they wouldn’t have been able to do it without the family leave law. “You know, the Republicans are always talking about family values,” she said, “but I think how your parents die is an important part of family values.”
On February 11, as we worked to finish the economic plan, I finally got an attorney general, having decided, after a false start or two, on Janet Reno, the prosecuting attorney of Dade County, Florida. I had known about and admired Janet’s work for years, especially her innovative “drug courts,” which gave first-time offenders the chance to avoid going to jail if they agreed to undergo drug treatment and check in regularly with the court. My brother-in- law Hugh Rodham had worked in the Miami drug court as an attorney with the public defender’s office. At his invitation, I had attended two sessions of the court myself in the 1980s, and was struck by the unusual but effective way the prosecutor, defense lawyer, and judge worked together to convince the defendants that this was their last opportunity to stay out of prison. The program was very successful, with a much lower recidivism rate than the prison system, at far less cost to the taxpayers. In the campaign, I had pledged to support federal funding to establish drug courts based on the Miami model all across the country.
Senator Bob Graham gave Reno a glowing endorsement when I called him. So did my friend Diane Blair, who had gone to Cornell with her thirty years earlier. So did Vince Foster, who was a very good judge of people. After he interviewed Janet, he called me and said in his droll way, “I think we’ve got a live one.” Reno also was immensely popular with her constituents, based on her reputation as a nononsense, tough but fair prosecutor. She was a native Floridian, about six feet tall, and had never married. Public service was her life, and she had performed it well. I thought she could strengthen the often-frayed relationships between federal law enforcement and its state and local counterparts. It concerned me a little that, like me, she was a stranger to Washington’s ways, but in Miami she had had extensive experience working with federal authorities on immigration and narcotics cases, and I thought she would learn enough to get along.
Over the weekend, we worked hard to finish the economic plan. Paul Begala had come to work in the White House a couple of weeks earlier, in large measure to help me explain what I was about to do in a way that was consistent with my campaign message of restoring opportunity for the middle class, something he believed most members of the economic team didn’t care enough about. Begala felt that the entire team should stress three points: that deficit reduction is not an end in itself, but the means to achieve the real objectives—economic growth, more jobs, and higher incomes; that our plan represented a fundamental change in the way government had been working, ending the irresponsibility and unfairness of the past by asking the wealthy big corporations, and other special interests that had benefited disproportionately from the tax cuts and deficits of the 1980s to pay their fair share of cleaning up the mess; and that we should not say we were asking people to “sacrifice” but to “contribute” to America’s renewal, a more patriotic and positive formulation. Begala wrote a memo containing his arguments and suggesting a new theme: “It’s NOT the deficit, stupid.” Gene Sperling, Bob Reich, and George Stephanopoulos agreed with Paul, and were glad to have some inside help in arguing the message.
While all this was going on in public, we were struggling hard with some big questions. By far the largest was whether to include health-care reform along with the economic plan in the omnibus Budget Reconciliation Act. There was a compelling argument for doing so: first, the budget, unlike all other legislation, isn’t subject to the filibuster rule, the Senate practice that allows just forty-one senators to kill any bill by debating it to death, blocking a vote until the Senate has to move on to other business. Since the Senate had forty-four Republicans, the probability that they would at least try to filibuster health care was high.
Hillary and Ira Magaziner badly wanted health care in the budget, the congressional leaders were open to it, and Dick Gephardt had urged Hillary to do it, because he was sure the Republican senators would try to filibuster health care if it were proposed by itself. George Mitchell was sympathetic for another reason: If health-care reform were introduced as a separate bill, it would be referred to the Senate Finance Committee, whose chairman, Senator Pat Moynihan of New York, was, to put it mildly, skeptical that we could come up with a workable health-care plan so quickly. Moynihan recommended that we first do welfare reform, and spend the next two years developing a health-care proposal. The economic team was adamantly opposed to including health care in the budget, and they had good reasons, too. Ira Magaziner and many health-care economists believed, correctly as it turned out, that greater competition in the health-care marketplace, which our plan would promote, would produce significant savings without price controls. But the Congressional Budget Office would not give credit for these savings in any budget we presented. Thus, to provide universal coverage, we had either to include a provision for backup price controls in the plan, raise taxes and cut other spending even further, or reduce the deficit target, which might adversely affect our strategy to lower interest rates. I decided to delay the decision until after I put the details of the economic plan before the people and the Congress. Not long afterward, the decision was made for me. On March 11, Senator Robert Byrd, the senior Senate Democrat and ultimate authority on the body’s rules, told us he would not make an exception for health care to the “Byrd rule,” which prohibited the inclusion of nongeneric items in the budget-reconciliation bill. We had enlisted everyone we could think of to make the case to Byrd, but he was adamant that health-care reform could not be construed as part of the basic budget process. Now, if the Republicans could sustain a filibuster, our health-care plan would be dead on arrival. In the second week of February, we decided to kick the health-care can down the road and complete the rest of the economic plan. I had become deeply immersed in the details of budgeting, determined to understand the human impact of our decisions. Most of the team wanted to cut farm supports and other rural programs, which they thought were unjustifiable. Alice Rivlin pushed hard for the cuts, suggesting I could then say I had ended welfare for farmers “as we know it.” It was a takeoff on one of my best campaign lines, a pledge to “end welfare as we know it.” I reminded my mostly urban budgeteers that farmers were good people who had chosen hard work in an uncertain environment, and though we had to make some cuts in their programs, “we don’t have to enjoy it.” Since we couldn’t restructure the whole farm program, reduce the subsidies in other nations’ budgets, or eliminate all the foreign barriers to our food exports, we ended up reducing the existing farm benefits modestly. But I didn’t enjoy it. Another thing we had to consider in proposing cuts, of course, was whether they had a chance to pass. For example, someone said we could save a lot of money by eliminating all the so-called highwaydemonstration projects, which were specific spending items members of Congress obtained for their districts or states. When the suggestion came up, my new congressional liaison, Howard Paster, shook his head in disbelief. Paster had worked in both the House and Senate and for both Democratic and Republican lobbying firms. A New Yorker with a brusque, candid manner, Howard snapped, “How many votes does the bond market have?” Of course, he knew we had to convince the bond market that our deficit-reduction plan was credible, but he wanted us to remember that it first had to pass, and inflicting personal pain on members of Congress was unlikely to prove a successful strategy. Some of the proposals we considered were so absurd they were comical. When someone suggested we impose fees for Coast Guard services, I asked how they would work. It was explained that the Coast Guard was quite often called upon to bring in boats that were in distress, often due to the negligence of the operators. I laughed and said, “So when we pull up alongside, or throw down a rope from a helicopter, before we do the rescue, we’re going to ask, ‘Visa? MasterCard?’” We let that one go, but eventually we did come up with more than 150 budget cuts.
Deciding on the tax increases was no easier than choosing the budget cuts. The toughest issue for me was the BTU tax. It was bad enough that I was going back on my commitment to cut middle-class taxes; now I was told we had to raise them, both to reach the $140 billion deficit reduction target in the fifth year and to turn the psychology of the bond market. The middle class had been shafted in the eighties, and Bush had been crippled by signing a gas-tax increase. In one fell swoop, if I proposed the BTU tax I would make the Republicans the anti-tax party again, largely to satisfy the hunger of the prosperous interest-rate setters for a little middle-class pain, in this case about $9 a month in direct costs, rising to $17 when indirect costs, in the form of higher prices for consumer products, were included. Lloyd Bentsen said that he had never had any fallout from voting for energy taxes, and that Bush was hurt by signing the 1990 gas-tax increase because of his “read my lips” pledge and the fact that the most militant anti-taxers were hard-core Republicans. Gore again pushed for the BTU tax, saying it would promote energy conservation and independence.
Finally, I gave in, but made some other changes in Treasury’s tax proposals that I hoped would reduce the tax burden on average Americans. I insisted that we include in the budget the full $26.8 billion cost of my campaign proposal to more than double the tax cut for millions of working families with incomes of $30,000 or less, called the Earned Income Tax Credit (EITC), and for the first time offer a more modest EITC to more than 4 million working poor Americans without dependents. This proposal would ensure that, even with the energy tax, working families with incomes of $30,000 or less would still receive a meaningful tax cut. On the campaign trail, I had said at virtually every stop, “No one with children who works full-time should live in poverty.” In 1993, there were a lot of people in that situation. After we doubled the EITC, more than four million of them moved out of poverty into the
