[Weekly Compilation of Presidential Documents Volume 36, Number 41 (Monday, October 16, 2000)]
[Pages 2382-2410]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Interview With Joe Klein of the New Yorker in New York City

July 5, 2000

President's Historical Perspective

    Mr. Klein. Do you essentially agree with my sense that you had--that 
the big issue has been moving from the industrial age to the information 
age, and that--I mean, the toughest thing----
    The President. Yes. The short answer to that is yes.

[[Page 2383]]

    Mr. Klein. ----to explain to people is, you take something like--how 
can being in favor of affirmative action and being in favor of welfare 
reform be part of the same vision? How can being in favor of free trade 
and being in favor of universal health insurance be part of the same 
vision? There are people on the right or the left who would say, ``You 
can't do that.'' And yet, I think that they are part of the same vision. 
But my first question is, how would you describe that vision?
    The President. I think my view--I saw my Presidency as a 
transformational period, and basically, America has gone through two 
before. Maybe it could start if we did it in historical times. There 
were basically--I look at American history in the following--we had the 
creation--how we got started and sort of filling out the elements of the 
National Government and defining what it meant. And that basically went 
from the Declaration of Independence to the Constitution, Washington's 
Presidency, and the appointment of John Marshall as Chief Justice--which 
is a very important thing--and then, ironically, through Jefferson's 
Presidency, with the purchase of Louisiana and the Lewis and Clark 
expedition, and then the next big challenge was, how would we adapt that 
to our growing industrialization? And how did we get rid of slavery, 
which was inconsistent with our principles? So obviously, that's what 
Lincoln and the Civil War and the constitutional amendments and 
everything that happened on civil rights after that was about slavery. 
But there was no single President that managed the process, if you will, 
or laid out a framework from the agricultural society to an industrial 
society. But that's part of what the railroads, the canals was all 
about, and it's part of what--and Lincoln was a part of that with the 
Morrill Land Grant Act, with the colleges.
    Mr. Klein. This happened too slowly for----
    The President. But it happened over a long period of time. Then, 
there was the transformation from the--you know, it happened over a long 
period of time as we slowly became a balanced society. But then, when we 
burst onto the world scene as a major national industrial power, that 
process was basically defined by Theodore Roosevelt and Woodrow Wilson. 
And I sort of saw this period in parallel with that.
    The rest of the 20th century was mostly about dealing with the rise 
of--first, the Great Depression; then the war and the need to defeat 
totalitarian systems, which was part of the war and the cold war; and 
dealing with the specific challenges at home, principally civil rights, 
the women's movement, and the growth of environmental movement in 
America.
    So here, we are moving into, basically, from an industrial society--
an industrial economy to an information economy, and at the same time 
moving into an ever more globalized economy, which also is more and more 
of a global society in that we share common challenges and common 
interests that go beyond economics. And the globalization of the media 
has accelerated that.
    So I saw my challenges trying to, first of all, maximize America's 
presence in the information economy; second, to try to maximize our 
influence in the welfare of our country and like-minded people around 
the world in a globalized society. And then, the other--and I'll get to 
your questions--and then the third big thing for me was trying to make 
people have a broader and deeper vision of the American community and 
how to handle diversity and how we would finally get a chance to see, in 
ways we never had before, what it meant to make one out of many, what 
our national motto meant.
    And I think the--and you ask me, well, how can you reconcile those 
things? It seems to me that the two operational strategies we had to 
pursue those three great goals were, one, the Third Way political and 
social philosophy. If you believe in opportunity and responsibility and 
community, then it's perfectly clear why you would be for affirmative 
action and a global trading system, you know, why you would be for 
health care for everybody and whatever else you said--what was the other 
thing?
    Mr. Klein. Free trade. No, I said that.
    The President. Welfare reform.
    Mr. Klein. Welfare reform.
    The President. Welfare reform, because first of all, work is the 
best social program. Secondly, it is imperative to have a basic

[[Page 2384]]

work ethic if you believe in individual responsibility and you believe 
it gives meaning and direction to life, and I do. But if you do, you 
also recognize that there is no society--no society has succeeded in 
providing access to health care to everybody without some governmental 
action.
    Mr. Klein. But there have been people all along, as you know--I 
mean, you and I had this same conversation in 1991. People all along 
said, ``This is just an electoral strategy. It isn't a Government 
strategy.''
    The President. It was never just an electoral strategy to me.
    Mr. Klein. Well, me, neither, as you know. And the question--I guess 
my question is, do you feel that you were ever able to really 
communicate the depth and breadth of this to the public?
    The President. Yes, but only--probably only at the State of the 
Union Addresses, because it's probably the only time I ever got to say 
it unfiltered. If I made an error in those, even though they always 
received very high public approval ratings, they said it always took me 
so much time to explain my specific ideas in education or whatever, I'm 
not sure I ever took full advantage of the opportunity to lay the 
coherent philosophy out--because I do think at those points, that people 
got it.
    But what I was going to tell you, if I could go back--I think we had 
the transformation from the industrial economy to the information 
economy, from the idea of a national society to an idea of a more global 
society in which nation-states matter. I think the nation-state will 
matter more in some ways in the 21st century. We can talk about that 
some.
    And thirdly, the whole idea of defining America where our diversity 
was something to be cherished and celebrated because--because our common 
humanity and common values were more important.
    And then, operationally, I think, the two things I think that 
mattered, I made some--the whole Third Way political and social 
philosophy, one; and second is sort of a relentless focus on the future, 
making people always--trying to force people to always think about not 
only what we're doing, how does it affect today, but what's it going to 
be like 5 years from now, 10 years from now, 20 years from now? And I 
think that is often--that hasn't often been the business of the 
Government.
    But if you go back to Roosevelt's focus on conservation or Wilson's 
struggle of--failed attempt at the League of Nations, I think what made 
them both great Presidents for the transformational period America was 
in is that they were not only successful in the moment, by and large, 
but they had this focus on the future; they kept trying to spark the 
public imagination with the future. And that's--I hope very much that 
the announcement of this genome project, although I think it fills 
people with foreboding as well as hope, will tend to spark future 
orientation on the part of the voters, so the issues that are plainly 
before us, but won't be felt for a few years will have more effect on 
the debate and also on people's voting rights.

Trade

    Mr. Klein. But it's a difficult thing. Charlene Barshefsky said to 
me that there are times that you've really been concerned, that the 
expression you used was that you hadn't found your voice on trade, which 
is the equivalent of----
    The President. Well, one of the things--she, of course, has to deal 
with it. But the two things in trade that have frustrated me most, 
although I think we've got a great record--and you can go from NAFTA to 
the WTO, to the Africa/CBI, to launching the free trade of the Americas 
to--China.
    Mr. Klein. The reason I raised it was because what you just said 
about the genome reminded me--I just read your remarks about NAFTA in 
October '93, and it was very similar, too.
    The President. Yes. And then, of course, China, and then in between 
we had 270-odd agreements, and we had the Mexican financial crisis and 
the Asian financial crisis. But the thing that bothered me about trade--
the two things that have bothered me about trade, I think, are: One, I 
have so far not created a consensus within my own party, at least among 
the elected officials, for the view of trade which I hold. And two--and 
I think it's genuine; that is, I don't think this is just politics. I 
think it's how people view the

[[Page 2385]]

world--the second thing, and closely related to that, is that--I went to 
Geneva twice, and I went to Davos once, and then I went out to Seattle 
to try to make the case that you can't have a global trading system 
apart from a global social conscience, anyway, where there is a 
legitimate place for the voices of those who care about the rights of 
workers, the condition of children in the workplace, the impact of 
economic development on the environment, both nationally and globally. I 
haven't yet, at least, been able to convince people that there is a 
synthesizing vision here that has to drive not only a global trading 
system but these other initiatives as well. And I suppose I shouldn't be 
surprised, because it's a fairly new debate.
    And one of the great things that always struck me is, if you look at 
the people who were demonstrating in Seattle, while I think they were 
all sincere--that is, they believed in what they were demonstrating 
against--their sense of solidarity was truly ironic, because they had 
completely conflicting positions.
    Mr. Klein. What?
    The President. I mean, for example, a lot of the labor union people 
that demonstrated believe that even though--for example, they think that 
even though this China deal is a short-term benefit to American industry 
because China drops their barriers, that they're so big that there will 
be so much investment there that they will develop a great deal of 
industrial capacity and that wage levels will be so low that it will 
cost the developed world, and particularly America because our markets 
are more open than the Europeans, a lot of our industrial base within a 
fairly short term. And that's what they really believe. I don't believe 
that, but that's what they believe.
    And then you have the people that are demonstrating on behalf of the 
Third World, and they believe our concern for labor and the environment 
is a protectionist ruse to protect American high-wage jobs.
    But they're all out there in the streets in Seattle demonstrating 
together, because they're genuinely frustrated about the way the world 
is going and they kind of don't like this whole globalization thing. 
They think it's going to lead to further loss of control by ordinary 
people over the basic circumstances of their lives, and that bothers 
them.
    Mr. Klein. I think that this is--to kind of put a cap on the first 
question--I mean, that's so much at the heart of what you've been trying 
to overcome. I was talked to Zoe Baird, who said that she always 
remembers the statistics that you used, I think in around '95, that more 
jobs had been created by companies owned by women than had been lost by 
Fortune 500 companies. You always tried to make the future less 
frightened for folks. And yet, I'm not sure you're convinced that you 
made the case.
    The President. Well, I think I made the case to the people that were 
open to it, but I believe that--I think that it's hard. Everybody's for 
change in general, but normally against it in particular. You know, 
what's that Dick Riley used to say? ``Let's all change. You go first.'' 
[Laughter] That's his sort of formulation of it. It shouldn't be 
surprising. But I still believe, first of all, I think that what I said 
to the American people is true and right. Secondly, I don't think there 
is any alternative to change. So I think the real question is, how do 
you bring your, basically, values that don't change--how do you 
translate them into specific approaches and policies that have the 
greatest chance of enhancing those values in the world you're going to 
live in? That's the way I look at this.
    And I think that for the United States to have essentially turned 
away from this world, I think, would have been a terrible mistake. And 
in fact, I think the only mistake we've made in this whole thing is not 
accelerating the integration of the free trade area of the Americas 
more--more rapid.

Deficit Reduction

    Mr. Klein. Let me ask you some specific questions. Let's take a 
walk; start in '93. The First Lady said to me the other day that she 
believed that deficit reduction was a predicate for doing all the rest 
of the stuff.
    The President. Absolutely.
    Mr. Klein. She compared it to education in Arkansas when you were 
reelected.
    The President. The '93 economic plan made all the rest of this 
possible.
    Mr. Klein. There were a fair number of people on your staff that 
were saying, you

[[Page 2386]]

know, it would throw the economy into recession. And you were dealing--
it was a theory at that point that if you lowered the deficit, interest 
rates would come down, and you would achieve the kind of growth that you 
have achieved. I mean, what made you think that----
    The President. First of all, let me back up a little bit. The people 
on the staff who favored somewhat--there was nobody on my staff that was 
against vigorous deficit reduction. There were some who were afraid that 
to make the decisions we would have to make to get the $500 billion, 
which is what Lloyd Bentsen and Bob Rubin felt was sort of the magic 
psychological threshold we had to cross to get the bond markets and the 
stock market to respond in an appropriate way, they were afraid that if 
we did that, we would have to shelve too much of our progressive 
commitments in the campaign.
    Now, what finally happened was, we came up with a plan that raised 
income taxes only on the top 1.2 percent of the people, which I had, 
after all, promised to do in the '92 campaign. It wasn't like I didn't 
tell upper income people who supported me I wouldn't try to raise their 
taxes. But we had to raise them at the very end. Bentsen came in with a 
plan that essentially lifted the income cap off the Medicare taxes, 
which closed the gap. And we stuck with the gas tax, which Charlie 
Stenholm and some of our conservatives who were big deficit hawks were 
worried about, because they were afraid it would make our guys 
vulnerable, and I think it did. It was the only thing that average 
people had to pay, except that there were, I think, 13 percent of the 
Social Security recipients paid more because we began to tax Social 
Security income more like regular pension income.
    But it was the Republicans who believed that tax increases by 
definition were recessionary and that--so they unanimously opposed the 
plan.
    You asked me what convinced me. What convinced me finally was that I 
believe fundamentally, unless we got interest rates down and investment 
flowing, that we would never be able to see a decline in unemployment 
and growth in new businesses, particularly in this high-tech sector 
which depended on vast flows of venture capital, confidence capital, if 
you will, that it seemed to me was just out there bursting, waiting to 
happen.
    I think--and maybe it was my experience as a Governor that informed 
all this--but I really did believe there was this huge, vast, pent-up 
potential in the American economy that had been artificially repressed 
ever since the deficit spending recovery at the end of President 
Reagan's first term. Basically, what happened at the end of the first 
Reagan term is, interest rates weren't too high because we had such a 
terrible recession and so much inflation and such high interest rates at 
the end of President Carter's term, so when the interest rates came 
down, then inflation--naturally inflation around the world came down. 
Those huge deficits brought us back a little bit. But the long-term 
potential of the American economy, I was convinced, could never be 
unleashed until we got rid of the deficit.
    So finally, I just decided that if I didn't get the economy going, 
nothing else would matter in the end, and I believed that the pent-up 
potential of the American economy was so great, that if we did get the 
interest rates down and we did get investment up, everything else would 
fall into place. And I thought that I ought to listen to Bentsen and 
Rubin because they knew a lot more about it than I did.

Earned-Income Tax Credit

    Mr. Klein. But you didn't listen to Bentsen on the EITC. That was 
one place where you absolutely didn't bend at all.
    The President. No, but we had promised that, and I believed in it. I 
thought--and again, I'm confident that not only what I saw in the 
campaign but my experience as Governor of a State that was always in the 
bottom two or three in per capita income had an impact on this. But I 
just believe that we had to use the tax system to dignify the work of 
low-wage workers and to make it possible for them to raise their 
children more successfully. I didn't think I could go out there and 
argue for a tough welfare reform bill and a tough deficit reduction 
package, and say I was going to have to slow down my increases in 
education spending and some other--social spending, housing, and all 
these other things that I would otherwise like to do--

[[Page 2387]]

if we weren't prepared to give lower income working people more income.
    I also thought it was good economics, because they were going to 
spend it. They needed to spend it.

Congress and Taxes

    Mr. Klein. Did you ever think that--was there any way that you could 
have gotten Republicans to go along with this?
    The President. I don't know, and I'll tell you why. In retrospect, 
maybe there were some things I could have done.
    Mr. Klein. What if you had invited Dole and Michel to that dinner in 
Little Rock?
    The President. Yes, or invited them down even on their own it might 
have worked. The real problem I see with it--in retrospect, the reason I 
say I don't know--first of all I wish I had done that, because later on 
I started bending over backwards. I had Gingrich in and Armey in, and I 
met with them exhaustively, and I tried. Often it didn't work, but we 
did get some things done from time to time.
    I think they had made a decision to oppose all tax increases because 
of the Gingrich position vis-a-vis President Bush. And he was pretty 
well in the ideological saddle, the political saddle in the House then. 
And I think because Senator Dole obviously hoped to run for President in 
'96, I think the Republicans in the Senate were going to be reluctant to 
break ranks once it was obvious that the House Republicans were going to 
oppose any kind of deficit reduction package that had any tax increases 
in it.
    And I didn't believe--if we hadn't gone for some upper income tax 
increases, then number one, we would have had to adopt cuts that the 
Democratic majority in the House would not have supported, even under 
me. And number two, we could not have kept our commitments on the earned 
income tax credits on education, where we did have a substantial 
increase, or on the empowerment zones or a lot of the other things I did 
that I believed in.

Washington Politics

    Mr. Klein. Did the atmosphere surprise you, the vitriol, the 
difficulty?
    The President. Yes, it did, I think, basically, but I now know 
things I didn't know then.
    Mr. Klein. What do you know now?
    The President. Well, they really believed--first, I know now 
something I didn't know, which is that some of the people on the 
Republican side--actually, I did know this, but I didn't believe it when 
I got a call from the White House early--before I decided to run in the 
summer of 1990--from a guy I knew who worked there who was saying, ``You 
know, you shouldn't run.'' Bush was at like 80 percent then or 
something. I couldn't believe--so I had this serious talk with him about 
how President Bush had used his popularity to try to deal with the 
economy.
    And after about 5 minutes, the guy said, ``Now, let's just cut the 
crap. We've looked at this crowd, and we can beat them all. All the guys 
in Congress have votes. We can beat them all. And we think Governor 
Cuomo's too liberal, but you're different. You might beat us, and so if 
you run, we're going to take you out early.'' Then I realized that they 
somehow thought it was serious.
    Then, after I got up here and started dealing with them, what I 
realized is that they had been in for 12 years, but they basically had 
been in since President Nixon won, except for the Carter interregnum, 
which they thought was purely a function of Watergate, and therefore 
they saw it as an historical accident that they had quickly corrected, 
and that's the way they saw it. I actually think Jimmy Carter and, 
before him, Bobby Kennedy were the precursors of the sort of New 
Democrat, Third Way stuff I've tried to do here. And I think, therefore, 
it's not fair, but that--exactly to diminish--but that's the way they 
viewed it, anyway.
    So I think they believed that there would never be another 
Democratic President. I really think a lot of them thought they could 
hold the White House forever, until a third party came along to 
basically offer a competing vision. And so, they just never saw me as a 
legitimate person. They just thought I was, in President Bush's words, 
``the Governor of a small Southern State.'' And as I often crack on the 
trail, I was so naive that

[[Page 2388]]

I actually thought that was a compliment. [Laughter] And I still do.
    So anyway, it did surprise me. I mean, I knew it was there, and I'd 
seen the Democrats do things--in my view, I guess I've got a warped 
view, but I never thought it was nearly as bad as what they did to me. 
But from time to time, the Democrats did things I didn't approve of. I 
didn't like the nature of their arguments against John Tower or the fact 
that somebody checked out the movies that Bob Bork--and I knew there was 
some of this up here.
    But I never thought I would see it in the kind of systematic way 
that I saw it unfold. But when I got to know Newt Gingrich and actually 
had a lot of candid conversations with him, I realized that that's just 
the way they thought politics worked.
    Mr. Klein. War without blood.
    The President. Yes, that's what they thought.
    Mr. Klein. That's what Newt called it.
    The President. I had a fascinating conversation with one Republican 
Senator in the middle of the D'Amato hearings when they were impugning 
Hillary. And I asked this guy who was pretty candid, I said, ``Do you 
really think that my wife or I did anything wrong in this Whitewater 
thing? Not illegal, even wrong?'' And he just started laughing. He said, 
``Oh, you've got to be kidding.'' He said, ``Any fool who has read the 
record would know you didn't do anything wrong.'' He said, ``How could 
you do anything wrong? You didn't borrow any money from the S&L which 
failed. It was a very small S&L failure. And you lost $40,000 or 
whatever you lost on the real estate deal.'' He said, ``Of course, you 
didn't do anything wrong.'' He said, ``That's not the point of this. The 
point of this is to make people think you did something wrong.''
    But so, it was funny. Yes, I was surprised by their vitriol, and 
yes, I was surprised, and I must say I was surprised that they 
believed--and they had an electoral--and they turned out to be right, 
but I made a mistake or two that helped them. They believed that they 
could win the Congress if they could just say no to everything, and they 
did. And I think it rested on basically three things. One is, we did the 
economy, the budget plan, which we had to do. And we had to expect some 
loss of midterm seats. And some of those seats we had for a long, long 
time were naturally Republican seats, anyway. So that was the first 
thing.
    The second thing is--but the people hadn't felt the benefits of it. 
Then the second thing we did that cost us some seats, but I am 
absolutely convinced is the right thing to do, was the Brady bill and 
the crime bill, which had the assault weapons ban. But there again, we 
got that done in 1994. Had it happened in '93, I think it would not have 
hurt us so bad. But in '94 there wasn't enough time, between the time 
that bill passed and the time people voted to convince the world--people 
that voted, against our Congressmen on the Brady bill and the assault 
weapons ban that there wasn't anything going to happen to them and their 
hunting and sport shooting and all that.
    By '96, the issue was working for us, because I could go to places 
like New Hampshire and say, ``I want everybody that missed a day in the 
deer woods to vote against me. But if you didn't, they didn't tell you 
the truth, and you ought to get even.'' That's what I said. And our 
winning margin in New Hampshire went from one point to 13 points or 
something. But in '94 my party's Members bore the brunt of that.
    Then the third problem we had, and this is where I think you were 
right, is I was trying so hard to keep all of my campaign commitments 
and the way I made them--I should have done welfare reform before health 
care. You were right about that.
    Mr. Klein. I don't know that I took that position. In fact----
    The President. I thought you were saying that.
    Mr. Klein. Well, I might have said it, but----
    The President. And it was right.

Welfare Reform

    Mr. Klein. I'll tell you where I was wrong, is that when it came to 
doing welfare reform, I chickened out, and I wrote a column the week you 
signed it telling you not to sign it. I talked to Elwood last week, and 
he's turned around on it as well. We were both wrong.

[[Page 2389]]

    The President. But the reason is, I think, if you go back, there's 
one thing that nobody in the press has picked up--and we ought to talk 
about this later--is why I vetoed the first two bills and signed the 
third one. We'll come back to that.
    But if I hadn't done welfare reform first, that would have given the 
Democrats a chance to appeal to more conservative and moderate voters. 
And the system--one thing I've learned is, since I've been there, is 
actually the system is capable of great change, but it can only digest 
so much at once. So in '93, they did a big economic plan and NAFTA, and 
in '94 they did this big crime bill. And they might have been able to do 
welfare reform, but there's no way the system could digest the health 
care thing. Either that, or if we were going to do health care first, 
then the mistake I made was saying I would veto anything short of 100 
percent coverage, because----
    Mr. Klein. Why did you say that?
    The President. ----it was one of those decisions we made practicing 
for the State of the Union, and I just shouldn't have done it. It was a 
mistake. I was trying to bring clarity to the debate, and I was afraid 
that they would try to run something bogus by.

Health Care Reform

    Mr. Klein. You're saying that you think there is no way you could 
have gotten a health insurance deal in '94?
    The President. No.
    Mr. Klein. You don't think so?
    The President. No.
    Mr. Klein. What about----
    The President. Let me tell you what happened.
    Mr. Klein. What if you had gone and just dumped your bill and gone 
over to Chafee's press conference and said, ``I'm with him''?
    The President. Well, maybe, but----
    Mr. Klein. He had universality. He had a tax increase to pay for it, 
and he had Bob Dole.
    The President. Well, he sort of did, but let me tell you what 
happened. What happened was, I offered and Hillary offered not to submit 
a bill. We offered to do two different things. We offered to submit sort 
of a generic bill and let Congress fill in the blanks, and Rostenkowski 
asked us--this is a little more detail, but--then we offered not to 
submit our own bill at all but instead to submit a joint bill with Dole, 
which I thought was good politics for him, because then he couldn't lose 
anything----
    Mr. Klein. What was the timeframe for this? When did you make that--
--
    The President. Well, before we introduced a bill. I can't remember 
exactly when.
    Mr. Klein. So this is while the task force was----
    The President. Yes, before we introduced the bill. And Dole said to 
me--I'll never forget this, because we were at a leadership meeting in 
the Cabinet Room, and he said, ``No.'' He said, ``That's not the way we 
should do it.'' He said, ``You introduce a bill. We'll introduce a bill. 
Then we'll get together. We'll put them together. We'll compromise and 
pass them.''
    Then after that, Dole got the memo from Bill Kristol, I think, which 
said--which basically took the Gingrich line. ``The way you guys are 
going to win in the Congress and weaken them is to have nothing happen. 
If anything happens, the Democrats will get credit for it, so you guys 
have to make sure nothing happens.'' After that, I don't think we really 
had a chance, because Mitchell killed himself to try to figure out a way 
to get to Chafee, do something and--maybe if I had gone to Chafee's 
press conference, maybe that would have worked.
    Mr. Klein. Or if the First Lady had.
    The President. You know, I hadn't thought of that, but all I can 
tell you is that I really believed, because Dole--with that single 
exception, all my other dealings with Dole, whatever he said was the way 
we did it. In other words, not the way we did it, but I mean, if I made 
a deal with him, it always was honest.
    Mr. Klein. He was as good as his word.
    The President. Exactly. And in this case, I just think, you know, he 
saw a chance to win the majority, saw a chance to get elected President. 
Bill Kristol told them don't do it; they didn't do it. And that's what I 
think happened.
    Mr. Klein. But this is the thing that people on the left point to, 
that would have been your big achievement, the big, New Deal

[[Page 2390]]

kind of achievement. And when you look back on it, do you regret the 
substance of what you did? Do you think that going with an employer 
mandate was the wrong thing? And also, do you regret the detail in which 
you did it, the fact that you did the 1,300 pages and----
    The President. I think politically it was bad politics. On the 
substance, I think basically it was a privately financed plan that 
relied on managed care but had a Patients' Bill of Rights in it. And I 
think the two things that made it unpalatable to Republicans were the 
employer mandate and the Patients' Bill of Rights. I think the thing 
that made it unpalatable to Democrats, a few of them, was the employer 
mandate. But if you're not going to have an employer mandate, then you 
have to have a subsidy where people buy into either Medicare or 
Medicaid. And probably, that would have been simpler.
    Mr. Klein. That's what you're going to have eventually.
    The President. That's what you're going to have eventually. And if I 
could do it now, that's what I would offer. But the problem is, I 
couldn't do it in '94, with the deficits the way they were, without a 
tax increase. And I didn't feel that I could ask the Congress to vote 
for another tax increase, even if it was a dedicated thing, after we had 
just had that big one in '93.
    Mr. Klein. Plus the reporting was way out of whack at that point, 
because you weren't getting credit for the savings, the managed care----
    The President. We were getting killed by the scoring. The scoring 
was all wrong, and we knew it was wrong, but I was stuck with the 
scoring. So if you look at it, the position I was in is, I was stuck 
with the scoring. I didn't want to ask for another tax increase; I 
didn't think that was right. So I had to try stay with the private 
insurance system.
    And I would have thought that the insurers would actually have liked 
that, because they were going to get a lot more customers. But 
basically, they didn't like it because we couldn't just let them have 
all those mandated customers and have no Patients' Bill of Rights and no 
restrictions on managed care, so they then developed this whole argument 
that it's a Rube Goldberg machine, it's a Government takeover of health 
care, and all this stuff. And that sort of stuck because they had all 
that money to put behind it.
    But the truth is, in defense of what we offered, if you go back and 
look at all the early soundings from all the experts when we first laid 
it out there, everybody said, ``This is a moderate plan. This is not too 
far left. They've tried to keep their private insurance system. They've 
certainly left the private health care delivery system intact.'' Because 
nobody said it was some big Government takeover until all the people 
spent whatever they spent, $100 million, $200 million, whatever they 
spent in there later, to try to perform reverse plastic surgery on it.
    But I think that in the context you ask the questions, to go back, I 
think that the combined impact of the economic plan, with people not 
fully feeling the benefits in '94; the gun deal, where people had their 
fears fully allayed; and the health care thing, where the people that 
wanted it didn't get it and the people that didn't like it knew what 
they didn't like about it. That tended to depress the Democratic voters. 
And the three things together produced--plus the fact that the 
Republicans had this contract on America, and people didn't really know 
what it was; they just knew they had a plan--gave them the big win they 
got.
    Mr. Klein. Just to stay with health insurance for a minute, do you 
regret structurally the way you went about doing it? If you had to do it 
all over again, would you give it to the First Lady? Was that a mistake?
    The President. I don't think it was a mistake to give it to her. I 
think the mistake I made was, I either should have insisted on having 
her say, ``Okay, here's all of our work. Look at it. Here are the basic 
principles we want. You guys draft the bill,'' or I would have insisted 
that we had a joint bill. If we were going to draft the bill, I would 
have made the Republicans draft it with me. That was the mistake I made.
    Neither one of those things was her doing. She gets a total bum rap 
on this. The plan she came up with, which was--she was told, ``We ain't 
going to have a tax increase, right, and therefore it's not going to be 
a total Government program, but you have to try to get 100 percent 
coverage,'' so there was no other

[[Page 2391]]

way to do it except with an employer mandate. And she was also told that 
``managed care is going to happen, and we favor it,'' which she did 
favor it, ``but we've got to have some protections in there for 
people.''
    I don't know how many doctors I've had come up to me since then, 
tell me that we were right and that basically it was a good plan. So in 
a way, I think she really got a bum rap on that deal, because she was 
operating within constraints that were, we now know, impossible.
    What I should have done is to let her do all the work, publish all 
the findings, say, ``Here are our principles. You guys write the bill.'' 
Or I should have said, ``If you want me to do a bill, I will only do it 
if we have a bipartisan agreement on the bill.'' That would have 
produced something less than 100 percent of coverage, but at least it 
would have produced something that would have passed and gotten us up to 
90 or maybe above 90 percent. That was the mistake I made.
    But it was my mistake, not hers. She, I think, has gotten a totally 
bum rap on this deal. All she did was what she was asked to do.
    Mr. Klein. I asked Ira about it, and he pointed to his E-commerce 
protocols, and he said, ``What I did was, I decided to do everything the 
exact opposite of what we did with health insurance, and it worked.''
    The President. But the interesting thing there was, it worked 
because number one, we didn't have to pass a big bill because of the 
Telecommunications Act, which was a great success--which we ought to 
talk about later--was a big part of the economic program, was operating 
on a parallel track. And all we had to do there was to basically invite 
them to help us make Government policy that would maximize economic 
growth. It was a much simpler problem.
    There was absolutely no way to get to 100 percent of coverage, to 
have universal health coverage, unless you had an employer mandate or 
the Government filled in the difference. If we were doing it today, we 
could do it. And the next administration could do it, because now we 
have the money to do it. But then, we didn't.
    Mr. Klein. You're going to come down closer to get what you want in 
reconciliation if you move the CHIPS program to cover the parents, and 
only----
    The President. The CHIPS program, the parents, and you let people 
between 55 and 65 buy into Medicare. Then the only people that won't be 
able to get health insurance are young, single people who think they'll 
live forever and just don't want to do it, or very wealthy people who 
just would rather go ahead and just pay their doctor.
    Mr. Klein. The reason why I was always for universal was because I 
thought those people had a moral responsibility to pay in to help the 
risk pools.
    The President. I don't know if I can get this CHIPS thing, but if I 
can, it will make a huge difference.

White House Operations/Gays in the Military

    Mr. Klein. I don't want to stick on the bad stuff in the first term 
too long, but--things--in retrospect, things seemed pretty much a mess 
in the White House for the first couple of years. And there were times--
several people have said to me that you came to them at various times 
and said, ``Look, I'm in the wrong position. I'm to the left of where I 
should be,'' or ``Things just don't feel right,'' or ``Things are out of 
control.'' And I guess two or three questions you could answer in a 
bunch: How did that happen? I mean, how do you come out of the box doing 
gays in the military, for example, which I assume--well, you believe in 
the policy--it probably wasn't the best thing to come out of the box 
with. Why did you surround yourself with--why were there so few----

[At this point, a portion of the interview was missing from the 
transcript by the Office of the Press Secretary.]

    Mr. Klein. At what point did you get a White House that you were 
really happy with the way it was working?
    The President. Well, first of all, I think that in retrospect, I 
think if you compare the functioning of our White House, for example, 
with the Reagan White House in the first term, I think ours looks pretty 
good. And I

[[Page 2392]]

think that the problems we had were fundamentally--most of the mistakes 
we made were political, not substantive.
    I mean, Bruce Reed was there; Sperling was there; McLarty was there; 
and Rubin was there. So I don't think--I don't think it's fair to say--
and Laura Tyson agreed with us. I don't think we had a bad--I think we 
did have people who were, philosophically and substantively and on 
policy terms, consistent with our New Democrat philosophy. And I think 
that budget, from the empowerment zones to the charter schools we got in 
the beginning, to the Goals 2000 program, to what we did on the student 
loan program--which was terrific; it saved $8 billion in student loan 
costs for kids--to the overall economic plan, I think it was consistent.
    I think the economic plan was consistent--I mean, the crime bill was 
completely New Democrat. I think family leave and the Brady bill were. A 
lot of the most important things that were done that made possible all 
the stuff we've done in the last 4 years----
    Mr. Klein. You left out NAFTA and reinventing Government.
    The President. Yes, we had NAFTA, and we did RIGO, and we did the 
WTO--all that in the first 2 years.
    Mr. Klein. But even given all that----
    The President. But what was wrong was that the political image was 
different from the reality. The substantive reality, I think, was quite 
good. I've heard Bob Rubin defend the White House repeatedly and talk 
about how the things that worked well later, especially the sense of 
camaraderie and teamwork and joint decisionmaking, were all put in place 
in that first year and a half.
    But let's just go through the problems, and you'll see. Part of it 
was, I think, none of us were sensitive to the way--sufficiently 
sensitive to the way Washington works and to the way little things would 
look big to other people.
    Now, let's just start with the gays in the military. How did that 
happen? It is not true that we brought it up first.
    Mr. Klein. Andrea Mitchell brought it up in a press conference on 
November 11th.
    The President. Yes, but why? What happened? Dole introduced 
legislation--Dole deserves credit for this. The Republicans should give 
Dole credit for this. They always say he was too moderate and all that. 
They should give Dole credit for this. And I give him credit for it. 
I've thought a lot of times about how I could have outmaneuvered him on 
it. But I had two things going--and the Joint Chiefs obviously agreed 
with him, which helped.
    But what put this on the front burner early? Not me; it wasn't my 
decision. Dole introduced a bill in Congress which was going to fly 
through there, because Nunn agreed with him, to keep the present policy. 
That was like the first thing he did. And then the Joint Chiefs demanded 
a meeting with me. The President can't refuse to meet with the Joint 
Chiefs. So it was those two things that put this thing front and center. 
I did not want this----
    Mr. Klein. The bill came in after you said--after Andrea Mitchell 
asked the question and you responded the way you did. I always thought 
that was because she needed a vacation and hadn't taken it.
    The President. No, no, it was because--but he was going to put that 
in anyway. We knew what he was doing. So what happened was, between the 
Joint Chiefs and the Dole bill, we were forced to put it up. I was 
going--what I intended to do was to get all the stuff, my basic stuff 
organized, lead with that, and figure out how to handle the gays in the 
military. And they basically forced me to deal with it from the 
beginning.
    And then the thing that--then I got a lot of heat, obviously, from 
the gay community for what I did. But everybody ignores what 
precipitated ``don't ask, don't tell,'' which was a vote in the Senate, 
essentially on the Dole position, that passed 68-32, i.e. by a veto-
proof margin. There was no vote in the House.
    In retrospect, given the way Washington works, what I probably 
should have done is issued a clean Executive order, let them overturn 
it, and basically let them live with the consequences of it. And I might 
have actually gotten a better result in the end, more like the one I 
wanted.
    But when General Powell came to see me about the ``don't ask, don't 
tell'' policy, the commitments that were made were very different from 
the way that it worked out in

[[Page 2393]]

practice later on. And so there was no question in my mind, given the 
way they laid out what their policy was going to be, that gay service 
people would be better off under the new policy than they were under the 
old one. It didn't work out that way, but the commitments that I got and 
the descriptions that I gave when I announced it at the War College, 
there's no question that if that had been followed through, the gays in 
the military would have been better off than they were under the old 
policy.
    And the thing that I didn't understand about the way things play out 
in public, because I really was inexperienced in the way Washington 
worked when I got there, is that sometimes you just need clarity. And 
even if you lose, it's better to lose with clarity than ambiguity.
    And what had not sunk in on, I think, even the press writing about 
this was that once the Senate voted 68-32, the jig was up. It was over, 
because everybody knew there were more than 300 votes in the House 
against the policy. So we had a veto-proof majority in both Houses in 
favor of legislating the present policy, unless I could find some way to 
go forward. So that's what I tried to do. But the reason it came up 
first was essentially because the Joint Chiefs and Dole were 
determined----
    Mr. Klein. So it wasn't the Andrea Mitchell question on November 
11th?
    The President. No.
    Mr. Klein. It was up----
    The President. Because I had lots of options there. I mean, Harry 
Truman basically, if you go back and look at what he did with 
integration of the military, he basically signed an order that said: 
Integrate; come back within 3 years and tell me how you did it.
    Mr. Klein. You could have signed an Executive order.
    The President. I could have done that. And like I said, in 
retrospect, we would have had greater clarity. And since there had been 
so many problems with implementing the policy, I'm not sure that for the 
past 6 years it would have been better. Now I think Secretary Cohen has 
really taken hold of this thing, and there have been some changes in the 
last 6 months that I think really will make the future better than the 
previous policy was.
    Mr. Klein. But to go back to the original question, I have a strong 
sense that during that first year, year and a half, you weren't 
satisfied with the way the White House was working.
    The President. No, because I thought we were often--first of all, we 
had to do some stuff that was tough, that was going to get us out of 
position. Our foreign policy team, I think, was working very well, and--
except for it took us too long to build an international consensus in 
Bosnia. But we eventually did it and did the right thing there. We were 
doing well in the Middle East. We took a big, bold step away from the 
traditional American position to get involved in the Irish peace 
process. And on balance, I was pleased with that.
    And actually, a lot of people have forgotten this, but when I came 
back from Jordan, from the signing of the peace agreement in the Wadi 
Araba in Jordan in late '94, right before the election, we were still in 
reasonably good shape, because my numbers went back up and that helped 
the Democrats.
    But I still believe that the underlying problems were the reasons 
for the election results. But the political problems of gays in the 
military hurt. I think that we had a lot of--I was more frustrated by 
operational things, like leaks on Supreme Court appointments that 
weren't even accurate, and I thought that the White House was not 
operating politically in a way that I thought was effective.
    I thought, policywise, we weren't out of position on anything except 
the retrospective on health care. And I've already said what I thought 
the political mistake was there, about how I should have handled it, 
given the fact----
    Mr. Klein. If you had to do it over again, you would have done 
welfare reform in '94 and the crime bill?
    The President. If I had to do it over again, I would have tried to 
do the welfare reform and the crime bill in '94, together, and started a 
bipartisan process on health care. I would have had Hillary up and 
meeting, issue the report with basic principles--that whole 600-page--
however long it was, the stuff we

[[Page 2394]]

did, I would have given it all to the Congress and said, ``Either you 
write a bill, or we write a bill together.''

Independent Counsel's Investigation

    Mr. Klein. Let me give you another, I think a tough ``if you had to 
do it all over again.'' When I look back on this period, you were 
rolling at the end of '93. You did NAFTA. You gave the speech in 
Memphis. I mean, even I was writing positive stuff about you at that 
point. And then came the wave of stupid scandal stories, the Troopergate 
story, the Whitewater stuff. That December, the Washington Post asked 
for all the documents. And there was a meeting that you had, maybe the 
only time in recorded history that George and David Gergen agreed and 
said you should turn over all the date, everything. And you didn't do 
it. Do you regret that? Do you think that that changed things?
    The President. I don't believe, given the subsequent coverage of the 
Whitewater thing, it would have made any difference. What I regret is 
asking for the special counsel, because under the law that existed 
before and the law that existed after, under neither law could a special 
counsel be called. They had one----
    Mr. Klein. Why did you do it? I was there the night you did it. You 
were in Ukraine, Kiev.
    The President. Yes. I did it because I was exhausted, because I just 
buried my mother, and I had poor judgment. And I had people in the White 
House who couldn't stand the heat of the bad stories, and they suggested 
that I do it and that I'd have to do it. And I knew that there was 
nothing there. I knew it was just one guy lying. And I had Bernie 
Nussbaum and Bruce and a few other people screaming at me not to do it. 
They said, ``You don't understand.''
    I knew that Janet Reno would appoint a Republican, even though all 
other Presidents had been investigated by people who had basically 
supported them. Lawrence Walsh supported Reagan; Sirica--no, what's his 
name?
    Mr. Klein. Sirica.
    The President. No, Sirica was the judge. Jaworski supported Nixon. I 
knew Reno wouldn't do that. I knew Reno would appoint a Republican, but 
I knew that there was nothing there. I knew she'd appoint an honest, 
professional prosecutor. So I just did it, but it was wrong, because the 
decision to appoint a special counsel is a decision to bankrupt anybody 
who's not rich. I mean, by definition, there's a penalty associated with 
it. But if Fiske had been allowed to do his job, this whole thing would 
have been over in '95 or '96. And of course, that's why he was replaced, 
because he was going to do his job.
    Mr. Klein. Just staying on this for a minute----
    The President. But do I think so? No, because I think--I mean, I 
don't want to get into this. I shouldn't talk about this much until I'm 
out of office. But I believe that the desire, the almost hysterical 
desire to have something to investigate was so great that it wouldn't 
have made any difference, because, look, what did this thing hang on? 
There was nothing in those private papers that we--we gave it all to the 
Justice Department. There was nothing in there that did anything other 
than support what the report said, which was that we lost money on a 
real estate investment. And if you noticed, when Starr got ahold of 
this, he immediately abandoned that and just went on to other stuff. 
There was never anything to it.
    And I do not believe--I have no reason to believe, given the 
coverage of the events of Whitewater, that it would have made any 
difference. I think they would have found some way to say, ``Oh, there 
are questions here; let's have a special counsel.'' But do I wish I had 
done it? I mean, I don't know.

Criticism of the President

    Mr. Klein. Last week you talked about the clanging tea kettle, and 
you know I've written this continuum--I've wrote that this era is going 
to be remembered more for the severity--for the ferocity of its 
prosecutions than for the severity of the crimes. And there's never been 
anything proven. And yet, the hatred and the vitriol has been 
relentless. What do you think it is about you? Do you think it's you? Do 
you think it's us, our generation?
    And what about the Steve Skowronek theory, the Yale professor who 
talked about Third Way Presidents like you, like Wilson, substantively 
like Nixon, people who take the

[[Page 2395]]

best of the opposition's agenda, sand off the rough edges, implement it, 
and are therefore distrusted by their own party and hated by the 
opposition?
    The President. Well, I think that that--I read his book, and it's a 
very good book. But I think in this case that's not accurate, for the 
following reasons. Number one, if you go back to '93 and '94, the 
Democrats in Congress supported me more strongly than they had 
supported--a higher percentage of Democrats voted for my programs than 
voted for Kennedy, Johnson, or Carter. It was that the Republican 
opposition was more unanimous.
    Number two, the Republicans never owned crime and welfare. They 
owned them rhetorically, but they didn't do much about it. And at least 
in the tradition that I came out of as a Governor, we thought we were 
supposed to act on crime and welfare. Nobody--when you check into the 
morgue, they don't ask for your party registration. And I never knew 
that anybody had a vested interest in poor people being out of work.
    And so I just never accepted that, and I found that there were a lot 
of Democrats in the Congress that were eager to deal with those issues. 
And if you look at it, we had--I don't know--more than two-thirds of the 
Democrats in the House and more than 75 percent of the Democrats in the 
Senate voted for welfare reform. And we had a higher percentage of 
Democrats than Republicans in the Senate voting for it and slightly 
higher percentage of Republicans than Democrats voting for it in the 
House but not huge.
    So I think that maybe transformational figures generally inspire 
that, because most times people like to deal with folks they can put in 
a box. Maybe it's just--maybe it's something about me that made them 
mad. You know my favorite joke about the guy that's walking along the 
edge of Grand Canyon and falls off--so this guy is hurtling down 
hundreds of feet to certain death. And he looks out, and he grabs this 
twig, and it breaks his fall. He heaves a sigh of relief. Then all of a 
sudden he sees the roots coming loose. He looks up in the sky and says, 
``God, why me? I'm a good person. I've taken care of my family. I've 
paid my taxes. I've worked all my life. Why me?'' And this thunderous 
voice says, ``Son, there's just something about you I don't like.'' 
[Laughter]
    I don't know. I don't think----
    Mr. Klein. The folks like you. They never cared about this stuff.
    The President. But I believe the Republicans thought--I told you, I 
think that they thought----
    Mr. Klein. It wasn't just them. It was us, too.
    The President. Yes. The press, I think--I wasn't part of the 
Washington establishment, and I think that the press didn't know what to 
make of me. I think this travel office deal, it was largely a press 
deal. I mean, I didn't know that they thought they owned the travel 
office. It was a weird deal. And of course, all I ever heard was one guy 
in the press who happened to be the head of the White House 
Correspondents at the time said, ``I wish you'd have somebody look into 
this because the costs are going up and it's not working well.'' I 
didn't realize that everybody else didn't care what happened. It was a 
strange thing.
    But I think that--all I can tell you is that the same guy that told 
me--the same Senator that told me that it was about making people think 
I'd done something wrong in Whitewater also said that the Republicans 
had learned a lot from my Presidency. He said, before, that they thought 
there was a liberal press. And he said, ``Now we have a different view. 
We think that they are liberal and that they vote like you, but they 
think like us, and that's more important.'' And I said, ``What do you 
mean?'' And he said, ``Well, we just don't believe in Government very 
much, but we love power.'' And he says, ``You know, the press wants to 
be powerful, and we both get it the same way, by hurting you.'' There 
could be something to that.
    But I'm sure--maybe there were times when I didn't handle it all 
that well in the early going. But all I can tell you is, if you look 
back over it, the Whitewater thing was a total fraud. Now, I've got a 
friend named Brandy Ayres, who is the editor of a little newspaper in 
Addison, Alabama. Do you know who he is?
    Mr. Klein. I've met him, yes.

[[Page 2396]]

    The President. He wrote an editorial that said, ``This is what 
always happens when Republicans get in the majority. They did it when 
they got in the majority after World War II. They tried to convince us 
Harry Truman and Dean Acheson were Communists. And then the second time, 
they gave us McCarthy. And now, they gave us this.''
    I don't know. I think part of it is how you view power. But for 
whatever reason, there is something about me that they didn't like very 
much. But it all worked out all right. Like I said, I'm sure that my not 
being familiar with Washington mores may have had something to do with 
the way I didn't handle the press right. Maybe I didn't----
    Mr. Klein. Yes, you know--I mean, I've said this in print, so I can 
say it to your face. You're the most talented politician I've ever come 
across, and you're not a slow study. That's the other thing we know 
about you.
    The President. But I think in the beginning, for the first 2 years, 
I thought I was pushing a lot of rocks up the hill. I was obsessed.
    Thomas Patterson, who has written books about the Presidency and the 
media and all that, he said in '95 that I'd already kept a higher 
percentage of my campaign promises than the previous five Presidents, 
which I felt really good about. We had just lost the Congress. I needed 
something to feel good about.
    But I do believe in '95 I was--and '93 and '94, I was just fixated 
on trying to get as much done as quickly as I could, and also on trying 
to learn the job, get the White House functioning, all that kind of 
stuff. And I think that I did not spend enough time probably at least 
working with the media, letting them ask me questions, at least trying 
to get the whole--letting them get something in perspective. And I think 
maybe I was just the last gasp of 25 years of scandal mania. We may be 
swinging the other way on the pendulum now.

Oklahoma City

    Mr. Klein. I think, after '98, maybe we've learned. I think we're 
doing a little bit better this year. You might see that in a different 
way.
    Let's talk about '95 for a second. To my mind, the period of this 
Presidency that is most touching to me, I think, are the weeks after--
well, the 2 days, April 18, 1995----
    The President. Oklahoma City?
    Mr. Klein. No, the press conference the night before Oklahoma City 
when you said the President is still relevant here. I thought, ``Oh, my 
God, that must be the rock bottom for him.''
    The President. Well, actually, it wasn't. I didn't have the same 
reaction to it than maybe--you know, we often don't perceive ourselves 
as others see us. But that question, I learned something from that, 
which is, if someone asks you a question that you want to answer 
directly, but there's a word in it that's dynamite, you should answer it 
without using the word, because actually, what I was doing in April of 
'95 in my own mind was prefiguring the fight which occurred at the end 
of '95 and the end of '96. That is, I honestly didn't feel pathetic or 
irrelevant or anything. I knew that in the end, if a veto-proof minority 
of my party would stay with me, after the terrible licking they'd taken 
in '94, if they would stay with me, I believed in the end we'd have our 
chance to make our case to the American people. In other words, I 
believed it would turn out the way it did turn out at the end of '95 and 
the beginning of '96.
    So actually, to me, it wasn't the worst point of the Presidency. 
When they asked me that question, a light went on in my head. I actually 
felt good about it. But because I used the word, it came out--people 
perceived it differently than I did. I didn't feel that about it.
    Mr. Klein. But then, a week later, you said--at Michigan State, you 
said, ``You can't love your country and despise its Government.'' And 
that's when a light went off in my mind: He's figured out how he's going 
to go up against these folks.
    The President. Yes, that's what I believed. I think the Oklahoma 
City thing was awful. It was awful. But I think it began a kind of 
reassessment, a kind of breaking of the ice. And I don't mean that--God 
knows----
    Mr. Klein. Someone told me that you said, you told them that you 
wouldn't use the word ``bureaucrat'' again in a speech after that.
    The President. Yes. I did. It affected even me. I realized that I 
had played on the

[[Page 2397]]

resentments people feel about Government. And I thought that when 
Government did something stupid or indefensible, they ought to be taken 
on. But I realized that even when you do that, you have to be careful 
what word you use. And I did say that. I said, ``How many times have I 
used the word bureaucrat, and there are people there.'' And I didn't 
mean to say that I or even Newt Gingrich was responsible for Timothy 
McVeigh. I don't want to get--that's what he did. Are the liberals 
responsible for Susan Smith, the one throwing her kid out the window? I 
didn't want to get into that. But Oklahoma City had a profound impact on 
me, too.
    I went down there, and I was sitting there with the relatives, and 
one of the people that was killed had been in my Inaugural, and I was 
talking to his kinfolk. And I said, you know--I just made up my mind I 
would try never again to discuss the Government, even people's 
frustrations with it, in a way that could be directed against categories 
of people. It really had a big impact on me, and I think it did on the 
country.
    Mr. Klein. Would it be fair to say that by the time you gave that 
speech at Michigan State, you were ready for battle?

Balancing the Budget

    The President. Yes. Yes.
    Mr. Klein. Now, this is a really interesting part of your Presidency 
to me. You had at that point a brilliant strategy in place to screw 
them. It was, smoke them out. You could have just sat there and said, 
``Well, what's your plan?'' You could have done to them what they did to 
you in '94. And yet, you insisted, ultimately--against, from what I can 
gather, your entire staff, including people like Bob Rubin--you insisted 
on coming out with your own budget, your own balanced budget, that June. 
Why did you do that? I mean you didn't have to politically, right?
    The President. No, probably not. In other words, I could have done 
to them what they did to me. And that was the argument, that we'd just 
say no to them like they just said no to us. But governing is important 
to me. And I thought that in the end we would all be judged by how we 
had performed and by whether we had performed. And this may sound naive, 
but I believed that in the end, we could change the politics of 
Washington.
    See, one of the reasons I ran for President is, I didn't just want 
to prove that I could play the game they'd all been playing with each 
other: ``I got an idea. You got an idea. Let's fight, and maybe we can 
both get our 15 seconds on the evening news.'' That's basically the 
operative mode. I didn't want to do that. I came here to do things. I 
wanted to be President to do things, to change the country, to be 
relevant. And I thought that the Democrats--I didn't think the 
Republicans would take us up on it initially, because Gingrich had 
basically made it clear that he wanted to basically be prime minister of 
the country and turn me into a ceremonial and foreign policy President. 
We'd have the French system, in effect.
    Mr. Klein. Not only that, he told me on the phone one night he was 
personally going to lead a Wesleyan revolution that year.
    The President. So that's basically what he wanted to do. But I just 
felt that the Democrats could not sacrifice--what I was trying to do was 
to build the Democrats as a party of fiscal responsibility. I wanted to 
prove that you could be socially progressive and fiscally responsible. 
And for us--and I went out there saying, ``Look, our credo is 
opportunity, responsibility, community.'' I just didn't see that I could 
stand there and say, ``What do you expect of me? I'm just the President. 
They're in the majority.'' That's just not my way. I believe that you 
have to do things if you can. And my own view of politics is that 
there's always plenty that the parties are honestly divided about at 
election time, no matter how much you get done.
    Furthermore, I really did believe that the Democrat Party, in the 
end, would be successful by developing what is now known as the Third 
Way, but which I really saw as basically an information age version of 
what we'd always been for.

Second Term Agenda

    Mr. Klein. What was your fantasy for a second term? If you'd had 
everything you wanted the day after you were reelected, what would it 
have been?
    The President. Well, the validation of the economic strategy has 
been a part of it. I

[[Page 2398]]

would have finished the job in health care and enacted my entire 
education budget. And the rest of it is still sort of pending. The Irish 
peace process worked out the way I'd hoped. I'm still hoping that we'll 
get more done in the Middle East. It's very difficult, but I'm hoping we 
will. And then, on the foreign policy front, it's going to pretty much 
work out the way I'd hoped it would, I think.
    Mr. Klein. When I look back at your speeches, if there were a couple 
of paragraphs where you best describe your political philosophy, the 
Third Way, they were in the 1998 State of the Union Address, and nobody 
paid any attention. And you know why?
    The President. Because I was standing--what I got credit for there 
was just getting up, standing up. [Laughter]
    Mr. Klein. What was the opportunity cost of that scandal? What did 
it cost you?
    The President. I don't know yet, because actually we did--in '98 we 
won seats in the House of Representatives, the first time a President's 
party has done that since----
    Mr. Klein. I mean, substantively.
    The President. Well, I don't know, because I don't know whether the 
Congress, the Republicans would have been more willing to work with me 
or not.

Social Security/Medicare Reform

    Mr. Klein. What about things like Social Security reform--could you 
have made a----
    The President. Maybe. What I wanted to do with Social Security--I am 
disappointed there. We still may get some Medicare restructural reform 
out of this. And in any case, Medicare is going to be okay for 30 years, 
which is the longest it's been okay for in forever and ever. And I think 
----
    Mr. Klein. Yes, but that's a problem, for God sakes. I mean, the 
generational transfer issue, I think, is something that you're really 
concerned about.
    The President. I am concerned about it. But----
    Mr. Klein. You can't keep a fee-for-service----
    The President. But, but, but both Medicare taxes and Social Security 
taxes, in fairness, since 1983 have been paying for everything else. So 
we've had a little of that in reverse.
    Mr. Klein. That's very good.
    The President. Everybody has forgotten that. We've been dumping all 
these Social Security and Medicare taxes into the general economy all 
this time. I personally believe, though, that--I regret we didn't get to 
do Social Security because I would have--what happened was, I think 
maybe we could have gotten it if we hadn't had that whole impeachment 
thing. But there was more resistance in both parties to do anything than 
I had imagined there was.
    They'll have to come to terms with this. It will have to be done. 
And I think you've either got to raise taxes, cut benefits, or increase 
the rate of return. What I proposed in '98 on Social Security, I think, 
was a very good beginning, and I really thought we'd get something. Was 
that '98 or '99?
    Mr. Klein. That was '98. And there was also the Breaux-Thomas, later 
Breaux-Frisk commission on Medicare. You could have, with your 
abilities, you could have gotten some kind of deal if you'd been able to 
at that point.
    The President. Maybe. But they----
    Mr. Klein. Breaux was your guy, right?
    The President. Well, I don't agree with what he wanted to do there, 
and he knows that. I mean, I thought--I agree with some of what they 
proposed, but some of what they proposed I think would not be good for 
Medicare. On policy grounds, he and I have had long discussions about 
it. I think there are a couple of things in that report that I just 
simply didn't agree with.

Safety Net

    Mr. Klein. In general, when you talk about an information age safety 
net, what would it be, and what would be the guiding principles? I don't 
think that you can have the kind of centralized, top-down sort of 
programs that Social Security and Medicare----
    The President. I think if you had--yes, but there's a great 
article--let me just say this. There's a great article in the New York 
Times Sunday Magazine the day before yesterday----
    Mr. Klein. The Sara Mosle article?

[[Page 2399]]

    The President. ----about voluntarism. And I don't believe--I think 
you have to have some sort of--if you believe there should be a safety 
net, there has to be some sort of safety net. Now, there's all kinds of 
options to get it done, and I think there should be more--you can have 
some more room for private initiative. But if you had a safety net that 
worked, you'd have something for the poor and the disabled, the people 
who through no fault of their own were in trouble. You would have 
genuinely world-class education for everybody who needed it, which is 
everybody. You would have access to health care at an affordable rate 
and decent housing, and you'd have to have a lifetime learning system.
    And then I think you'd have to have some more generous version of 
the new markets initiative I proposed, because there will always be 
unevenness in the growth of the market economy. That's part of its 
genius, because you have to have opportunity for new things to branch 
out. But in my view, this new markets thing has been underappreciated.
    Mr. Klein. I was out there a year ago watching Al From and Jesse 
Jackson cavort along beside you.
    The President. And it may be one of the great opportunities for 
bipartisan achievement in this session. It may be one of the great 
opportunities because Hastert is completely committed to it. He's been 
as good as his word on everything. And I think Lott knows it's the right 
thing to do. I've talked to them both a lot. We do have a good working 
relationship now, even though we have our differences. I think the 
Senate has been far too grudging on the judges, particularly since I 
appointed basically mainstream judges. But they want more ideologues, 
and they hope they can get them next year. And I hope they can't, and 
we'll see what happens.
    But anyway, I think a part of the safety net ought to be viewed as a 
willingness of the Government to make continuing extraordinary efforts, 
including big tax incentives, to keep the people in places that are left 
behind in the emerging global economy--keep giving them a chance to 
catch up.
    And I think this whole digital divide is a--I prefer to think of it 
as a digital bridge. I think if you think about what this means, 
basically, this information economy can collapse distances in a way that 
telephones and railroads and electrical--I mean, I think about it in 
terms of Arkansas. When they brought us REA and the Interstate Highway 
System and I put all these little airports up in remote towns and all 
that, it all helped to bring, like, small-scale manufacturing to places 
that had been left behind. But there was always the factor of distance.
    And then I got to a place like the Shiprock Navajo Reservation, 
where they make really beautiful jewelry, for example, where the 
unemployment rate is 58 percent and only 30 percent of the people have 
telephones. And you realize that if they really were part of an 
information age economy, there are ways in which they could do--I 
remember when I became President there were a lot of banks in New York 
shipping their data processing to Northern Ireland every day--every 
day--and then bringing it back. There are all kinds of opportunities 
that we never had before. And I think people ought to start thinking 
about that as a part of the safety net.

Information Technology

    Mr. Klein. You know, this raises an interesting point about you, 
personally. Shalala said to me that she thought that just as you were 
obsessed and voracious about social policy when you were Governor in the 
eighties--that's one of the things I first noticed about you, is that 
you knew everything. I mean, you knew about the schools up here in East 
Harlem, more than Cuomo did, in fact. But as you were to social policy 
in the eighties, you've been hungry in the same way for knowledge about 
science and technology in the nineties. And I talked to Harold Varmus 
about it, and other people have said the same thing. Is that true? And 
in that regard, talk to me a little bit about the policy that you 
pursued in high-tech and information age things that I don't understand 
that well, like telecommunications and----
    The President. Well, let's talk about that. The one thing in our 
mantra about our economic policy which we always repeat--fiscal 
responsibility, expanded trade, and investing

[[Page 2400]]

in people--those three things really were the sort of three stools of 
our economic policy. But one thing I think that tends to understate is 
the role that technology, particularly information technology, has 
played in this remarkable growth and the productivity growth and the 
long economic expansion.
    And I think our major contribution to that, apart from getting 
interest rates down so capital can flow to that sector, was in the 
Telecommunications Act of '96. And there were--our major contributions 
to that act--I might say, Al Gore deserves a lot of credit for because 
he was our front guy on it--were two. One is we insisted that the 
Telecom Act would be very much pro-competition, which required us to get 
into a very difficult political fight principally with the RBOC's, 
operating companies, many of whom I've had very good relationships with 
because they do great stuff. They've helped us on all of our digital 
divide stuff, a lot of the new market stuff.
    But I just thought that we had to bend over backwards to maximize 
the opportunity for people with ideas to start new companies and get in 
and compete. And we fought that through, and it delayed the passage of 
the Telecom Act, but eventually we got what we wanted. And as I 
remember, while there were more Democrats than Republicans for our 
position, there were actually people on both sides of both parties. But 
we very much wanted to have a pro-competition bias.
    The other night, interestingly enough, I was at dinner in New York 
with a friend of mine who was in the telecom business and then got in 
the venture capital business with telecom. He had a dinner for me, and I 
had dinner with like 40 people, all of whom headed companies that didn't 
exist in 1996. I went out to UUP, which is an Internet connection 
company, which had 40 or 80 employees, something like that, in 1993, 
when I became President, and they have 8,000 now. I mean, it's amazing.
    So that was good. And the second thing we did was to fight for the 
E-rate, which democratized the Internet and democratized the 
telecommunications revolution. We've got 95 percent of our schools have 
at least one Internet connection, and 90 percent of the poorest schools 
have an Internet connection.
    So I think that those are the two things that happened. And then I 
also continued to push relentlessly these last 8 years for greater 
investment in science and technology. It was interesting; I've had an 
interesting relationship with the Congress since the Republicans won the 
majority, because they look around for things that they can spend more 
money on than me.
    Mr. Klein. NIH.
    The President. Yes. And it's been very interesting. They knew they 
would always be--whatever defense number I proposed, they'd always be 
for more. And they liked to--I'm always for a balance between mass 
transit and highways, and they're always a little more on the highways 
side. But the big area was NIH. And Harold Varmus did a brilliant job; 
when the Republicans won the Congress, he brought all these freshmen 
Congressmen out, showed them the NIH, showed them what they were doing, 
explained the genome project to them. And I think John Porter was the 
head of the subcommittee in the House that had this. He's a good man. 
He's smart and he wanted to do the right thing. And so, anyway, I 
figured out after the first go-round that whatever I proposed, they'd 
propose more, which suited me fine because I basically don't think you 
can spend too much on those things.
    But the problem I had early on and the problem I still have is, 
notwithstanding how much money we have, the Republicans do not, in my 
view, spend enough money on non-NIH research. For example, they just 
took out all the money that I proposed for nanotechnology, this highly 
microscopic technology which could increase the power of computer 
generation by unfathomable amounts.
    Now, why is that a mistake? Because as--one night Hillary had--we 
had all these millennial evenings at the White House. And then we had 
one the other day on outer space and the deep oceans; we did it in the 
afternoon. But we had one on the human genome project, and we had Eric 
Lander from Harvard, who is a biological scientist, and we had Vint 
Cerf, who was one of the developers of the Internet. He actually sent 
the first E-mail ever sent, 18 years ago--or 19 years ago now--to his 
then profoundly deaf wife, who

[[Page 2401]]

now can hear because she's got a microdigital chip that's been planted 
deep in her ear. She heard, at 50--she said she's sure she's the only 
person who's ever heard James Taylor sing ``Fire And Rain'' at the age 
of 50 for the first time. She came and sort of stood up and was exhibit 
A.
    But the point they were making is that the biomedical advances that 
would flow out of the human genome project, which the Republican 
majority will support lavishly, depended upon the development of the 
computer technology, and that without the development of the computer 
technology, you could never parse something as small as the human genome 
and get into all these genes and understand all the permutations.
    For example, there was a fascinating article the other day about one 
of the implications of the human genome, saying that--talking about 
these two women who had a form of cancer, and that basically, if you 
look at the historical studies of all women in this category with this 
kind of cancer, diagnosed at this point in their illness, that you would 
say they had a 45-percent chance of survival. But now they can do 
genetic testing showing that they actually have very different 
conditions, and that one of them had a 20-percent chance of survival, 
the other had an 80-percent chance of survival.
    Now, the reason they can do that is because not only of the 
biological advances but the nonbiological advances that make it possible 
to measure the biological differences. And I could give you lots of 
other examples.
    And again, I owe a lot of this to Al Gore. He convinced me in 1993 
that climate change was real. And he wrote that book in '88, and they're 
still making fun of his book. And I remember as late as last year we had 
a House subcommittee that treated climate change like a conspiracy to 
destroy the economy of the United States. But now, you've got all the 
major oil companies admitting that it's real, that the climate really is 
warming at an unsustainable rate. And that's why we pushed the Kyoto 
Protocol and why I want to spend a lot more money, and also have tax 
incentives, for people to keep making advances in energy technologies 
and environmental conservation technologies.
    So my frustration about where we are now is that I'm really grateful 
that the Republican majority has embraced NIH, because it's been good 
and it's enabled me to present budgets under the old budget caps that I 
knew they would break, so I could get adequate funding for education, 
for example, and still know we're going to do a really good job on NIH. 
But I think we need a much broader commitment in the Congress to 
research in other areas of science and technology, going beyond the 
biological sciences.

[At this point, a portion of the interview was missing from the 
transcript.]

Events of 1998

    Mr. Klein. ----when it became clear to you--I mean, I know this is 
prompting you to sound braggart, but so be it. There must have come a 
time when you realized, ``Hey, our economic policy worked. This whole 
thing is taking off, and my larger sense of us moving from the 
industrial age to the information age is really true, and all of a 
sudden we have these surpluses.'' Was there a moment when the bolt of 
lightning hit and knocked you off the donkey on the way to the West 
Wing? Was there a day when you realized that----
    The President. I spent a lot of '98 trying to dodge bolts of 
lightning. [Laughter]
    Mr. Klein. Well, that's the irony of this, I think, is that that was 
probably going to be the moment that the press was going to realize that 
there had been a coherence to this whole project all along, and we 
managed to work our way out of that.
    The President. In '98, I spent a lot of '98----
    Mr. Klein. Is it fair to say '98 was the time that this----
    The President. Yes, yes. And I spent a lot of '98 sort of wrestling 
with three overwhelming feelings. One is, obviously there was a lot of 
pain involved because I had made a terrible personal mistake, which I 
did try to correct, which then a year later got outed on--or almost a 
year later--and had to live with. And it caused an enormous amount of 
pain to my family and my administration and to the country at large, and 
I felt awful about it. And I had to deal with the aftermath of it.

[[Page 2402]]

    And then, I had to deal with what the Republicans were trying to do 
with it. But I had a totally different take on it than most people. I 
really believed then and I believe now I was defending the Constitution. 
And while I was responsible for what I did, I was not responsible for 
what they did with what I did--that was their decision--and that I had 
to defend the Constitution.
    And so I felt that--I still believe historically two of the great 
achievements of my administration were facing down the Government 
shutdown in '95 and '96, and then facing this back, and that those two 
things together essentially ended the most overt and extreme 
manifestations of the Gingrich revolution.
    And then the third thing I felt was this ``Gosh, it is all working, 
and it's coming together, and all these things will be possible.'' And I 
still believe if we can get one or two things straight for the future, 
that a lot of the good stuff is still ahead.
    Mr. Klein. I'm not going to let you off that so easily. Were there 
days, were there moments that you remember where you saw, hey, this is 
happening?
    The President. Yes, I was really happy. I just was happy because I 
thought--to be fair, I don't think any of us thought in '93--if you 
asked me in '93, ``What level of confidence do you have this economic 
plan is going to work,'' I would say very, very high. And if you asked 
me, ``What do you mean by `working,' '' when I started in '93, I would 
say we'd probably have between 16 million and 18 million new jobs. I 
never would have guessed 22.5 million and maybe more.
    I would have said--I was fairly sure that we'd get rid of the 
deficit by the time I left office. I didn't know in '93 that we'd be 
paying off nearly $400 billion of the national debt when I left office 
and we'd be looking at taking America out of debt, which is a goal I 
hope will be ratified by this election. And I hope the American people 
will embrace that, because I think that's quite important.
    So in '98 I began to imagine just how far we could go, you know, and 
to think about that.

Race Relations

    Mr. Klein. There's another aspect to this that we haven't talked 
about that I think has really been central. In '93 would you have 
predicted that the state of race relations would have gotten to the 
point that it's gotten to now? I mean, I don't know whether you can 
sense--I sensed it out on the trail this year. Bob Dole went to Bob 
Jones in '96 and didn't pay any price at all, did he? This year you 
couldn't do it. And everywhere you go in this country, people of 
different races are having lunch together and holding hands.
    The President. I confess, you know, I like Senator Dole very much, 
but I would have made him pay a price if I had known he went to Bob 
Jones University. I just didn't know.
    Mr. Klein. You didn't know about the dating policy?
    The President. No, I didn't know he went to Bob Jones University. I 
didn't know about the dating policy, but I knew about Bob Jones because 
I'm a white Southerner. And I think the Bob Jones thing--I think 
Governor Bush going there mattered more maybe to white Southerners my 
age who supported civil rights than maybe to even other Americans, 
because it has a whole--because of the history there. It was a big deal 
to me. I just didn't know.
    But I do believe we have come a long way. And I think--I hope I made 
some contribution to that, because I think it's really important. I've 
tried to get Americans to understand that how we handle this--I still 
believe how we handle this is, in a way, the most important thing, 
because we're a great country and we're full of smart people and we 
nearly always get it right, unless we get in our own way. And it's just 
like me--nations are like people, individuals, in the sense that very 
often all their greatest wounds are self-inflicted. And this whole state 
of racism, it's a self-inflicted wound.
    Mr. Klein. This was where I was wrong on affirmative action, I 
think, in the end, when I kicked you around on that.
    The President. I never wanted it to last forever, and I think that 
we had to clean up some of the contracting policies and some of the 
other things. But we----
    Mr. Klein. Have those been done?

[[Page 2403]]

    The President. Well, we made some changes, and I hear a lot of 
complaining about it from people that have been affected by them. But I 
still believe that--and to be fair to my critics or skeptics, it's a lot 
easier to sell an affirmative action in good economic times than in 
tough economic times.
    I believe what launched the assault on affirmative action in the 
beginning was that, number one, it did seem to be that nobody was ever 
reexamining it, its premises. But secondly, the big start was in 
California because California was suffering so much from a recession in 
the late eighties and early nineties. And people felt that they were 
being disenfranchised, and they felt that the circumstances were 
squeezing in on them anyway, and they didn't want any other burdens that 
they lost just because they happened to be in the majority. So I think 
maybe the acid test of whether I was right or not won't come until 
there's another period of economic difficulty.

Welfare Reform

    Mr. Klein. People argue the same on welfare reform, as well, 
although----
    The President. But I think there's enough evidence in on that. I 
think if there are adversities coming out of welfare reform in the next 
economic downturn, or as far as there are now, it may be because--it's 
largely because of decisions States have made about how to spend or not 
to spend properly the big extra money they got because we grandfathered 
them in at the amount of money they were getting when welfare rolls were 
at their height in February of '94. I think that's when we did that. 
Maybe it was '96, but I think it was '94. I think we grandfathered 
them--anyway, whatever month it was, we grandfathered their cash flow in 
when welfare rolls were high, on the theory that we wanted them to spend 
this money on education, on transportation, on housing assistance, on 
training people to not just take jobs but to be able to keep jobs, or 
find new jobs if they lost them. And there are some stories coming in 
which are troubling, but which have more to do with decisions that were 
made at the State level.
    The thing that some of the people who criticized me on the left for 
welfare reform never understood, I don't think--they said, ``Oh, gosh, 
he's ending this national benefit.'' But that was a joke, because for 
more than 20 years, by 1996, States had been able to set their own rate. 
So you had the family support--monthly support for a family of three on 
welfare varied anywhere from a low of $187 a month to a high of $665 a 
month on the day I signed the welfare reform bill.
    So to pretend that there was somehow some national income safety net 
was a joke. Nobody was going to go below $187 a month. And if there was 
a political consensus for a higher level, they weren't going to go out 
and gut people. And the idea of spending this money to empower people to 
go into the workplace and then require people who could do so to try to 
get their personal act together and access the benefits and go in there, 
and then letting them keep their medical coverage for a while, is very, 
very important.
    The only thing I didn't like about the welfare reform bill was not 
that; it was the immigrant thing. But the two I vetoed--everybody acted 
at the time--the only thing that really disturbed me, and I realized I 
had not succeeded in getting people into the intricacies of welfare 
policy, was that I had people, both liberals and conservatives, who 
said, ``Well, he vetoed two of them, but he signed the third one because 
it's getting close to the election, and he wants credit for that.'' 
That's not true.
    The thing we were fighting about was whether or not, if you required 
people on welfare to go to work and they refused to meet the 
requirement--that is, they acted in a way that violated the 
responsibility portions of the law--how do you minimize the impact on 
their kids? And what I was unwilling to do, because there was a uniform 
national benefit there, was to scrap the food stamps or the Medicaid 
coverage for the children, where we did have a uniform national standard 
and nowhere near the variations that already existed in the monthly cash 
payment.
    So I thought that finally when they agreed to put those back in, I 
believed, given the way the budget fights were unfolding--and by then I 
was in my second one, in '96--that within a couple of years I would be 
able

[[Page 2404]]

to restore most of the immigrant cuts. And sure enough, we did.
    So I still think that some of them are not right and that we haven't 
restored, but I think, on balance, the welfare reform bill was a big net 
advance in American social policy and the right thing to do.

Budget Negotiations

    Mr. Klein. That's an interesting phrase, ``given the way the budget 
fights were unfolding.'' There seems to have been a pattern since '95, 
and I think that that may be part of the reason why people might not see 
the whole of what has gone on here--is that a lot of the stuff you've 
gotten since '95 has come in budget reconciliations at the end of the 
year----
    The President. Huge. And I've got to give a lot of credit to Panetta 
and Bowles, who was brilliant at it, and John Podesta and Ricchetti and 
all these people that worked the Congress, because they--and the 
congressional leadership in our party. Keep in mind, any time that our 
support among the Democratic minority drops below a third plus one, I 
have no power in the budget process. So I think that--but we have gotten 
enormous amounts done for poor people, for the cause of education--we've 
gone from a million dollars a year in 3 years to $445 million a year, 
something like that, in programs for after-school. And my budget this 
year, if we get that, we'll really be able to put an after-school 
program in every failing school in America--if we get what I asked for 
this year. Amazing stuff.
    I think that's one of the reasons that a lot of what we did in 
education has not been fully appreciated.

Education

    Mr. Klein. Ten million people taking advantage of HOPE scholarships 
and lifelong learning credits this year, according to Gene.
    The President. That's right.
    Mr. Klein. I mean, are you frustrated that this kind of stuff isn't 
more known?
    The President. Oh, a little bit. But the main thing for me now is 
that it's happening. And the other thing that I think is really 
important I'd just like to mention, that I think almost no one knows, 
that I think is, over the long run, particularly if we can get--it's 
interesting, the Republicans say they're for accountability, but they 
won't adopt my ``Education Accountability Act,'' which would require 
more explicit standards, more explicit ``turn around failing schools or 
shut them down,'' and voluntary national tests, which they're against, 
but we're working on it still.
    But just what we did in '94--in '94, in a little-known provision of 
our reenactment of the Elementary and Secondary Education Act, we 
required States to identify--getting Title I money--to identify failing 
schools and to develop strategies to turn them around. States like 
Kentucky that have taken it seriously have had a breathtaking result. I 
was down at that little school in Kentucky, in eastern Kentucky, the 
other day. And it was a failing school, one of the worst in Kentucky, 
over half the kids on school lunches--now ranked in the top 20 
elementary schools in Kentucky, in 3 years.
    Mr. Klein. What did they do?
    The President. Well, let me tell you the results they got. In 3 
years, here's what happened. They went from 12 percent of the kids 
reading at or above grade level to 57 percent. They went from 5 percent 
of the kids doing math at or above grade level to 70 percent. They went 
from zero percent of the kids doing at or above grade level in science 
to 63 percent--in 3 years. And they ranked 18th in the performance of 
elementary schools in Kentucky.
    Well, smaller classes, good school leadership, heavy involvement by 
the parents, and basically measuring their performance. It's stunning; I 
mean, it's just amazing.
    I was in a school the other day in Spanish Harlem that in 2 years 
went from 80 percent of the kids doing reading and math at or below 
grade level to 74 percent of the kids doing reading and math at or above 
grade level--below grade level, 80 percent below, to 74 percent at or 
above grade level--in 2 years. And I know what they did there because I 
spent a lot of time there. They got a new principal, and they 
basically--they went to a school uniform policy, one of my little ideas 
that was falsely maligned, had a huge impact. And they basically went 
to--they established goals and results, and you

[[Page 2405]]

either met them, or you didn't. It's amazing. And these children, the 
pride these children felt was breathtaking.
    So one of the things--I mean, I think one of the most important 
accomplishments of the administration was basically opening the doors of 
college to everybody with the HOPE scholarships and the direct loans. 
And if we could just get this tuition tax deductibility, then we haven't 
made it possible for every person making $40,000 to send all their kids 
to Yale, but we made it possible for everybody to send all their kids 
somewhere.
    Mr. Klein. That's not refundable, is it?
    The President. Not refundable, but it is deductible at the 28-
percent level for people that are in the 15-percent income tax bracket.
    Mr. Klein. Oh, I see. So it's a kind of semi-deduction.
    The President. Yes, well, in our proposal you get to deduct up to 
$10,000 at the 28-percent level even if you're in the 15-percent income 
tax bracket. So it's not refundable, but for the people that need 
refundability, they have access to the Pell grants and to loans they can 
pay back now as a percentage of their income under the direct loan 
program.
    Mr. Klein. You're getting restless. Let me ask you one last--well, 
I'm not going to guarantee this is one last. I might want to ask you--if 
I have a few more over time, is there some way I can get in touch with 
you?
    The President. Sure. You've interviewed 50 people. You've taken this 
seriously, so I want to try to----

Foreign Policy

    Mr. Klein. Well, it's the last 8 years of my life, too, you know. 
[Laughter] And I haven't even asked you about foreign policy, for God 
sakes. We'll do two things. Let me ask you about foreign policy. It 
seems to me that if you look at what you did, there are two big things 
you did in foreign policy. One was raise economic issues to the same 
level as strategic issues, which was crucial, and the other was to 
demonstrate over time that America was going to be involved and use 
force when necessary in the rest of the world. The second one is, 
obviously, more messy and dicey than the first. The third thing you did 
was essentially not do anything wrong and do really right things when it 
came to the big things like Middle East, Russia, China.
    The messy part of it is the dustups in places like Bosnia, Kosovo. 
People have told me that you really feel awful that you didn't do more 
in Rwanda. Is that true?
    The President. Yes. I don't know that I could have. Let me back up 
and say, I had a--when I came here, came to the White House, I sat down, 
basically, and made my own list of what I wanted to accomplish in 
foreign policy. I wanted to maximize the chance that Russia would take 
the right course. I wanted to maximize the chance that China would take 
the right course.
    I wanted to do what I could to minimize these ethnic slaughters, 
which basically the end of the cold war ripped the lid off. It's not 
that they didn't occur before, but now they became the main problem with 
the world.
    I wanted to try to create a unified Europe, which included an 
expanded NATO, supporting European unification, and dealing with all the 
countries around. I wanted to try to get Turkey into Europe as a bulwark 
against fundamentalist terrorism. That required some progress between 
Greece and Turkey, and we made some, not enough to suit me.
    I wanted to try to minimize the turbulence--the possibility of war 
and nuclear war between India and Pakistan, which is something that was 
not right for my involvement until rather late in my term. But one of 
the things that--and I wanted to try to--and I'll leave this until 
last--I wanted to try to broaden the notion in America of what foreign 
policy and national security was, to include health issues, to include--
like we made AIDS a national security threat--to include climate change, 
to include the globalized society, all these issues we started talking 
about.
    So the one thing I would say to you is that I think this has all 
occurred kind of under the radar screen--I'll come back to Rwanda--but 
one of the things I think should be mentioned is, we have spent an 
enormous amount of money and time and effort focusing America on how to 
minimize the threats of biological warfare, of chemical warfare.

[[Page 2406]]

What are we going to do? Will the miniaturization of the information 
revolution lead to small-scale chemical, biological, even--God forbid--
nuclear weapons? How are we going to deal with that? So we've done a lot 
of work on that.
    And to come back to Rwanda, one of the things I've tried to do with 
Africa is to--and Sierra Leone is giving us a good test case here--is to 
increase the capacity of the African nations to deal with their own 
problems, to support the regional operations like ECOWAS or OAU. And I 
developed something called the African Crisis Response Initiative, where 
we would go in and train African militaries. When I was in Senegal, for 
example, I went out to the community--to the training site there, on our 
trip to Africa, and saw the American soldiers training with the 
Senegalese to dramatically increase their capacity.
    What happened basically with Rwanda is we were obsessed with Bosnia 
and all the other stuff, and it was over in 90 days. I mean, they 
basically killed hundreds of thousands of people in 90 days. And I just 
don't think we were--any of us focused on it and whether we could have 
done something. But I made up my mind that we would certainly try to 
increase the capacity of Africans to deal with it and we would move in 
as quickly as we could. And like I said, what happens in Sierra Leone is 
going to be a little test of that.
    Mr. Klein. Do you think you were prepared for being a foreign policy 
leader when you came in? What are the things that you've learned in 
terms of----
    The President. I would say yes and no. I think----
    Mr. Klein. You had it in principle.
    The President. I think I had a very--because I'd been interested in 
it since I was a student in college, and I'd always been fascinated by 
world affairs. So the fact that I had not been a Senator or served in a 
previous administration I don't think was a particular disadvantage.
    I think all the economic stuff I think I had right and the fact that 
there was a lot more in economics involved, and it was about democracy. 
It was about minimizing war. It was about lifting people's sights so 
they had something better to do than killing their neighbors, be they 
were of a different religion or ethnic group. I think we had that right.
    I think we basically had the nuclear issues right, and the big power 
issues right with Russia, with China, what we tried to do in the Korean 
Peninsula.
    Where I felt--I think where I felt some frustration is maybe where 
even a President with a lot of experience would have felt frustration, a 
lot of experience in this, which is building the post-cold-war 
alliances, which proved to be very frustrating. I mean, we had a lot of 
frustrations--and we got panned a lot, and maybe we deserved some of it, 
and maybe we didn't--in '93 and '94, trying to put together some kind of 
coalition of our European allies to move in Bosnia.
    In Kosovo, having had the Bosnia experience, even though there were 
differences in the alliance, I have nothing but compliments for my 
allies. They were basically--we had our arguments. We should have. 
Nobody has got a monopoly on truth. But basically, we got together; we 
moved quickly; we did the right things.
    And I think that the idea of how we might even go about 
mechanically, operationally, dealing with something like Rwanda just 
wasn't there. The French and others that had been more active in that 
part of Africa, I think they may have had a better sense of it, although 
they went in late.
    Mr. Klein. But you were acting with more confidence, too. You 
weren't asking, you were telling.
    The President. Yes, well, it happens once you've been around and you 
know people, you know what it was. But it was--I think that some of 
that, when you've got to have some support from other countries and you 
can have an uncertain result but you think you have to try, it just 
takes a while until you get your sea legs and you get everything worked 
out, particularly when there aren't sort of institutional structures and 
policies and rules of the road there. And so I think we did get it 
right.
    If you take another sort of sad moment of the administration, when 
we lost our soldiers in Somalia----

[[Page 2407]]

    Mr. Klein. Almost at the same time as the ship turned around in the 
harbor in Port-au-Prince.
    The President. When we lost our soldiers in Somalia, it was a very 
sad thing. But that happened, I think--and I hope the Congress will 
never decline to put people in peacekeeping missions because of it, 
because basically our guys did a terrific job there. But there was an 
operational, I think, decision made there, which, if I had to do it 
again, I might do what we did then, but I would do it in a different 
way.
    I remember General Powell coming to me and saying, ``Aideed has 
killed all these Pakistanis, and they're our allies. Somebody needs to 
try to arrest him, and we're the only people with the capacity to do 
it.'' And he said, ``We've got a 50-percent chance of getting him, and a 
25-percent chance of getting him alive.'' And so, he said, ``I think you 
ought to do it.'' And I said, ``Okay.'' But today, with that number of 
people there--and then he retired. He left, like, the next week. I'm not 
blaming him; I'm just saying that he was gone.
    So what happened was, we had this huge battle in broad daylight 
where hundreds and hundreds of Somalis were killed, and we lost 18 
soldiers, in what was a U.N. action that basically, if I were going to 
do it again, I would treat it just like--if we were going to do that, 
I'd say, ``Okay, I need to know what's involved here, and let's do this 
the way we planned out the military action we took against Saddam 
Hussein, for example, or the military action I took to try to get Usama 
bin Ladin's training camps, or anything else.''
    It doesn't mean America shouldn't be involved in peacekeeping, but 
it means if you go beyond the normal parameters that you decide on the 
front end, then the United States has to operate in a very different 
way.
    Mr. Klein. There doesn't seem to be a uniform set of ground rules 
yet in place.
    The President. I don't think there is, but we're getting there.
    Mr. Klein. Should there be? Could there be?
    The President. I think it's pretty hard, but I think you--anyway, I 
will always regret that. I don't know if I could have saved those lives 
or not, because I think what we were trying to do was the right thing to 
do, and the people who were there on the ground did the best they could. 
But I would have handled it in a different way if I had more experience, 
I think. I know I would have.
    The only other thing I was going to say about this is that--we 
talked about earlier how I hope in the future that the Congress will 
give more support to science and technology, beyond NIH. I hope in the 
future the Congress will give more support to our national security 
budget beyond the defense budget. As well-off as we are, one real big 
problem, we should be spending much more than we're spending, in my 
judgment, to fight global disease, to promote global development, to 
facilitate global peacemaking and peacekeeping.
    I think that we need to succeed in getting the bipartisan majority 
in Congress with a much broader view, because people look at us, and 
they know how much money we've got, and they know what our surplus is. 
And all these other countries are struggling, and we shouldn't be so 
begrudging--I fight with the Congress all the time--in our contributions 
to peacekeeping and to creating the conditions in which democracy and 
peace will flourish.
    I'm encouraged by how Congress voted in this Colombia package 
because it's a balanced package, and it has a lot of nonmilitary, 
nonpolice stuff in it. And I'm hopeful that we'll have a more--I saw Ben 
Gilman had a very good article--somebody else--he and a Democrat, I 
can't remember who it was, wrote an article in the L.A. Times yesterday 
talking about the importance of the United States taking the lead in the 
international fight against global disease. That's one thing that I 
hope, after I'm gone, I hope that the next President will be more 
successful at than I was.

Post-Presidency Plans

    Mr. Klein. Let me ask you--this is it--after you're gone, you're 
going to be the youngest ex-President since Teddy Roosevelt. If there 
was one thing that Teddy Roosevelt did absolutely awful, it was be an 
ex-President. I mean, he was really terrible at it because he was so 
engaged, so involved, and he couldn't quit kibitzing.

[[Page 2408]]

    The President. Well, he felt, to be fair to him, that the 
Republicans had abandoned his philosophy. He felt Taft had kind of let 
him down.
    Mr. Klein. You also have a restraining amendment in the Constitution 
that he didn't. But do you worry about that?
    The President. No. Well, I do, because--[laughter]--but not in the 
way you think. I don't think that the next President, whoever it is, 
will have problems with me acting like I wish I were still President. I 
mean, I think I know how to behave, and I've been here, and I want my 
country to succeed. And for my country to succeed, the Presidency has to 
function. And I don't want to complicate that.
    So the challenge I have is to figure out how to have a meaningful 
life, how to use all this phenomenal experience I've got and what I know 
and the ideas I have in a way that helps my country and helps the things 
I believe in around the world and doesn't get in the way of the next 
President. And that's what I have to do. I've got to figure out how to 
do it.
    Mr. Klein. Any thoughts?
    The President. I've thought about it, but I'm not ready to talk 
about it yet. But the one thing that I--[laughter]----
    Mr. Klein. You've talked about everything else today. [Laughter]

Philosophy of the Presidency

    The President. Yes, but the one thing that I--the reason I wanted to 
spend so much time with this interview--if you want to talk to me 
anymore, just call, and we'll talk more on the phone--is that you always 
knew--and even when you got mad at me, it was because you thought I'd 
stopped it--that I would take this job seriously. I mean, the basic 
thing that I can tell you about this is, I will leave Washington, 
believe it or not, after all I've been through, more idealistic than I 
showed up here as, because I believe that if you have a serious 
Presidency, if you have ideas and you're willing to work and you're not 
so pig-headed that you think you've got the total truth and you work 
with other people and you just keep working at it and you're willing to 
win in inches as well as feet, that a phenomenal amount of positive 
things can happen.
    And you always thought that I was trying to have a serious 
Presidency. That's all I ever wanted.
    Mr. Klein. I got pretty pissed off at times.
    The President. Yes, that was all right. But at least--but when you 
were mad, it was because you thought I was abandoning something I said I 
would do, that I was trying to do. I never had any--my frustration was 
with the people in your line of work that I thought didn't take all this 
seriously, that thought it didn't matter one way or the other, that 
thought it was some game, or who was up or who was down, or where was 
the power equation, or something.
    Because it really does matter. There are consequences to the ideas 
people have. One of the worries I have about this election is all these 
people writing as if there is no differences and there are no 
consequences. The American people should make a judgment knowing that 
there are differences and there are consequences and it matters what you 
do.
    The thing that I think the last several years has shown is that a 
lot of these problems yield to effort. And if you're willing to just put 
in a few years of effort, you can push a lot of rocks up a lot of hills. 
People should feel really good about that.
    One of the things that I hope when I leave office that people will 
say is, I hope that there will be a greater sense of self-confidence 
about what America can achieve. But it requires you--everybody has got 
to play politics, and I understand all that. I don't want to get 
sanctimonious about that just because I'm not running for office for the 
first time in 26 years. That's part of the political system. And 
everybody will take their shots and do this. But in the end, the 
Presidency should be informed by a set not just of core principles and 
core values but ideas--that there ought to be an agenda here. People 
ought to always be trying to get something done. And you shouldn't be 
deterred by people saying it's not big enough, or it's too big, or all 
that. There ought to be a broad-based view of where the world should go 
and what the role of the Presidency is in taking America where it should 
go. And as long as there is,

[[Page 2409]]

I think our country is going to do pretty well. In that sense, I will 
leave office phenomenally optimistic.
    And everything I ever believed about the American people has been 
confirmed by my experience here. If they have enough time and enough 
information, no matter how it's thrown at them, in how many pieces and 
how slanted it is or whether it's inflammatory or whether it's designed 
to produce sedation, no matter what happens, they nearly always get it 
right. That's the only reason we're around here after--the Founding 
Fathers were right. Democracy, if given a chance to work, really does. 
If there's enough time and enough information, the American people 
nearly always get it right.
    So, in that sense, I just--I'm grateful I've had the chance to 
serve. I've had the time of my life. I've loved it. Probably good we've 
got a 22d amendment. If we didn't, I'd probably try to do it for 4 more 
years. [Laughter]
    Mr. Klein. Well, I'll tell you something--turning this off--two 
things. One is, every last campaign I've covered since '92, I found 
myself judging against that one, in just big ways and little ways. And 
the other thing I promised my son I'd tell you--he's just finishing up 
his first tour as a foreign service officer in Turkmenistan, and he said 
his proudest possession is his commission document with your signature 
on it.
    The President. Wow. Well, if you go back to that '92 campaign, it 
just shows you, though--the only other thing I would say is, I think I 
was so advantaged by having been a Governor for 10 years when I started 
running, or however long I'd been serving, and having had the 
opportunity to develop these ideas over time and then to measure them 
against the experience I've had.
    I still think ideas and organized, concentrated effort mattered. No 
President with an ambitious agenda will fail to make errors. Things 
happen in other people's lives. Maybe something will happen to the next 
President. God knows they won't go through what I did, but maybe their 
kids will get sick. Things happen in people's lives, and mistakes get 
made. And sometimes you just make a wrong call. But if you've got--if 
you're serious and you've got a good agenda and you have good people and 
you work at it in a steady way, you get results.
    It really is a job like other jobs. That's another thing--I think 
it's important--you said something in your letter to me, which I think 
is true, that maybe we had removed all the mystery around the 
President----
    Mr. Klein. I didn't even get a chance to ask that question.
    The President. ----and maybe that's not good. And maybe that's not 
good, but I do believe that we need to demystify the job. It is a job. 
And if you love your country and you've got something you want to do and 
you've thought it through and you've put together a good team and you're 
willing to be relentless and to exhaust yourself in the effort, results 
will come.
    That's what I would like the American people to know.They should be 
very optimistic about this.

Diversity

    Mr. Klein. You know, they are. They're in such great shape right 
now. I noticed it traveling around this year. It's not just everybody is 
getting along, but they appreciate the thing that you always said way 
back when, which is that diversity is a strength.
    Sandy was telling me about your first G-7 conference, which I don't 
expect you to talk about on the record, but he was telling me about how 
the Japanese were lecturing you about how to run an economy. And when 
you took office, most people believed that we were going to get taken to 
the cleaners by the Japanese and the Germans, because they were 
homogenous and we were mongrels. And now most people--you know, most of 
those Archie Bunkers out in Queens have a niece or a nephew who is 
dating a Puerto Rican at this point. And most people----
    The President. Or an Indian or a Pakistani. I went to a school in 
Queens the other day, and I mean, I thought I was--there was one guy 
there, I could swear the kid was from Mongolia. There were a lot of East 
Asians. There were a lot of South Asians. There were all the Puerto 
Ricans. There were all the other Latins, you know.

[[Page 2410]]

    But the test that--that's not over, but I think people are beginning 
to feel good about it.
    Mr. Klein. Well, I mean, kids my kids' age, your kid's age, think 
it's a positive value.
    The President. It is a positive value. It makes life more 
interesting. I keep telling everybody, the trick is to figure out how to 
respect all these people's--other people's traditions, religions, the 
whole thing, cherish your own, and then--but the only way to make it 
work, which is why I keep citing this human genome finding that we're 
99.9 percent the same, is to realize that the differences make life 
interesting, but the similarities are fundamental.
    If you can get people to think that--what we have in common is 
fundamental, but the differences make life more interesting--then I 
think we'll be okay. And I still think that's still the most important 
thing of all. It's even more important than the right economic policy, 
because eventually we'll get all that stuff. We'll make mistakes; we'll 
correct it. But if your whole heart and mind and spirit is wrongly 
turned, then you can do everything else right, and you still come a 
cropper. You'll have problems.
    So I really--I think this advance in race relations is profoundly 
important. I'll give you one--exhibit A was old Gordon Smith's speech 
for the hate crimes bill. Did you see that?

Note: The interview began at 5 p.m. in the Presidential Suite at the 
Sheraton New York Hotel and Towers. The transcript was released by the 
Office of the Press Secretary on October 10. A tape was not available 
for verification of the content of this interview.