President Carter
Page 19
A decisive factor was the irrepressible Admiral Rickover, who influenced Carter more than anyone except his father and had kept in touch with all his naval protégés as their careers advanced. When Carter was governor, Rickover did an analysis of the global energy situation, which with characteristic originality he calculated in cubic miles. “I have never seen anything since that, which let a peanut farmer envision the reserves of coal and natural gas and oil … and how fast we were using it up, without any conservation,” Carter shared with me. He thought of his hometown as a circle a half mile in diameter and a mile deep in oil, and world reserves then being depleted by a cubic mile. Rickover calculated that world reserves had been depleted over time from roughly twenty-one to eighteen cubic miles, and we were using up so many cubic miles a year.10 When they got to the White House, Carter asked for an update in cubic miles, when the universal measurement was barrels of oil per day, and with Schlesinger’s small staff working furiously on the complex energy program, Schlesinger worked out the figures.11
One last piece of the puzzle was Carter’s first CIA briefing as president-elect. I was the only Carter staff person in attendance, delivered in person by then-CIA director and later president George H. W. Bush with patrician elegance and the authority of a former Texas oil operator. His message was that the Saudis would abandon their restraint and join Iran in raising OPEC’s prices, resulting in a severe brake on world economic growth. The warning was based in part on a flawed CIA report forecasting that if America’s avaricious appetite for oil was not curbed, world demand for oil would exceed supply by 1985—a prediction that collapsed with the oil market itself in that same year. This market collapse helped bring down the Soviet empire, to the complete surprise of American intelligence.12 Schlesinger, his aides, and my energy and natural resources expert Kitty Schirmer all derided the report for failing to recognize that rising prices would simultaneously nudge discoveries and conservation, thus bringing supply and demand into balance. The CIA report nevertheless galvanized the president, and was among the principal factors that moved energy to the top of his agenda13 at the first cabinet meeting after the election.14
I took a seat just behind the president, with my back to the snow-covered Rose Garden; the cabinet officers were arrayed around the huge, oval-shaped table in order of the creation of their departments, with Secretary of State Vance to his right and the vice president directly across from the president, whose seat was a few inches taller than the cabinet members’, each of whom had a plaque on the back of his chair designating his office. There were American flags in the corner of the Cabinet Room to the president’s right, with streamers from major battles fought by our armed forces over the course of American history. One would have had to be brain-dead not to be thrilled by this moment after one of the most improbable presidential political campaigns in American history.
The president announced that the cabinet would meet once a week on Mondays, and that “all congressional legislation would go through Stu to me.” He admonished his cabinet officers to “involve Congress on the initial stages of legislation,” and a month later at the February 20 meeting he instructed them to send copies of their testimony to me. But unfortunately on energy legislation, he did not enforce either admonition. During that cabinet meeting, as each member intoned about his priorities, my former boss in the LBJ White House, HEW Secretary Califano, slipped me a note: “Stu, Welcome to the problems that will drive you crazy. JAC, Jr.”15
THE FIRST ENERGY CRISIS
We had barely unpacked the boxes in our new White House offices when an energy crisis hit. The winter of 1976–77 was one of the most brutally cold on record, and there was a severe shortage of natural gas in the Northeast and industrial Midwest. Our family was renting the house of the conservative columnist George Will in northwest Washington until Fran could find a permanent home. The snow and hard-packed ice prevented me from getting my car out of the driveway to get to the White House, so I had to get a special waiver from the president’s edict against home–to–White House limousine service; it was a one-day headline with a four-year burden.
Poor people were hit hardest by the icy weather, not only because of gas shortages but due to poor insulation and heating. Governors were also complaining—Milton Shapp of Pennsylvania warned me that without some disaster relief he would have to cut off natural gas to certain industries at the beginning of February. Carter immediately called a special cabinet meeting, declared New York and Pennsylvania disaster areas, and sent legislation to Congress giving him emergency authority to order gas fed into interstate pipelines.16 It was quickly enacted, but this short-term palliative would be the only energy legislation on which Congress acted quickly.
Schlesinger pressed his own gloomy assessments in cabinet meetings and at a February breakfast meeting with the Economic Policy Group (EPG).17 He warned that the world was “moving out of an era of abundant and cheap energy,” and emphasized conservation—raising fuel efficiency standards in vehicles, saving oil by better home insulation, and converting industrial use from oil and gas to coal and nuclear power. Another breakfast with both Republican and Democratic congressional leaders—an innovation that continued throughout the administration but has rarely been followed since—was largely devoted to general discussions of energy legislation.
Carter compounded the problem of setting an arbitrary ninety-day deadline by ordering that the plan be developed in secret in order to catch interest groups unaware before they could organize against it. But if the energy plan was to be drawn up like a wartime offensive, there was no foreign enemy here, only some members of his administration concerned about pushing through a complex plan in only ninety days, without time to calculate the impact of higher energy prices on inflation, as well as leaving some of the most powerful members of Congress feeling excluded from the development of the battle plan.
The leader of Schlesinger’s team of smart and experienced experts was Alvin L. Alm, a tall, ungainly, kind, and brilliant assistant administrator in the Environmental Protection Agency, who heard about the deadline on the radio while driving to work. “Boy, I feel sorry for the poor son of a bitch that has to do that!” he thought. When he called Schlesinger to congratulate him on his new job as energy czar, Schlesinger asked him to join the team already at work. When Alm arrived and asked Schlesinger who was running things day to day, Schlesinger replied: “You are!”18 Working brutally long hours under tremendous pressure, Alm never lost his good humor and found it easier to assemble a package without having to fight through a huge departmental bureaucracy and the interagency consultations that can stifle new ideas with the weight of often-fossilized experience. Reflecting on Carter’s decision to take advantage of a presidential honeymoon to attack a huge and intractable problem, he said, “You just couldn’t pick all the winners because you didn’t know what the winners were. So from an energy point of view, you got more by proposing more. You shoot 113 rockets and a lot of them would come down.”19
There is something to be said for a closed process: It moves quickly through the minds of experts without distraction. But this turned out to be a mixed blessing typical of Carter’s drive to deliver the best possible solution to a problem regardless of the political forces involved. Carter later conceded that to him the deadline seemed “an eon in time” because he was used to calculating by the constitutional limit of the Georgia legislature of an annual thirty-five or forty-five days.”20 But Georgia is not Washington.
There is also something to be said for a president moving quickly on a key priority while his popularity is at a peak, but the president paid a heavy price. In one sense the story was vintage Jimmy Carter seeking comprehensive solutions rather than an incremental approach. But the real disadvantage was that, in producing the package in haste, it became less coherent than if it had been assembled strategically. The different moving parts lacked critical balance because the architects were deprived of feedback from those who, however vigorously they might advance the
ir own interests, still had a better understanding of the realities than the cloistered experts.
Initially Schlesinger’s team did reach out to the administration’s economic and taxation experts, and there were meetings with industry and environmental groups as well as regional energy forums. But they were mainly listening sessions to pick up ideas rather than opportunities to test the team’s own recommendations. By presidential order the package was kept secret from anyone in Congress or the executive branch for fear of leaks, depriving the team not only of outside expertise but also of essential public feedback that could have helped shape a more politically acceptable package. And it did not stop the leaks anyway.
Why wasn’t the president challenged on his gag order covering the crucial final month? Just as being unwilling to bring the bad news about Lance to Carter proved, therein lies an important lesson about the awe and majesty of the presidency, particularly in his early months in office. It takes a very special person to pierce that veil, even when a subordinate knows that the boss is wrong. The president carries a democratic legitimacy that no appointee or career civil servant can match; few would dare challenge him except in the most unusual circumstances.
Les Goldman was one of Schlesinger’s most knowledgeable subordinates, having dealt with oil and gas as a Senate staffer, and he felt “almost an amazing sense of holiness of what the president was saying. We may think it’s wrong—but he’s the boss and let’s go on with it, and do the best we can do.… There isn’t anybody who is so bright that they can figure out all the angles that will be thrown up against you.… You have to test ideas, and particularly when you’re dealing with [Congress], you need some level of involvement so that they feel it’s theirs, or at least they have a sense of what’s coming.… It was a very hard thing to express doubts and put your foot down and say, ‘No, I’m sorry, this is just nuts, nuts.’” That led to a kind of intellectual insulation instead of the creativity born of an exchange of ideas and interests that lies at the heart of the democratic process.21
As Schlesinger’s plan began to evolve, however, it bore Jimmy Carter’s authentic stamp. Its first priority was not producing more oil and gas but conserving a vital resource through a variety of tax increases and incentives. To him it was a moral issue to waste a precious and declining basic commodity, and a religious belief that God’s resources were being fouled. Schlesinger was a conservationist himself; born a Jew, he had converted to the stern virtues of Lutheranism. He correctly saw the president as “a moralizer in regard to energy.… He believed that if you only could explain to people how damn wasteful we were, we could have solved that energy problem.… It was as much a moral conviction that we should be provident in our use of the resources that have been placed by the Almighty in relation to the energy problem.”22
Conservation was a passion for Carter and was the first item David Rubinstein and I cited in the energy section of the 1976 brochure of campaign promises we had been ordered to produce by President-elect Carter. He was an outdoorsman and loved to fish in pure streams and hunt in the clear air of his native southwest Georgia, and his sense of conservation extended from the individual to the community to the attitude of government. He abhorred waste, and wasting precious oil and natural gas was unacceptable profligacy. The breadth and controversial nature of the conservation provisions Carter proposed were nothing less than a bold attempt to change the behavior of the American people.23
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I knew I had achieved the pinnacle of power in Washington when I was visited by the folksinger John Denver, open-shirted with handsome blond locks flowing, whose music I loved. Predictably, he underscored the importance of subsidizing conservation and said he and Robert Redford were willing to do a six-month ad campaign to inform the public of the importance of conserving energy. He called for a “Manhattan-type Project,” like the one that produced the atomic bomb, for NASA to loft a giant “solar receiving satellite” into space by 1995 to reflect solar power for the entire world.24 His ideas may have been close to science fiction, but readiness to commit his and Redford’s celebrity status made it clear that in the short space of a month after his inauguration, the new president had indeed attracted star power to help place energy at the center of the nation’s agenda.
I was more concerned by the hard facts of a briefing the president arranged for Schlesinger to provide the cabinet and senior staff and our spouses in the White House theater on March 14, only five weeks before the deadline to publish the energy plan.25 Again Schlesinger underscored that conservation was the key. European countries were already two times more energy efficient per unit of GDP, in part because they had few energy resources of their own except for their almost exhausted coal mines, and had adopted a high-taxation policy to conserve oil. Schlesinger asserted that the transportation sector in America wasted 60 percent of our energy, but in Europe any tourist can see the result of high energy taxes in its small, fuel-efficient cars and heavy investment in rail and other public transport.
With its own resources, America had a different problem, and Schlesinger raised a key question: Would deregulation of prices encourage greater exploration? Flying directly in the face of Carter’s campaign pledge, Schlesinger told us that while some argued that greater incentives would produce more gas, he believed that there were not enough gas reserves, and “the free enterprise system would not alone solve our problem.” Carter suddenly interjected, “I cannot wait until Jim takes office to attack the energy problem,” but then forecast, almost as a badge of honor, that “my own ratings will fall when I attack this problem directly.”26 Throughout his presidency Carter would throw himself into highly complex and politically vexed issues like this and almost take glee in doing so, as if to show his mettle as well as relishing the image of making a political sacrifice for the public good.
The Schlesinger team assembled 290 separate initiatives that were whittled down to about 90, which Schlesinger presented to the president alone in a three-ring binder. Carter read it and returned it to me, with a note that I should share it with no one. It was the first I had seen of the proposed program, even though Schlesinger’s office was just down the hallway from my office in the West Wing, and was largely what Carter would present to Congress. I ignored the admonition, and had Kitty Schirmer, who headed natural resources on my Domestic Policy Staff, read it; her reaction was that “we were trying to scratch every single itch.”27
The secrecy made Schlesinger the fall guy for Congress and others in the administration, which complicated his ability to advocate the legislation he had drawn up. There had been almost no consultation between agencies or even within the White House. Also cut out were the powerful committee chairmen—and not only Scoop Jackson, the Energy Committee chairman, who felt marginalized, but the pivotal chairman of the Senate Finance Committee, Russell Long of Louisiana, for whom legislation was a transactional process among interest groups. Long saw the interests of his home-state oil and gas industry as a mere extension of the national interest, and for him, a presidential message was only the first chapter in a long process, often merely incidental to the deals he struck. To make matters worse, there was a clear jurisdictional overlap: Jackson’s committee was responsible for oil and gas pricing, but shaping energy taxes to encourage conservation and production was Long’s domain.
This hardly made for comity even in a chamber controlled by Democrats, because the barons were in combat with one another. Senior people in Congress as well as the executive branch have great pride. They accept long hours and low pay because they genuinely want to help pass laws and manage policies to make the country and the world a better place. When they feel shut out of the process, they do not accept it easily, even if a president’s policies are not far from their own. Members of Congress may forgive a president proposing something they oppose, but not embarrassing them by making them appear without influence to the people who elected them. Another victim of the closed process was the interest groups, and particularly the energy indu
stry, which could have been enlisted even as reluctant participants in a process that its more enlightened members realized was necessary to reform a broken system.
* * *
One of my most important jobs was to ensure a kind of due process in presidential decision making by soliciting a wide spectrum of views from all the agencies, key congressional leaders, and interest groups, and assembling them into what is called a presidential options memorandum. It often contained the perspectives of different government departments, the interest groups with whom they dealt, and the congressional committees through which their budgets and legislation went, the ubiquitous “Iron Triangle,” because the three sides hang together to maintain the status quo from which all have profited. But as the only person in Washington who has been sent by the electorate nationwide, the president has the responsibility to adjudicate among conflicting interests. Bringing them into his decision making gives them a stake in it even if it has gone against them, but it also makes them more likely to support and defend it.
I had to assure every agency that even when I disagreed, I would present their views and backup analysis fairly to the president. But early experience of the energy plan, which was neither transparent nor participatory, left me with the conviction that while a fair and open process does not guarantee a good result, without it any administration can expect trouble. The smartest and most senior operatives, and even their leader, often do not understand the full ramifications of what they are proposing. For the energy bill, on which President Carter would stake so much of his reputation, I simply could not do my job and serve him by exposing all the cross-currents of opinion, or the economic and political impact of Schlesinger’s options.