Monday, Dec. 21, 1992
Bill's Dream Team Of Supersalesmen
By DAN GOODGAME WASHINGTON
A FEW DAYS AFTER THE ELECTION, Bill Clinton sought advice from an unlikely quarter: the Bush White House. The President-elect wanted to talk process, not personalities, so he phoned Roger Porter, a senior Bush aide who had served on President Ford's economic policy council. Clinton quizzed Porter on his 1980 book, Presidential Decision Making, which recommends, among other things, that policy be deliberated on by a group similar to the National Economic Council that Clinton created last week.
The council will be chaired by the President and run from the White House by Robert Rubin, 54, now co-chairman of the Goldman, Sachs investment firm. In creating the group, Clinton will fulfill his campaign promise to place himself at the center of decisions on spending, taxes and trade, not reserve his full, hands-on attention for the foreign policy work of the National Security Council, the way Bush and many previous Presidents have done. Clinton's action also signaled his intention to restrict the power of Cabinet officers and to play them off against one another in the manner of Franklin Roosevelt.
Clinton's first Cabinet appointments reinforced the point: most are old hands in Washington and on Wall Street, chosen not for their new ideas but for their ability to sell, to Congress and financial markets, the program of public "investment" and deficit reduction on which Clinton campaigned. "Bill didn't want a brain trust," a transition official remarked. "He needed a sales force -- and that's what he's got." Indeed, Clinton, the Washington "outsider," might be said to have created the capital's most potent lobbying firm: Bentsen, Panetta, Rubin & Altman.
His choice for Treasury Secretary, Texas Senator Lloyd Bentsen, 71, is a business-friendly millionaire who chairs the powerful Finance Committee. California Congressman Leon Panetta, 54, named as Clinton's Budget Director, commands high regard from his peers for his work as chairman of the House Budget Committee. Bentsen's deputy will be Roger Altman, 47, who served at Treasury under President Carter. Altman, an investment banker like Rubin, knows financiers from New York to Tokyo.
This top shelf of advisers drew applause from some surprising corners. The Wall Street Journal editorial board praised the team as "all-in-all reassuring." Bay Buchanan, a conservative Republican activist, joked that "the only liberal in the group is Bill Clinton."
Many Democrats, however, voiced suspicion of Bentsen's enthusiasm for granting special tax breaks to oilmen, real estate developers and wealthy investors. Jeff Faux, president of the Economic Policy Institute, a Washington think tank allied with organized labor, complained that "you don't want to run your economic policy entirely around the concerns of Wall Street investors." Elena Hanggi from Little Rock, who trains community organizers and is invited to Clinton's economic conference this week, expressed "disappointment" at the pro-business slant of his top economic advisers but remains cautiously optimistic. In Washington as in Arkansas, she said, "Bill Clinton is trying to make changes without making waves."
In his second tier of economic advisers, Clinton reached out to women and liberals and added several allies. Laura D'Andrea Tyson, 45, a Berkeley economics professor named to chair the President's Council of Economic Advisers, counseled Clinton during the campaign on trade and industrial policy, and recommends a larger role for government in directing the economy. Robert Reich, 46, a Harvard lecturer named Labor Secretary, has been a close friend of Clinton's since their time at Oxford University as Rhodes scholars. ^ Reich argues that deficit spending is justified if it is directed at such areas as public transportation and job training. But Alice Rivlin, 61, the first director of the Congressional Budget Office, named Deputy Budget Director, ardently opposes deficit spending and advocates transfer of more government functions to the states. Secretary of Commerce-designate Ronald Brown, 51, who helped Clinton mend fences with black voters as Democratic National Chairman, is a sometime lobbyist with close ties to the business community. The corporate world is also likely to feel comfortable with incoming White House chief of staff Thomas ("Mack") McLarty, 46. A kindergarten classmate and former campaign treasurer for Clinton, he is chief executive of his home state's largest utility, Arkla, Inc.
The appointment of such deficit hawks as Panetta and Rivlin was widely -- and probably incorrectly -- read last week as a sign that Clinton is leaning away from additional deficit spending early next year to stimulate the economy. To be sure, encouraging reports on job creation and economic growth have convinced many economists, and some of Clinton's aides, that such stimulus is no longer necessary. But those same reports have galvanized traditional liberals among Clinton's supporters, who fear that good economic news will undermine the rationale for new deficit spending on social programs and public works projects.
Before he can forgo fiscal stimulus, Clinton "needs clear and convincing evidence that the jobs are coming back, and the reports we've seen so far just aren't enough," Reich explained last week. "It's not just the unemployed we're concerned about, but also the part-timers who want to work full time and the discouraged workers" -- those who have been looking for jobs so long that they have given up and fallen out of the statistics. Clinton voiced the same view, telling reporters, "We are nowhere near to knowing that this short-term recession . . . is over."
Clinton emphasizes that he will watch the economic indicators through mid- January before deciding whether new deficit spending is needed. In any case, he insists, he will seek long-term deficit reduction as well as new public investments in education, job training and public works. But new spending will be easier to accomplish if it is simply borrowed from future generations, Reagan-Bush style, rather than painfully extracted from existing programs.
Even some of the deficit hawks among Clinton's advisers concede the political logic of early deficit spending. It would be politically foolish, says an aide, to "start our Administration on a negative note" by not only raising taxes on the rich but also cutting spending on popular middle-class subsidies and "creating a lot of enemies."
This argument has a familiar and ironic ring to top officials of the outgoing Bush Administration, which also determined four years ago that it would avoid setting a "negative" tone; instead, Bush decided, he would wait to cut spending "in the second term." Clinton, however, faces higher expectations: he was elected to "do something," in contrast to Bush, who insisted that the economy was healing itself.
Bruce Bartlett, a senior Treasury Department economist, believes new fiscal stimulus is unnecessary but remains likely so that Clinton can "look activist" and for other political reasons. "Just as tax cuts are the glue that holds Republican coalitions together, increased spending is the glue that holds the Democratic coalition together," he says. "The Democrats have promised so much, they need an excuse to spread around some money to the people who supported them."
But other experts warn that the Clinton team must adapt its plans to the stronger recovery. "There's not only less pressure for Clinton to do something in the way of net fiscal stimulus, there's now a lot of pressure for him to start to swing to deficit reduction," says Hugh Johnson, chief economist at First Albany Corp. If the economy continues to improve through January without a reduction in Clinton's spending plans, he adds, "it would worry me and worry the bond markets. Then we're looking at something inflexible and ideological. It would look like we've got a tax-and-social- spend ing Democrat on our hands."
Aides to Clinton reply that the rationale for short-term fiscal stimulus is not merely to reward backers but also to help buy support for a long-term plan to reduce federal spending and deficits. "If you're going to ask people to take their lumps on deficit reduction," an adviser says, "you have to give them some sugar along with it." Thus lawmakers who met with Clinton last week in Washington reported that he is leaning toward a net fiscal stimulus of at least $20 billion in 1993 unless the economy unexpectedly rockets into much faster job growth before mid-January.
The test for Clinton and his team will come soon thereafter, when they try to push spending cuts through Congress. At their sessions with Clinton last week, lawmakers quickly promised their cooperation. Meanwhile, however, Democratic Senators have been lining up votes to oppose Clinton's desire for a line-item veto or enhanced rescission authority to reduce pork-barrel spending. Congressman John Dingell of Michigan differs sharply with Clinton on trade and environmental issues that must move through his House Energy and Commerce Committee. And Senate minority leader Robert Dole, who needs only to hold the votes of 41 of his 43 Republicans in order to block any proposed legislation with filibusters, quips with a wolfish grin that "gridlock isn't always such a bad thing." This is the home team that smugly awaits the arrival of Clinton's new team.
With reporting by Tom Curry/New York