusually mature understanding of the attorney generals role and the challenges she would face.
Though I would later elevate some other positions to cabinet level, including those of drug czar, director of the Small Business Administration, and director of the Federal Emergency Management Agency, I had made the Christmas deadline with a cabinet of unquestionable competence and unprecedented diversity.
It was a good story, but not the main one of the day. President Bush gave a big Christmas present to some former associates, and potentially to himself, when he pardoned Caspar Weinberger and five others who had been indicted in the Iran-Contra scandal by Independent Counsel Lawrence Walsh. Weinbergers trial was about to get under way, and President Bush was likely to be called as a witness. Walsh angrily denounced the pardons as completing a six-year cover-up, saying it undermines the principle that no man is above the law. It demonstrates that powerful people with powerful allies can commit serious crimes in high officedeliberately abusing the public trustwithout consequence. Since now none of the defendants could be called to testify in court under oath, if there were any more facts to come out, they probably never would. Just two weeks earlier, Walsh had learned that the President and his lawyer, Boyden Gray, had failed for more than a year to hand over Bushs own contemporaneous notes relating to Iran-Contra, despite repeated requests to do so.
I disagreed with the pardons and could have made more of them but didnt, for three reasons. First, the Presidents pardon power is absolute under our Constitution. Second, I wanted the country to be more united, not more divided, even if the split would be to my political advantage. Finally, President Bush had given decades of service to our country, and I thought we should allow him to retire in peace, leaving the matter between him and his conscience.
On the day after Christmas, I got a pleasant surprise when it was announced that Time magazine would name me Man of the Year, saying that I had been given the opportunity to preside over one of the periodic reinventions of the countrythose moments when Americans dig out of their deepest problems by reimagining themselves. When asked about the honor, I said I was flattered by it but worried about the troubled world, about getting bogged down because there was so much to do, and about whether the move to Washington would be good for Chelsea. Chelsea would do just fine, but my other concerns proved to be well founded.
Hillary, Chelsea, and I spent New Years in Hilton Head at Renaissance Weekend, as we had been doing every year for nearly a decade. I loved being with old friends, playing touch football on the beach with kids and a few rounds of golf with a new set of clubs Hillary had given me. I enjoyed attending the discussion panels, where I always learned things from people who talked about everything from science to politics to love. That year, I especially liked one entitled What Id Tell the President over a Brown Bag Lunch.
Meanwhile, President Bush was going out in full stride. He visited our troops in Somalia, then called me to say he was headed to Russia to sign a strategic arms limitation treaty, START II, with Boris Yeltsin. I supported the treaty and said I was prepared to push its ratification in the Senate. Bush was also being helpful to me, telling other world leaders he wanted me to succeed as President and that they would find me a good man to work with on important problems.
On January 5, Hillary and I announced that we would enroll Chelsea in a private school, Sidwell Friends. Until that time, she had always been in public schools, and there were some good ones in the District of Columbia. After discussing it with Chelsea, we decided on Sidwell primarily because it guaranteed her privacy. She was about to turn thirteen, and Hillary and I wanted to give her the chance to live out her teenage years as normally as possible. She wanted that, too.
On January 6, with only two weeks to go before the inauguration, and the day before my first meeting with my economic team, the Bush administrations OMB director, Richard Darman, announced that the coming years budget deficit would be even higher than previously estimated. (My staff was convinced Darman had known about the larger deficit earlier and had delayed his bad-news announcement until after the election.) Regardless, now it was going to be much more difficult to juggle the competing priorities: to cut the deficit in half without weakening the fragile economic recovery in the short run; to find the right combination of spending cuts and tax increases necessary to reduce the deficit and increase spending in areas vital to our long-term economic prosperity; and to ensure more tax fairness for middle- and lower-income working people.
The next day, the economic team gathered around the dining-room table in the Governors Mansion to discuss our dilemma and explore which policy choices would produce the most growth. According to traditional Keynesian economic theory, governments should run deficits in bad economic times and balanced budgets or surpluses in good times. Therefore, the combination of tough spending cuts and tax increases necessary to halve the deficit seemed to be the wrong medicine for the present moment. Thats why FDR, after being elected on a promise to balance the budget, abandoned deficit reduction in favor of big spending to put people back to work and stimulate the private economy.
The problem with applying the traditional analysis to current conditions was that under Reagan and Bush, we had built in a large structural deficit that persisted in good times and bad. When President Reagan took office, the national debt was $1 trillion. It tripled during his eight years, thanks to the big tax cuts in 1981 and increases in spending. Under President Bush, the debt continued to increase again, by one-third, in just four years. Now it totaled $4 trillion. Annual interest payments on the debt were the third-largest item in the federal budget after defense and Social Security.
The deficit was the inevitable result of so-called supply-side economics, the theory that the more you cut taxes, the more the economy will grow, with the growth producing more tax revenue at lower rates than previously had been collected at higher ones. Of course it didnt work, and the deficits exploded throughout the recovery of the 1980s. Though supply-side theory was bad arithmetic and lousy economics, the Republicans stayed with it because of their ideological aversion to taxes, and because, in the short run, supply-side was good politics. Spend more, tax less sounded good and felt good, but it had put our country in a deep hole and left a cloud over our childrens future.
Coupled with our large trade deficit, the budget deficit required us to import tremendous amounts of capital every year to finance our overspending. To attract that kind of money and avoid a precipitous drop in the value of the dollar, we had to keep interest rates far higher than they should have been during the economic downturn that preceded my election. Those high interest rates inhibited economic growth and amounted to a huge indirect tax on middle-class Americans who paid more for home mortgages, car payments, and all other purchases financed through borrowing.
After we sat down to work, Bob Rubin, who was running the meeting, called on Leon Panetta first. Leon said the deficit had gotten worse because tax revenues were down in the sluggish economy, while spending was up, as more people qualified for government assistance and health-care costs soared. Laura Tyson said that if current conditions continued, the economy would probably grow at a rate of 2.5 to 3 percent over the next years, not enough to lower unemployment much or to ensure a sustained recovery. Then we got down to the meat of the coconut, as Alan Blinder, another of my economic advisors, was asked to analyze whether a strong deficit-reduction package would spur growth and new jobs by bringing down interest rates, since the government wouldnt provide as much competition with the private sector in borrowing money. Blinder said that would happen, but that the positive effects would be offset for a couple of years by the negative economic impact of less government spending or higher taxes, unless the Federal Reserve and the bond market responded to our plan by lowering interest rates substantially. Blinder thought that after so many false promises on deficit reduction over the last few years, a strong positive response by the bond market was unlikely. Larry Summers disagreed, saying that a good plan would convince the market to lower rates because there was no threat of inflation as the economy recovered. He cited the experience of some Asian countries to support his view.
This was the first of many exchanges we would have about the power over the lives of ordinary Americans exercised by thirty-year-old bond traders. Often my loud complaints about this, and Bob Rubins retorts to them, were funny, but the issue was dead serious. With national unemployment stuck at above 7 percent, we had to do something. Tyson and Blinder seemed to be saying that, for the long-term health of the economy, we had to cut the deficit, but that doing so would slow down growth in the short term. Bentsen, Altman, Summers, and Panetta bought the bond-market argument and believed deficit reduction would accelerate economic growth. Rubin was just running the meeting, but I knew he agreed with them. So did Al Gore.
Bob Reich missed the meeting but sent me a memo the next day, arguing that while the debt was a higher percentage of the gross domestic product than it should be, investment in education, training, and non-defense research and development were all at a much lower percentage of GDP than in the pre-Reagan years, and underinvestment was hurting the economy as much as the big deficits. He said the goal should not be to cut the deficit in half but to return it, and investments, to the percentage of GDP they had been before the Reagan-Bush years. He argued that the investments would increase productivity, growth, and employment, enabling us to reduce the deficit, but if we went for deficit reduction only, a stagnant economy with anemic revenues couldnt cut it in half anyway. I think Gene Sperling pretty much agreed with Reich.
While I was mulling it all over, we moved on to a discussion about how to achieve the deficit reduction we needed. In my campaign plan, Putting People First, I had proposed more than $140 billion in budget cuts. With the deficit numbers higher, we would have to cut more to reach my goal of halving the deficit in four years. That led to the first of many discussions of what should be cut. For example, you could save a lot by reducing the cost-of-living allowances, called COLAs, on Social Security, but as Hillary pointed out, almost half of all Americans over sixty-five relied on Social Security to live above the poverty line; the COLA cut would hurt them. We didnt have to make final decisions, and couldnt without discussing it with congressional leaders, but it was obvious that, whatever we ultimately decided, it wouldnt be easy.
In the campaign, in addition to the budget cuts, I had also proposed raising a comparable amount in new revenues, all from wealthy individuals and corporations. Now, to cut the deficit in half we would have to raise more revenues, too. And we would almost certainly have to scrap the broad-based middle-class tax cut, though I was still determined to cut taxes for working families earning about $30,000 a year or less by doubling the Earned Income Tax Credit. Those peoples incomes had been losing ground for twenty years, and they needed the help; moreover, we had to make lower-income jobs more attractive than public assistance if we were to be successful in moving people from welfare to work. Lloyd Bentsen went over the list of possible tax increases, saying that any tax would be hard to pass and the most important thing was to prevail. If our plan failed in Congress, it could endanger my presidency. Bentsen said we should present a number of options to Congress, so that if I failed to pass one or two, I could still claim success and avoid being crippled politically.
After the tax presentation, Roger Altman and Larry Summers argued for a short-term stimulus package to go with the deficit-reduction plan. They recommended about $20 billion of spending and business-tax reductions that at best would give the economy a boost, and at the least would prevent it from sliding back into a recession, which they thought was about a 20 percent possibility. Then Gene Sperling made a presentation of options for new investments, arguing for the most expensive one, about $90 billion, which would meet all my campaign commitments immediately.
After the presentations, I decided the deficit hawks were right. If we didnt get the deficit down substantially, interest rates would remain high, preventing a sustained, strong economic recovery. Al Gore strongly agreed. But, as we discussed how much deficit reduction we needed, I was concerned about the short-term drag that Laura Tyson and Alan Blinder predictedand Roger Altman and Gene Sperling fearedmight occur. After nearly six hours, we were headed in the deficit-reduction direction. Clearly, economic policy making, at least in this environment, was not science, and if it was art, it had to be beautiful in the eyes of the beholders in the bond market.
A week later, we held a second meeting in which I abandoned the middle-class tax cuts; agreed to look at savings in Social Security, Medicare, and Medicaid; and supported Al Gores suggestion of a broad-based energy tax, called a BTU tax, on the heat content of energy at the wholesale level. Al said that while the BTU tax would be controversial in states that produced coal, oil, and natural gas, it would fall on all sectors of the economy, lessening the burden on ordinary consumers, and would promote energy conservation, something we badly needed more of.
For several hours more, we again debated how much deficit reduction we had to try for, beginning five years out and working back to the present. Gore took a hard line, saying if we went for the biggest possible reduction, wed get credit for courage and create a new reality, making it possible to do previously unthinkable things, like requiring Social Security beneficiaries above a certain income level to pay income tax on their benefits. Rivlin agreed with him. Blinder said it might work if the Fed and the bond market believed us. Tyson and Altman were skeptical about avoiding short-term economic contractions. Sperling and Reich, who was present at this meeting, held out for more investments.
So did Stan Greenberg, Mandy Grunwald, and Paul Begala, who werent part of the meetings and were afraid I was sacrificing everything I believed in under the influence of people who werent part of our campaign and didnt care about the ordinary Americans who had elected me. In late November, Stan had sent me a memo saying my honeymoon with voters would be short-lived unless I moved quickly to address the problem of jobs and declining incomes. Sixty percent of those who said their finances had worsened in 1992, about a third of the electorate, had voted for me. He thought I could lose them with this plan. George Stephanopoulos, who sat in on the meetings, had to try to explain to Stan and his allies that the deficit was killing the economy, and that if we didnt fix it, there would be no economic recovery and no tax revenues to spend on education, middle-class tax cuts, or anything else. Bentsen and Panetta wanted as much deficit reduction as we could pass in Congress, an amount less than Gore and Rivlin advocated, but still a lot. Rubin, as moderator, was again keeping his own counsel, but I sensed he was with Bentsen and Panetta. After hearing everyone out, so was I.
At some point, I asked Bentsen how much wed have to reduce the deficit to rally the bond market. He said about $140 billion in the fifth year, with a five-year total of $500 billion. I decided to go with the $500 billion figure, but even with new spending cuts and revenue increases, we still might not be able to meet the target of cutting the deficit in half by the end of my first term. It all depended on the rate of growth.
Because of the possibility that our strategy would produce a short-term slowdown, we searched for ways to promote more growth. I met with executives of the Big Three automakers and Owen Bieber, president of the United Auto Workers, who said that while Japanese cars had almost 30 percent of the American market, Japan was still largely closed to American cars and auto-parts suppliers. I asked Mickey Kantor to find a way to open the Japanese market more. Representatives of the fast-growing biotechnology industry told me that our research-and-development tax credit should be extended and made refundable for young firms, which often didnt make enough money to claim the full credit under current law. They also wanted stronger protection for their patents against unfair competition, and modifications in and acceleration of the product-approval process of the Food and Drug Administration. I told the team to analyze their proposals and make a recommendation. Finally, I authorized the development of the $20 billion one-shot stimulus proposal to increase economic activity in the short run.
I hated to give up the middle-class tax cut, but with the deficit numbers worse, there was no choice. If our strategy worked, the middle class would see direct benefits worth far more than a tax cutin the form of lower home mortgages and lower interest rates on things like car payments, credit card purchases, and student loans. We also wouldnt be able to increase spending as much as I had proposed in the campaign, at least at first. But if deficit reduction brought interest rates down and growth up, tax revenues would increase, and I could still meet my investment objectives over four years. That was a big if.
There was also another big if. The strategy would work only if Congress adopted it. After Bushs defeat, the Republicans were more anti-tax than ever, so few, if any, of them would vote for any plan I put up with new taxes in it. A lot of Democrats who came from conservative districts would also be wary of tax votes, and liberal Democrats from safe seats might not support the budget if the cuts were too steep in programs they believed in.
After a campaign during which the economic problems of America were center stage, in a time when growth was lagging all over the world, I would begin my presidency with an economic strategy for which there was no precedent. It could bring enormous benefits if I could convince Congress to pass the budget, and if it got the hoped-for response from the Federal Reserve and the bond market. There were compelling arguments for it, but the most important domestic decision of my presidency was still one big gamble.
While most of the transition was occupied by the cabinet and other appointments and the development of our economic program, a number of other things were going on. On January 5, I held a meeting leading to the announcement that I would temporarily continue President Bushs policy of intercepting and returning Haitians who were trying to reach the United States by boat, a policy I had strongly criticized during the election. After Haitis elected president, Jean-Bertrand Aristide, was overthrown by Lieutenant General Raoul Cedras and his allies in 1991, Haitian sympathizers of Aristide had begun to flee the island. When the Bush administration, which appeared to be more sympathetic to Cedras than I was, began to return the refugees, there were loud protests from the human rights community. I wanted to make it easier for Haitians to seek and obtain political asylum in the United States, but was concerned that large numbers of them would perish in trying to get here in rickety boats on the high seas, as about four hundred had done just a week earlier. So, on the advice of our security team, I said that, instead of taking in all the Haitians who could survive the voyage to America, we would beef up our official presence in Haiti and speed up asylum claims there. In the meantime, for safety reasons, we would continue to stop the boats and return the passengers. Ironically, while human rights groups criticized the announcement, and the press characterized it as going back on my campaign pledge, President Aristide supported my position. He knew we would bring more Haitians to the United States than the Bush administration had, and he didnt want his people to drown.
On January 8, I flew to Austin, Texas, where I had lived and worked for McGovern more than twenty years earlier. After a reunion lunch with old friends from those days at Scholtzs Beer Garden, I held my first meeting since the election with a foreign leader, Mexicos president, Carlos Salinas de Gortari. Salinas was deeply committed to the North American Free Trade Agreement (NAFTA), which he had negotiated with President Bush. We were hosted by my longtime friend Governor Ann Richards, who was also a big supporter of NAFTA. I wanted to meet with Salinas early to make it clear that I cared about Mexicos prosperity and stability, and to make my case to him for the importance of labor and environmental side agreements to strengthen the treaty, and for greater cooperation against narco-trafficking.
On the thirteenth, my nominee for attorney general, Zo Baird, got into hot water when it came out that she had employed two illegal immigrants as household help and had paid the employers portion of Social Security taxes on them only recently, when she came into consideration for the Justice post. The employment of illegal immigrants was not that uncommon then, but it was a particular problem for Zo, because the attorney general oversees the Immigration and Naturalization Service. With Zos early confirmation unlikely, the incumbent assistant attorney general for the civil division, Stuart Gerson, would serve as acting attorney general. We also sent Webb Hubbell, the associate attorney general designate, over to the Justice Department to look after things.
Over the next two days, we announced several more White House staff appointments. Besides George Stephanopoulos as communications director, I named Dee Dee Myers the first female White House press secretary; put Eli Segal in charge of creating the new national service program; and made Rahm Emanuel the director of political affairs, and Alexis Herman director of public liaison. I was bringing several people up from Arkansas: Bruce Lindsey would handle personnel, including appointments to boards and commissions; Carol Rasco would be my assistant for domestic policy; Nancy Hernreich, my scheduler in the governors office, would oversee Oval Office operations, with an office just outside mine; David Watkins would oversee the administrative functions of the White House; Ann McCoy, the Governors Mansion administrator, came to work in the White House; and my lifelong friend Vince Foster agreed to come to the counsels office.
Among those who didnt come out of the campaign were my choice for White House counsel, Bernie Nussbaum, Hillarys colleague on the 1974 Nixon impeachment inquiry staff; Ira Magaziner, my Oxford classmate, who would work with us on health-care reform; Howard Paster, an experienced Washington lobbyist, who would manage our congressional relations; John Podesta, an old friend from the Duffey campaign, as staff secretary; Katie McGinty, Al Gores choice for our environmental policy person; and Betty Currie, Warren Christophers secretary in the transition, who would do the same job for me. Andrew Friendly, a young Washington, D.C., native would be the Presidents aide, going with me to every appointment and on every trip, making sure I read my briefing paper, and keeping in touch with the White House when we were away. Al had his own staff, with fellow Tennessean Roy Neel as chief of staff. So did Hillary, whose chief of staff, Maggie Williams, was an old friend of hers.
I also stated my support for David Wilhelm, my campaign manager, to succeed Ron Brown as chairman of the Democratic Committee. David was young and didnt have Ron Browns public presence, but almost no one did. His strength was grassroots organizing, and our party badly needed revitalization at the state and local levels. Now that we had the White House, I figured Al Gore and I would have to shoulder the lions share of the fund-raising and public pronouncements anyway.
Besides the appointments, I issued a statement strongly supporting the military action President Bush had taken in Iraq and, for the first time, said I would press for the trial of Serbian president Slobodan Milosevic for war crimes. It would take too long for that to happen.
During this period, I also hosted a lunch for evangelical ministers at the Governors Mansion. My pastor, Rex Horne, suggested that I do it, and put together the invitation list. Rex thought it would be helpful to have an informal discussion with them so that at least Id have some lines of communication into the evangelical community. About ten ministers came, including nationally known figures like Charles Swindoll, Adrian Rogers, and Max Lucado. We also invited Hillarys minister at Little Rocks First United Methodist Church, Ed Matthews, a wonderful man who we knew would stick with us if the lunch deteriorated into a war of words. I was especially impressed by the young, articulate pastor of Willow Creek Community Church near Chicago, Bill Hybels. He had built his church from scratch into one of the largest single congregations in America. Like the others, he disagreed with me on abortion and gay rights, but he was interested in other issues, too, and in what kind of leadership it would take to end the gridlock and reduce the partisan bitterness in Washington. For eight years, Bill Hybels came to see me on a regular basis, to pray with me, counsel me, and check on what he called my spiritual health. We argued from time to time. Sometimes we even agreed. But always he would be a blessing to me.
At the beginning of my last week in Arkansas, with moving vans in the driveway, I gave a farewell interview to Arkansas reporters, confessing to mixed emotions of pride and regret at leaving home: Ive been happy and proud and sad almost on the point of tears a couple of times. . . . I love my life here. One of my final tasks before leaving for Washington was personal. Chelsea had a pet frog she had initially gotten for a school science project. While we were taking our cat, Socks, with us, Chelsea decided she wanted to free the frog so that it could lead a normal life. She asked me to do it, so on my last day in Arkansas, I jogged down to the Arkansas River, took the shoebox the frog was in, climbed down a steep bank to the water, and let the frog go. At least one of us was returning to normal life.
The rest of us were excited about our new adventure, but apprehensive, too. Chelsea hated to leave her friends and the world she knew, but we told her she could have her pals come to stay with us often. Hillary was wondering how shed feel without the independence of a paying job, but she was eager to be a full-time First Lady, both to pursue the policy work she loved and to perform the traditional duties of the office. She had surprised me with the amount of time she had already spent studying the history of the White House, the various functions she would be responsible for there, and the important contributions of her predecessors. Whenever Hillary undertook a new challenge, she was always on edge at first, but once she got the hang of it, she relaxed and enjoyed herself. I couldnt blame her for being a little nervous. I was too.
The transition period had been hectic and hard. In retrospect, we did a good job picking a cabinet and sub-cabinet officials who were able and who reflected the diversity of America, but I made a mistake in not appointing a prominent Republican to a cabinet post as a demonstration of my desire to build bipartisan cooperation. I also kept my commitment to put the economy first, with a first-rate team, the economic summit, and a decision-making process that was well informed and subject to thorough debate. And as I had pledged, Al Gore was a full partner in the incoming administration, involved in all the strategy meetings and the cabinet and White House staff selections, while maintaining a high public profile.
During and after the transition, I was criticized for not following through on my campaign commitments to cut middle-class taxes, halve the deficit in four years, and take in the Haitian boat people. With respect to the first two issues, when I replied that I was simply responding to the worse-than-expected deficit projections, some critics said I had to know the Bush administration was lowballing the deficit until after the election, and therefore I shouldnt have used official government figures in putting together my economic plan. I didnt take those criticisms too seriously. By contrast, I thought some of the criticism on the Haitian issue was justified, given the unqualified statements I had made during the campaign. Still, I was determined to bring more asylum seekers to the United States safely, and eventually to restore President Aristide. If I succeeded, my commitment would be fulfilled.
I was also being criticized for appointing Zo Baird, for my tendency to want to know everything that was going on, and for taking too much time in making decisions. There was some merit to the hits. Zo hadnt concealed the nanny issue; we had simply underestimated its significance. As for my management style, I knew I had a lot to learn, and I had used the transition to absorb as much about as many aspects of the Presidents job as I could. For example, I dont regret a minute of the time I spent coming to grips with the economy during the transition. It stood me in good stead for the next eight years. On the other hand, I had always had a tendency to try to do too much, which also contributed to physical exhaustion, irritability, and my well-deserved reputation for tardiness.
I knew that the transition was only a foretaste of what the presidency would be like: everything happening at once. I would have to delegate more and have a better-organized decision-making process than I had as governor. However, the fact that so many sub-cabinet positions had not been finalized had more to do with the fact that the Democrats had been out of power for twelve years. We had to replace a lot of people, we were committed to casting a wide net for diversity, and there were a great number of people with a claim to be considered. Moreover, the required vetting process had gotten so complicated that it took too much time, as federal investigators pored over every piece of paper and ran down every petty rumor to find people who were bulletproof in the face of political and press assaults.
Looking back, I think the major shortcomings of the transition were two: I spent so much time on the cabinet that I hardly spent any time on the White House staff, and I gave almost no thought to how to keep the publics focus on my most important priorities, rather than on competing stories that, at the least, would divert public attention from the big issues and, at worst, could make it appear that I was neglecting those priorities.
The real problem with the staff was that most of them came out of the campaign or Arkansas, and had no experience in working in the White House or dealing with Washingtons political culture. My young staffers were talented, honest, and dedicated, and I felt I owed many of them the chance to serve the country by working in the White House. In time, they would get their sea legs and do very well. But in the critical early months, both the staff and I would do a lot of on-the-job learning, and some of the lessons would prove to be quite costly.
We also didnt give messaging anything close to the amount of attention that we had in the election, though its harder in government, even for the President, to get out the message you want every day. As I said, everything happens at once, and any controversy is more likely to dominate the news than a policy decision, no matter how important the decision might be. Thats what happened with the Zo Baird and gays-in-the-military controversies. Though they took up only a small part of my time, people watching the evening news could be forgiven for thinking I spent my time on nothing else. If we had thought more about this challenge and worked harder on it during the transition, Im sure we would have handled it better.
Despite the problems, I believed our transition had gone reasonably well. So, apparently, did the American people. Before I left for Washington, an NBC News/Wall Street Journal poll gave me a 60 percent favorability rating, up from just 32 percent in May. Hillary was doing even better; 66 percent saw her as a positive role model for American women, up from 39 percent in the earlier survey. Another poll taken by a bipartisan organization said that 84 percent of the people approved of my performance since the election. President Bushs job approval was up, too, nearly twenty points, to 59 percent. Our fellow citizens had regained their optimism about America, and they were giving me a chance to succeed.
On January 16, when Hillary, Chelsea, and I said good-bye to the friends who came to the Little Rock airport to see us off, I thought of Abraham Lincolns moving farewell remarks to the people of Springfield, Illinois, as he left the train station on his journey to the White House: My friendsNo one, not in my situation, can appreciate my feeling of sadness at this parting. To this place, and the kindness of these people, I owe everything. . . . Trusting in [God], who can go with me, and remain with you and be everywhere for good, let us confidently hope that all will yet be well. I didnt say it as well as Lincoln, but I did my best to convey that message to my fellow Arkansans. Without them, I wouldnt have been getting on that airplane.
We were flying to Virginia, where we would begin the inaugural events at Monticello, Thomas Jeffersons home. On the flight, I thought about the historical significance of my election and the momentous challenges ahead. The election represented a generational shift in America, from the World War II veterans to the baby boomers, who were alternately derided as spoiled and self-absorbed, and lauded as idealistic and committed to the common good. Whether liberal or conservative, our politics were forged by Vietnam, civil rights, and the tumult of 1968, with its protests, riots, and assassinations. We were also the first generation to feel the full force of the womens movement, the impact of which people were about to observe in the White House. Hillary would be the most professionally accomplished First Lady in history. Now that she had resigned from her law practice and her boards, my income would be the sole support of our family for the first time since we married, and she would be free to use her enormous talent as a full-time partner in our work. I thought she could have a more positive impact than any First Lady since Eleanor Roosevelt. Of course, such activism would make her more controversial with those who thought First Ladies should stay above the fray, or who disagreed with us politically, but that, too, was part of what our generational change meant.
Clearly, we represented a changing of the guard, but could we meet the tests of these tumultuous times? Could we restore the economy, social progress, and the legitimacy of government? Could we blunt the rise of religious, racial, and ethnic strife across the globe? In the words of the Time magazine citation in its Man of the Year edition, could we lead Americans to dig out of their deepest problems by reimagining themselves? Despite our victory in the Cold War and the rise of democracy around the world, powerful forces were dividing people and tearing at the fragile fabric of communities, both at home and abroad. In the face of these challenges, the American people had taken a chance on me.
About three weeks after the election, I had received a remarkable letter from Robert McNamara, who, as secretary of defense under Presidents Kennedy and Johnson, had prosecuted the Vietnam War. He had been moved to write me by a news st