In an Uncertain World (16 page)

But I just said yes. I've been asked a few times how this decision squared with my probabilistic approach to decision making. The answer, I think, is that I responded based on years of wanting to be part of an administration. However, a thorough probabilistic analysis would almost surely have come out the same way, because of the overwhelming positive weight I would have placed on this opportunity. My fascination with Washington and the political process—and my desire to get involved in issues I cared about—overrode all other considerations, and an unconscious probabilistic process may well have underlain my decision. As concerned as I was about the difficulty of making the NEC effective, I didn't focus on the hazards; I focused instead on how much I wanted to do it.

Leaving Goldman Sachs after twenty-six years wasn't easy—for me or for the firm. At a hastily convened partners' breakfast meeting in our conference room on the thirtieth floor, I said good-bye. The company had had 650 people, all in the United States, when I had started in 1966 and had grown more than tenfold by the end of 1992 into a global institution. I said the firm was in extremely good hands—Steve, the others on the Management Committee, and the larger partnership. I also tried to explain something of what the firm had meant to me. I didn't mention the story that had caught my attention in
The New York Times
all those years before, but it came to mind as I left. Goldman had given me a career filled with interest and challenge on the inside—with people I respected and whose values I shared—and a base for involvements on the outside. Armand Erpf—this man I'd never met—was right about what it meant to have that kind of base. Everything started from there.

CHAPTER FOUR

A Political Education

ON DECEMBER 10, 1992, I FLEW to Little Rock for the announcement of the first members of President Clinton's economic team. The group included me as director of what was to be the new National Economic Council, Lloyd Bentsen as Treasury Secretary, Roger Altman as deputy secretary of the Treasury, Leon Panetta as director of the Office of Management and Budget, and Alice Rivlin as Panetta's OMB deputy. Before we walked out for the press conference, Gene Sperling warmed us up with some practice questions. When he got to me, Gene asked, in a very serious tone, “How can a wealthy guy from Wall Street possibly relate to the problems of working Americans? Aren't you just totally unsuited to understanding the problems of ordinary people?”

“Well, I think you've got a good point,” I deadpanned. Everyone broke up.

“Bob, you and I are going to have to keep a lighter touch around here,” the President-elect said, laughing.

Clinton's comment made an important point that many of us would lose sight of from time to time under the pressures of the next several years. The prospect of all we had to do weighed heavily on our shoulders, especially at that moment, when we were just beginning. It's right to be serious about serious matters—but you also need an ability to escape the intensity. People deal with stress in different ways. My own steam valve was that existential sense I've described. I was highly focused on the policy issues we faced and the problem of making the NEC work. But I also tried at the same time to maintain a sense of perspective. I had to call upon that perspective with some frequency as I figured out my new job. My most urgent assignment during the transition was organizing the decision-making process around the President's economic program. It would involve making critically important choices, and we needed the best process possible.

The catch was that I had no idea what to do. I had experience with financial markets and management, but I didn't know the first thing about process inside a presidential administration. I had no idea how a body like the NEC might be made to function, who I would need on my staff, or what kinds of difficulties I might encounter. I'd never heard of a “decision memo.” Put bluntly, I didn't have the foggiest notion how to conduct myself in the White House. I figured that once you got to your new office, you'd call your family and say, “I'm here in the West Wing!” But what were you supposed to do after that? Many of the biggest government programs were barely familiar to me. I'd heard of Medicare, but I couldn't have explained it. In the NEC transition meetings we held at the Washington office of the accounting firm Coopers & Lybrand, people were talking about “discretionary caps,” “pay-as-you-go rules,” “CBO scoring,” and something called the “unified budget.” At times it felt like being in a foreign country with people speaking another language.

As I had done at Goldman Sachs, when I showed up for my first day of work not knowing what an arbitrageur did, I started writing down questions. How had other Presidents coordinated economic policy? What had worked and what hadn't? What would make this new body succeed or fail? How could we get cabinet members and senior White House staff to buy into the NEC process? What should my substantive role be? I had other questions about how to function in Washington. How could I be seen to have authority without behaving in an authoritarian manner? How could I follow my inclination to maintain a low profile but deal effectively with the media? How should I allocate my time? How could I do my job and still have time to think?

Legal pad in hand, I made the rounds and interviewed people. A few, such as Bob Strauss, I already knew well. Others, such as Brent Scowcroft, who had been national security advisor to Ronald Reagan and George Bush, I didn't know at all. What they had in common was knowing a lot about life and work in the White House. While some of the advice didn't work for me, my semi-legible notes from those conversations make an interesting primer on the ways of Washington. As much as I would have to learn from my own mistakes in subsequent years, I'm lucky to have been able to begin by learning from other people's.

Bowman Cutter, who had worked as Jimmy Carter's chief deputy director of OMB and who would become one of my two NEC deputies, told me to expect constant infighting. Bo's experience had been that vendettas in the White House were continual and that getting something done often meant battling the cabinet agencies. He said that intergovernment networking would be essential in my job and warned that even if I got along with other top-level people, turf wars among more junior officials could cause serious problems.

Stu Eizenstat, who had been Carter's chief domestic policy adviser, warned me about the potential frustrations of managing my time. He said I'd need to make twenty-five or thirty calls a day, which meant learning to be efficient on the telephone. I should always return calls from members of Congress and the cabinet first, on the same day if possible. In terms of managing my own team, he suggested that the time blocked out for weekly staff meetings should be inviolable.

Others had useful advice on dealing with the press. Roger Porter, who had been the assistant to the President for economic and domestic policy in the Bush administration, told me he had arrived thinking that White House staff should maintain a low profile in dealing with reporters. Over time, he began to feel that invisibility could make someone in his position less effective. Porter was unsure whether he had found the right balance. This conversation left me wondering how I could deal with the press without having a higher public profile than I felt comfortable with. Jody Powell, who had been Carter's press secretary, suggested I spend time talking to reporters on background instead of for quotation. That would keep me out of the limelight, save me from gaffes, avoid offending the journalists I chose not to talk to, and enable me to help advance our views and to create a sense of my relevance. Jody said that departing officials such as Scowcroft, Secretary of State James Baker, and Secretary of Defense Dick Cheney were good models for media relations. Scowcroft, in particular, had never sought attention, yet everyone knew he had been a major presence in the Bush White House.

Ken Duberstein, who had been Ronald Reagan's chief of staff, advised me on a staff person's relations with the President. He suggested that I always be in the room whenever the chief of staff spoke to the President about economic policy and also that I shouldn't go to see the President unless I had something substantive to say to him. At the same time, I should make sure to meet with the President regularly. Ken also gave me a sense of what my working life in Washington might be like. He said I should plan on a twelve-hour day, with an additional hour and a half of reading time at home at night. I should expect to work at least half a day on Saturdays but should try to avoid working on Sundays. And remember, he said as I left, the White House operator can find you wherever you are. Scowcroft made the workload sound even more overwhelming. He said he worked ninety-hour weeks and went jogging at midnight. I found all this alarming, because I knew I couldn't live that way. I need at least seven and a half hours of sleep a night, and time to read and relax.

Jim Johnson, my friend from the Mondale campaign, told me what a decision memo was and gave me advice about how to prepare one for the President. Jim said that such documents shouldn't be long or frequent and should always be channeled through the chief of staff. He also said that the staff person who prepared the memo should be in on any meetings with the President about the decision.

I also went to see Kirk O'Donnell, a highly respected Democratic political hand whose death at a young age in 1998 was a great personal tragedy and a heavy loss for the party. Kirk, a big, ruddy-faced Boston Irishman who had politics in his bones, told me he thought the Clinton administration would succeed or fail as a result of how it approached the economy in its first nine months. He also offered me some practical wisdom about Washington: I should cultivate relationships with six or eight key congressional figures who would serve as advocates for me on Capitol Hill. He also said I should operate on the assumption that anything I told anyone, even in a social setting, would be repeated. (This was, if anything, an understatement. I got to the point where I felt that if I talked to myself, it would leak.) Kirk also told me I needed someone to “watch my back.” I said I was probably going to hire Gene Sperling. O'Donnell, who had worked with Gene on the Dukakis campaign, said I'd be okay, since Gene had immense political savvy as well as valuable relationships in the press corps.

My job didn't require congressional confirmation, but I took the opportunity nevertheless to pay a couple of courtesy calls in the Senate. When I visited New York's senior senator, Democrat Daniel Patrick Moynihan, he offered a bit of historical perspective. Anything truly important in Washington took thirty-five years to accomplish, he said. Obviously Moynihan was speaking figuratively, but he was also making a useful point about the difficulty of making major changes through the political system—a lesson we would learn for ourselves when trying to reform health care.

If I'd been more attuned to Washington, I think I might have picked up the question that some of these people had about whether the NEC was likely to be successful. Six months later, Walter Mondale told me that when he'd first heard I had taken the job, he'd had his doubts: the other top people in the new administration, he'd felt, could see the NEC as threatening their own authority and direct access to the Oval Office. I did worry about some of these obstacles, but I didn't dwell on them, perhaps because I didn't understand that much about how government worked. Had I fully understood the pitfalls, I almost surely would still have taken the job, but with more trepidation.

As I considered all the advice I'd received, I realized I had two intertwined challenges. The first was to make the NEC an effective White House process. The second was to work with the President and the rest of the economic team to make sound and sensible economic policy decisions. Concentrating my mind on both issues was the President's directive to have an economic recovery program ready for public release within a month after his inauguration on January 20. Gene Sperling likes to remind me that when I was unable to convince him and others to skip the President's swearing-in, I called a meeting about the budget for 2:00
X
that day.

The NEC did have one indispensable asset: the President's intention to use it. From the start, Bill Clinton signaled clearly to the members of his economic team that he wanted to use this instrument to harmonize their efforts and coordinate policy. I remember Clinton commenting during my “job interview” in Little Rock on the harsh observations that were attributed to President Bush's budget director, Richard Darman, about some of his colleagues in a Bob Woodward series published in
The Washington Post
shortly before the election. Clinton thought that the Bush team's “frenzied strife” had greatly undermined his predecessor's effectiveness in dealing with economic issues.

By contrast, Clinton thought that Bush's effectiveness in foreign policy had been due in some fair measure to successful coordination by the National Security Council. Through the NSC, Scowcroft, Baker, and Cheney had successfully worked out their overlapping roles in foreign policy and military affairs, and had functioned as a team. The President-elect wanted the NEC to do the same for economic policy, which lacked an institutional mechanism for coordination. Different administrations had tried different approaches. When economic policy had been run from the White House, cabinet officials had often proved uncooperative. When the Treasury Secretary had assumed a coordinating role, he had often run into conflict with the other cabinet officials.

Clinton appeared to have a vision of good process that resembled the way Steve and I had functioned at Goldman Sachs. As a decision maker, Clinton wanted his aides and advisers to present him with the widest possible range of views and alternatives. He liked to encounter those views not just in memo form, but actually to hear people on his team discuss and debate the options in front of him. Clinton felt that live debate best enabled a decision maker to test and sharpen various options. Moreover, people sometimes persuade one another by discussing their differences, or generate new ideas. My experience in Washington strongly reinforced my view that good process makes good policy. And a fair, open process is more likely to result in participants buying into decisions with which they may differ.

I knew the NEC wouldn't work for five minutes if I tried to be autocratic. Although Clinton wanted economic issues to be presented to him through the NEC, I couldn't simply announce that I was in charge and declare myself the President's gatekeeper—and that would not have been in my nature in any case. I had to think of the other members of the economic team as my clients; they had to feel better off having the NEC than not having it. At times they might have preferred to go to the President directly on the issues they had primary responsibility for. But the advantage, which I think everyone came to see rather quickly, was that they would be at the table when all economic issues were discussed, and decisions on their issues, once made, would be far less subject to attack or reversal within the administration. To work, the NEC had to serve as an honest broker, summarizing everyone's positions and always presenting all sides of an issue fairly. In addition, I had as much right to express my views as anyone else did, but not to give disproportionate weight to my own opinions. So I would wear two hats—one as the neutral manager of a process, the other as a substantive participant. And I would have to clarify which hat I was wearing at any given time. The process had to be run with an integrity that won and maintained the trust of the other participants, or it wouldn't work.