Roger Altman, chairman and founder at Evercore, discusses the state of the U.S. economy, the four things that need to be included in the next round of stimulus, and But the politics of the Btu tax, as compared to other types of energy taxes, were not well considered. During the transition period the question was, Who are we going to nominate the head the RTC? There were certain others, I cant recall now, but a group of six or eight or nine, and we literally sat around with pieces of paper and drafts and hammered it out. He demonstrated his phenomenal grasp of policy issues, just through sitting there for many hours a day. We had so much going on that Bentsen asked me if I would just, on an interim basis, serve as interim chairman of the RTC. It wasnt particularly formed before then. That ostracism certainly hasnt afflicted the Clinton alumni. How are people in the future to understand why this became such a polarized situation with Congress? So, the decision-making process was more than a bit chaotic, and the decision on the energy taxes was reflective of that. You said earlier you were involved raising some money, but also providing some advice and guidance on economic policy. Right, but if you take too much pain up front. But the presumption was that the head of the agency of course did know that. Im Gary Burtless. But of course Republican support was sought. Clinton chose in Bentsen, with the possible exception of [Robert] Dole, who obviously wasnt a candidate for this, the most experienced person in the entire United States Congress. The number of possible votes at that stage had dwindled down to a tiny number, votes that were undecided. Its not as easy. I have no evidence, and I think I would have had, that he went into that meeting with the expectation that hed come out the way he did. Clinton, as we all know, is very open, but also a very undisciplined guy. So that resulted in my having, I suppose, a jack-of-all-trades job. But, I can tell youa bit of a digression. I put the President on the phone with her and of course, she cast the decisive vote. But, you know, its history, its participating right there in the actual, critical moment of history, and the sense of participating is very uplifting. Because if you decided not to go on NAFTA you really couldnt ever go back and say, Im a pro-trade President. Not the first time he met with another head of state, but I think his first summit outside this country. The Federal Government doesnt have much of a role in education. There was, I cant remember exactly, but we had some innumerable number of economists of all stripes and persuasions in favor of this. 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. But I didnt know where the President was on NAFTA. It was, in any normal historical context, yes, right of center because it focused on deficit reduction, tighter fiscal policy, more conservative budgeting. And trade was one of Clintons priorities and of course NAFTA was followed by a series of other trade agreements, GATT [General Agreement on Tariffs and Trade] and so forth. You had been asked to be a part of that enterprise. It turned out to be the equivalent of walking the plank. Welfare reform is a different issue, though. And the field against which Clinton ultimately competed was not a strong field. Bill Clinton, by that one- or two-line standing, may not make the cut for the top tier. Rector and Visitors of the University of Virginia, Notice of Non-Discrimination and Equal Opportunity. I did too. Theres some story that he demanded a commission on entitlement reform as a price. Yes. I dont know how many people would have the political courage to do that, but I know I wouldnt have. There was a concern that wed spill all the rest of our blood on NAFTA and have nothing left. We know youre extremely busy. You had made your choice to support him before it was clear that he was going to wow a lot of people in New York. Not at the outside, but eventually, I came into the second camp because I began to understand the scope of the issue. I believe it was a five-year statute of limitations and the expiration date was January 94 or February or something like that. Bentsen had run for Congress at a very young age, successfully, was re-elected two or three times, then quit and went into business and was very successful in business. Sure, but I dont feel we can claim tremendous credit for much of that. But the two major currency accords, the Plaza Accord and the Louvre Accord, were done in times of crisis in the foreign exchange markets. The administration made a change in the way economic policy-making was going to be made too, and I think that choice was made during the transition to have a National Economic Council, and that would have been a great unknown given the Treasurys historical role in economic policy-making. Bentsen and Dole were very close friends, which is a measure of the stature that Bentsen had. WebRoger Altman: Formerly deputy Treasury secretary, Altman resigned Aug. 29, 1994 following revelations he tipped the White House off to criminal referrals made by The period during which Bentsens views werent treated with quite enough respect was a very short one. Then, while the agreement called for there to be no further duties or tariffs or anything on everything, a whole variety of items were carved out in order to get certain votes. So if you want to call it the politics of the economy, The labor unions were overwhelmingly opposed. Well, I dont think theyd like it. That was the moment, that day. There were some folks from the White House Press Secretarys office who were in it. Nobody knew, especially in the White House. It will be differences of style, differences of perception. And I dont accept entirely your formulation, even though I think theres a lot to it. I also told him, which was quite a mistake, that I was thinking about recusing myself from the case because I realized that there was such a conflict here between being a member of the administration on one hand and being a Federal regulator on the other. Perhaps history will give Clinton credit for having been the man who made welfare reform happen. Were there any big-picture elements that you wanted to put into the puzzle right now or should we just go ahead and break and we can pick up with some of the specifics on these things? Well, there was, like most administrations, kind of a running shakeup. Now, maybe we caused that. For example, out of that Tokyo summit, bilateral summit, Clinton, [Kiichi] Miyazawa, or whoever the Prime Minister was at the moment, came a commitment from the Japanese to lower their current account deficit from what I think was 2.5 percent of GDP [Gross Domestic Product] to less than 2 percent. Richard Nixon resigned from office. Those carve-outs were all done on a tripartite basis. That happened, I want to say, late 93, that his nomination was effectively killed. I spent the last couple of hours of that period in the Oval Office with the President and that was quite unforgettable too because the President was hugely animated, to some extent discouraged, to some extent angry, and there were moments when I was the only one in there with him. So monetary policy has gone from being considerably more powerful than fiscal policy in 93, to being the only policy in town in 2003. I went back to the airport in Austin, reported that to Warren Christopher, and I think we were all announced within a week. I spoke in this wonderful old hall, in the legislative building, legislative chamber, it was great. It struck outsiders as the administration never passed up an opportunity to say, This is the preserve of the Federal Reserve. Then we put on our battle armor and went back into battle. Is he going to become President? If we have another Iran-Contra therell have to be an independent counsel, thered have to be. Its interesting too at this very moment with her book having just come out to watch some of the tapes being played on television about some of her own moments. It was quite a full-bore effort. You may remember that a few weeks earlier, only two or three weeks earlier, the Clintons had finally caved and agreed to the appointment of a special prosecutor, having opposed that, and Mr. [Robert] Fiske was designated. Its always a mistake to critique the Federal Reserve. I mean, not one encounter, until the early to mid 80s when I was quite involved in various aspects of the Democratic Party and there were a few forums at various places that I would attend and I would occasionally run into him. So it was job one, so to speak. Can you tell us about that? But I was to be sure, no matter what they asked me, guns? Senator Kennedy was for it from day one. At best I had an input, and in some cases it was just obvious that some of these other folks had to be in it. Some of them I think were insincere, but many of them were sincere. This was breaking news, CNN [Cable News Network] was interrupting its programming and so forth and President Clinton said, What is this about? I recall a large event, right after New Years, the fourth of January I believe, in 92, that I organized at their request, which was just simply to have a large number of people listen to Clinton give a speech. There could be a lot of backsliding on that, well have to see. The reason I posed the question the way I did is that since World War II theres been bipartisanship in Presidential leadership on free trade. In fact, Carters very first initiative was his stimulus program, neither of which incidentally succeeded, both of which were dropped and failed entirely. Could you see at that point a set of priorities emerging with the candidate? Did you have a lot of organizational responsibilities, or it was a going concern when you. We were all trotted out in Little Rock on the same day. Once again, were grateful for your time. Its been a big help to us and again, we know how extremely busy you are. I think each person makes his or her own decision. No, it never got to a vote. But I think if you study American history and you look at any number of earlier periods, the attacks on Abraham Lincoln for example comes to mind, the Andrew Jackson period, such extreme partisanship is common in American history. Then it went down to defeat. That was all part of the same ultimate mix. There were quite a few members where I had lead day-to-day responsibility. Anyway, that was the high point, by far, of my own service, both in terms of the drama and the sense of having contributed something important. If Im not mistaken, we were looking at a $350 billion deficit, up from about $260 or something that we had been generally using during the campaign. Because it promotes a lack of confidence in financial markets and, for that matter, a lack of confidence in the business community, a sense that that administration doesnt know what its doing. So one knew through the press who was going and so forth. A lot of kids who went to Georgetown were interested in having a good time, and most people who went to Chicago were really serious about their academic pursuits and the world around them. I also think Clinton knew he was going to go up against some of his oldest allies, whether it was Marian Wright Edelman, whomever it was, in terms of welfare reform, and was prepared to do it, but wasnt really looking forward to it. Having watched very carefully what Bob Carswell, who served for three plus years of the four Carter years as Deputy Secretary, did in that role, and that was actually rather different than my role. One is that it had a very rocky beginning in New Hampshire, and Im wondering if you have recollections about your reaction to the news events that occurred and to the electoral results in New Hampshire and how the President was able to deal with those things. Im sure there are lots of aspects of the preparation plan. So Clinton wisely determined that this was something that Bentsen ultimately had to make the call on. I was an Assistant Secretary, I had a few meetings with President Carter but not that many, so I wasnt familiar, But it was not the way you would organize, and one wonders, Mack McLarty was the Chief of Staff at the time and came out of a business. Anyway, a couple of days later I flew to Austin, Texas and met him and Mrs. [Beryl Ann] Bentsen in a hotel room in Austin. Youd seen him working with domestic policy issues and with members of Congress and support here. It was a successful fundraiser. I attended Georgetown University and I was a year ahead of him. For example, Putting People First was reissued, I believe in June of 92. Within a month, I remember vividly one day, I had seven radio shows. If were talking about 1991, I think his ideas were in formation. 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