My Life

contributions from other countries and the World Bank, that brought the total aid package to just under $40 billion.

Though they favored going forward, Sandy Berger and Bob Rubin again pointed out the risks. A newly published poll in the Los Angeles Times said the American people opposed helping Mexico by 79 percent to 18 percent. I replied, “So a year from now, when we have another million illegal immigrants, we’re awash in drugs from Mexico, and lots of people on both sides of the Rio Grande are out of work, when they ask me, ‘Why didn’t you do something?’ what will I say? That there was a poll that said 80 percent of Americans were against it? This is something we have to do.” The meeting lasted about ten minutes.

The next day, January 31, we announced the aid package with money from the Exchange Stabilization Fund. The loan agreement was signed a couple of weeks later at the Treasury Building, to howls of protest in Congress and grumbles among our G-7 allies, who were upset that the IMF director had made the $18 billion commitment to Mexico, and to us, without their prior approval. The first money was released in March, after which we continued to make regular disbursements, even though things didn’t really get better in Mexico for several months. By the end of the year, however, investors had entered the Mexican markets again and foreign exchange reserves had begun to build up. Ernesto Zedillo had also instituted the reforms he had promised.

Though it was tough at first, the aid package worked. In 1982, when the Mexican economy collapsed, it had taken almost a decade for growth to return. This time, after a year of severe recession, the Mexican economy started to grow again. After 1982, it had taken seven years for Mexico to regain access to the capital markets. In 1995, it took only seven months. In January 1997, Mexico repaid its loan in full, with interest, more than three years ahead of schedule. Mexico had borrowed $10.5 billion of the $20 billion we made available, and it paid a total of $1.4 billion in interest, almost $600 million more than the money would have earned had it been invested in U.S. Treasury notes, as other Exchange Stabilization Fund monies were. The loan turned out to be not only good policy but also a good investment. New York Times columnist Tom Friedman called the Mexican loan guarantee “the least popular, least understood, but most important foreign policy decision of the Clinton Presidency.” He may have been right. As for popular opposition, 75 percent of the people had also opposed the Russian aid package; my decision to restore Aristide in Haiti was unpopular; and my subsequent actions in Bosnia and Kosovo met with initial popular resistance. Polls can be helpful in telling a President what the American people think, and which arguments may be most persuasive at a particular time, but they cannot dictate a decision that requires looking down the road and around the corner. The American people hire a President to do the right thing for our country over the long run. Helping Mexico was the right thing for America. It was the only sensible economic course, and by taking it, we proved ourselves to be, once again, a good neighbor.

On February 9, Helmut Kohl came to see me. He had just been reelected, and he confidently predicted that I would be as well. He told me we were living in turbulent times, but the end would bring me out all right. At the press conference after our meeting, Kohl paid a moving tribute to Senator Fulbright, who had died shortly after midnight at the age of eighty-nine. Kohl said he came from a generation who, when they were students, “wanted nothing more than to obtain a Fulbright scholarship,” and that, across the world, Fulbright’s name was associated “with openness, with friendship, and with people striving together.” At the time of his passing, more than 90,000 Americans and 120,000 students from other countries had been Fulbright scholars.

I had gone to Senator Fulbright’s home to visit him not long before he died. He had had a stroke and his speech was somewhat impaired, but his eyes were bright, his mind was working, and we had a good last visit. Fulbright would loom large in American history—as I said at his memorial service, “Always the teacher and always the student.”

On February 13, Laura Tyson and the other members of the Council of Economic Advisers, Joe Stiglitz and Martin Baily, gave me a copy of the latest Economic Report of the President. It highlighted our progress since 1993, as well as the persistent problems of income stagnation and inequality. I used the occasion to push the Middle-Class Bill of Rights and my proposal to increase the minimum wage by 90 cents over two years, from $4.25 to $5.15 an hour. The raise would benefit 10 million workers, adding $1,800 a year to their incomes. Half the increase was necessary just to get the minimum wage (after inflation) back to what it had been in 1991, the last time it was raised. The minimum wage was a favorite cause of most Democrats, but most Republicans opposed minimum wage increases, claiming that they cost jobs by increasing the cost of doing business. There was little evidentiary support for their position. Indeed, some young labor economists had recently found that a moderate minimum wage increase might lead to a modest increase—not decrease—in employment. I had recently seen a television interview with a minimum wage worker in a factory in southwest Virginia. When asked about rumors that the increase might cause her employer to lay off her and other co-workers and do more work with machines, the woman smiled and told the interviewer, “Honey, I’ll take my chances.”

In the fourth week of February, Hillary and I paid a two-day state visit to Canada, where we stayed at the American ambassador’s residence with Ambassador Jim and Janet Blanchard. Jim and I had become friends in the 1980s, when he was governor of Michigan. Canada is our largest trading partner and closest ally. We share the longest unguarded border in the world. In 1995, we were working together on Haiti, on helping Mexico, and on NATO, NAFTA, the Summit of the Americas, and APEC. While we had occasional disputes over trade in wheat and timber and over salmon-fishing rights, our friendship was broad and deep.

We spent a lot of time with Prime Minister Jean Chretien and his wife, Aline. Chretien would become one of my best friends among world leaders, a strong ally, confidant, and frequent golfing partner. I also spoke to the Canadian parliament, thanking them for our economic and security partnerships and the rich cultural contributions of Canadians to American life, including Oscar Peterson, my favorite jazz pianist; singer-songwriter Joni Mitchell, who wrote “Chelsea Morning”; and Yousuf Karsh, the great photographer who had become famous for his portrait of Churchill scowling after Karsh jerked the omnipresent cigar out of his hand, and who had photographed Hillary and me in less forbidding poses. March got off to a good start, at least from my point of view, when the Senate failed, by only one vote, to get the two-thirds majority necessary to pass the balanced budget amendment. Though the amendment was popular, virtually every economist thought it was a bad idea because it restricted the ability of the government to run deficits under appropriate circumstances during a recession or a national emergency. Before 1981, America had not had much of a deficit problem; only after twelve years of trickle-down economics had quadrupled the national debt did politicians begin to argue that they would never make responsible economic decisions unless forced to do so by a constitutional amendment. While the debate was going on, I urged the new Republican majority, who were pushing the amendment, to say exactly how they were going to balance the budget. I had produced a budget less than a month into my term; they had been in control of Congress for nearly two months and had still not presented one. They were finding it difficult to transform their campaign rhetoric into specific recommendations. Soon, the Republicans offered a taste of the budget to come by proposing a package of cuts, called rescissions, in the current year’s budget. The cuts they chose proved that the Democrats had been right on target in their criticism of the contract during the campaign. The GOP rescissions included the elimination of 15,000 AmeriCorps positions, 1.2 million summer jobs for young people, and $1.7 billion in education funds, including nearly half of our drug-prevention funds, at a time when drug use among young people was still rising. Worst of all, they wanted to cut the school lunch program and WIC, the nutrition program for women, infants, and children under five, which, until then, had always had strong support from both Republicans and Democrats. The White House and the Democrats had a field day fighting those cuts.

Another GOP proposal that met stiff resistance was its move to eliminate the Department of Education, which, like the school lunch program, had always enjoyed strong bipartisan support. When Senator Dole said the department had done more harm than good, I joked that he might be right, because for most of the time since its inception, the department had been under the control of Republican secretaries of education. By contrast, Dick Riley was doing far more good than harm. While pushing back on the Republican proposals, I was also promoting our agenda in ways that didn’t require congressional approval and demonstrated that I had gotten the message from the last election. In the middle of March, I announced a regulatory reform effort developed by Al Gore’s Reinventing Government project that focused on improving our environmental protection efforts through providing market incentives to the private sector, rather than imposing detailed regulations; the 25 percent reduction in paperwork requirements would save them 20 million work hours per year. The “Rego” effort was working. We had already reduced the federal workforce by more than 100,000 and eliminated 10,000 pages of federal personnel manuals; soon we would earn almost $8 billion by auctioning slices of the broadcast spectrum for the first time; and eventually we would scrap 16,000 pages of federal regulations with no harm to the public interest. All the Rego changes were developed according to a simple credo: protect people, not bureaucracy; promote results, not rules;