by Leon Panetta
“It’s the Right Fight”
On November 3, 1992, the voters of my district reelected me to my ninth term, this time with the support of more than 70 percent of those who cast ballots, more than three times as many votes as those of my closest opponent. In Washington, I chaired the Budget Committee and enjoyed good relations with my colleagues, and Bill Clinton’s victory on that same election day meant that for the first time in twelve years, I would go about my work with the support of a Democrat in the White House. Safe in my district and well positioned in Congress, I looked forward to 1993 as an opportunity to make real progress on issues close to my heart.
By the time voters actually went to the polls, Clinton’s election was not entirely unexpected, though no one would have predicted it eighteen months earlier. On March 3, 1991, Iraq had reluctantly accepted the terms of a cease-fire that brought the Gulf War, Operation Desert Storm, to a conclusion. It had not succeeded in what some regarded as its fundamental mission—the ouster of Saddam Hussein—but Iraq had been driven from Kuwait and bombarded into submission. As of that day, nearly nine out of ten Americans approved of George H. W. Bush’s work as president.1 Any pundit taking the measure of Bush’s presidency at that point would have been laughed off the talk show circuit if he’d predicted that Bush would not be reelected. Leading Democrats took note, and many of those who aspired to the presidency put their plans on hold. New York governor Mario Cuomo flirted with a bid, but opted out, as did New Jersey senator Bill Bradley. House Speaker Dick Gephardt and Senator Al Gore, both of whom had run in 1988, took a pass as well. Along with many Democrats, I resigned myself to another four years of Republican rule in the White House.
But one lesson I had learned long ago was that public opinion is fickle, and a faltering economy quickly overtook the glow of wartime victory. Bush’s popularity began a precipitous descent as the recession set in, and his invincibility collapsed. Between October 1991 and February 1992, he dropped twenty points in the polls, and he continued downward from there. By the middle of 1992, fewer than one in three Americans approved of his performance. Few presidents have ever squandered more goodwill more quickly.
Bill Clinton, meanwhile, doggedly marched on. Determined to present himself as a “New Democrat,” Clinton ran as a southern moderate—liberal on many leading social issues but supportive of the death penalty and gun ownership, in favor of a tax cut, and willing, even eager, to depart from Democratic orthodoxy in areas such as welfare reform. He announced his candidacy on October 3, 1991, with a direct appeal to the middle class, much of which had drifted into the Republican column during Reagan’s terms. Clinton’s mission, he said, was “restoring the hopes of the forgotten middle class.” I’ve never known a politician with a better instinct for the political center. Clinton grabbed it firmly.
That year’s presidential election was both clarified and complicated by the third-party candidacy of Ross Perot, the personable if slightly eccentric Texas businessman who ran an idiosyncratic race that year. Backed by homemade charts and homespun charm, Perot launched blunt attacks on Washington and especially the national debt that earned him a substantial legion of followers and made him difficult to ignore. He campaigned through a series of thirty-minute infomercials in which he colorfully took aim at President Bush and other political leaders responsible for job losses—the “giant sucking sound” of Mexico taking formerly American jobs was one of Perot’s more memorable images—and for leading the nation to financial ruin by running up increasingly unsustainable deficits and debt. Somewhat to my surprise, after years of my arguing the significance of deficit reduction to often glassy-eyed audiences, Perot’s pitch hit the mark. He appeared briefly to be a serious contender—at one point he actually finished first in a presidential poll—and forced the rest of the field to grapple with his issue. Since that also happened to be my issue, I was glad to see the field contend with it, even if deficit reduction’s champion was the slightly goofy Perot.
Clinton always had a sensitive ear for the populace, and Perot’s message began to influence him as well, though he had to fight through controversies to get there. Although he was substantively trying to make the case for a “New Covenant,” his campaign careened from explaining his relationship with Gennifer Flowers to defending his avoidance of the draft to insisting that while he had tried marijuana he had not inhaled. He persevered, one of the qualities I would come most to admire in him. After finishing behind Massachusetts senator Paul Tsongas in New Hampshire, Clinton bounced back on Super Tuesday, when a sweep of southern states propelled him into the lead for the nomination. Tsongas dropped out, and Clinton was the last man standing.
On the Republican side, Bush was paying the price for inviting Americans to read his lips. Pat Buchanan seemed unlikely to convince a majority of voters, even of his own party, to support him, but he stirred conservative unease with Bush, and won nearly 40 percent of the New Hampshire primary vote. Like Clinton, Bush rebounded, but he was clearly wounded.
With the country slogging through a mild recession and Perot gnawing on the issue of the debt, it was natural that Republicans would debate the nation’s fiscal strength. What surprised me was that Bush would do it so badly. He never seemed to find the right answer to questions about the economy. During one debate, a member of the audience asked each of the candidates how the national debt and recession had affected them personally, and Bush looked cross and confused as he fumbled around for an answer. His disavowal of the 1988 tax hike didn’t bring conservatives back to him, and it denied him what I believe would have been his stronger argument—that the nation’s needs were more important than any political promise. Bush had shown guts by doing what he believed was best for the country; instead, he appeared weak.
Clinton pounced on the divisions within the Republican Party and the nagging uncertainties about Perot’s temperament. The Clinton campaign already was advancing the notion of a middle-class tax cut as part of an economic stimulus package, but Perot’s emphasis on the debt—and Bush’s reluctance to talk about that issue for fear of reminding people of his tax hike—led Clinton to embrace deficit reduction as well. His specific promise was to cut the deficit in half in four years. The result was a bit incoherent—the middle-class tax cut would increase the deficit, so the two proposals were at cross-purposes—but it nevertheless marked an important moment in my mind: For the first time in my political career, we were engaged in a serious national discussion of the deficit, with a Democratic presidential candidate endorsing the need to bring the budget into balance.
As the campaign progressed, Clinton’s connection to the American people deepened. He defied conventional political wisdom at the convention and, rather than balancing his ticket geographically or ideologically, picked fellow southerner and fellow moderate Al Gore as his running mate. The two then decamped for a bus tour that crackled with energy. I’d known Al from my first days in Congress—we were freshmen together—and I could sense the enthusiasm he brought to the campaign and the friendship he shared with Clinton.
There was one particular moment when I realized the Clinton-Gore ticket had luck on its side. We were preparing to dedicate the Monterey Bay National Marine Sanctuary, and I invited President Bush to attend—he had been supportive, and I appreciated his work on behalf of that important issue for my district. By then, however, the Bush campaign had written off California, and the president declined. Instead, Al Gore made an appearance. As he strode to the lectern to address the crowd on a perfect, blindingly blue Central Coast day, a sailboat swept across the water behind him, providing a picturesque backdrop. This, I thought to myself, is something special.
Perot, having helped shape the race, abruptly dropped out as the Democrats were nominating Clinton, and then just as abruptly dropped back in. That reinforced questions about his judgment, as did his selection of Admiral James Stockdale, who memorably distinguished himself during the vice presidential debate with his opening question: “W
ho am I? Why am I here?” Still, while Perot didn’t come close to winning, he drew almost 19 percent of that year’s presidential vote, torpedoing any chance that Bush might have had at being reelected. Clinton did not win a majority of the popular vote (nor would he in 1996), but he prevailed over Bush and headed for the White House.
With Clinton elected president, Democrats in charge of both houses, and the deficit squarely on the national agenda, I had great hopes and was preparing for the coming term. It did not turn out as I imagined.
I was home for Thanksgiving and out on the ranch pruning apricot trees one afternoon when the phone rang. Sylvia answered it, and called for me. It was Warren Christopher, the universally respected Los Angeles lawyer and political operative whom I had known for years, going back to when he served under President Carter—Christopher had been a deputy attorney general under Lyndon Johnson and then a deputy secretary of state under Carter, perhaps best remembered for negotiating the successful release of the American hostages in Iran. He returned to Los Angeles during the Reagan and Bush years—he chaired the commission that examined the Los Angeles Police Department after the beating of Rodney King and that led to profound reforms of that agency—but Clinton had summoned him back to help the president-elect form his cabinet. That meant that a call from Christopher in November 1992 was something many leading Democrats were hoping to get. I dropped my pruning shears and hustled inside.
Always discreet, Christopher did not spell out precisely what he and Clinton had in mind for me, but he asked whether I would be willing to pay Clinton a visit in Little Rock. I was honored to be asked, though a bit unsure about taking a spot in the administration. After all, I had just been reelected, liked my work, and had an important job in Congress. Nevertheless, the following morning I was en route to Arkansas.
Truth be told, while I was flattered and a bit nervous about the conversation I was headed into, I was not entirely surprised to get the call. House majority leader Dick Gephardt, whom I had known since he first arrived in Congress as my classmate in 1976, had already made the trip to Little Rock, and when he returned he told me that he, Speaker Tom Foley, and George Mitchell, the Democratic leader in the Senate, had recommended me to Clinton as a possible budget director in the new White House. Although Christopher hadn’t mentioned that possibility, I figured it was probably the reason I was heading to Little Rock. Still, nothing had been offered, and Clinton and I barely knew each other, so it was hardly certain that I’d get that position or any other.
The national political press corps had relocated to Little Rock immediately after the election—the Holiday Inn and the Capital Hotel both were teeming with reporters—and a number were staked out at the governor’s mansion, a stately, fenced-off residence in a leafy neighborhood just a couple miles from downtown. When I arrived at the Little Rock airport, I was hurried into a waiting SUV with tinted windows and driven to a back entrance of the mansion so I could enter unobserved. I did, though I caught a glimpse of the reporters as my car slipped through the gate—my first brush with the cat-and-mouse game that the Clintons and the press would play with one another through the presidency. Once inside, the first person I encountered was Hillary Clinton, whom I had met only once, at an education event in Washington during the campaign.
Hillary was warm and welcoming. She extended a hand and spoke briskly. “I’m glad you’re here and glad you’ll be talking with Bill,” she said. Though friendly, our conversation was notably professional, not social. She was there to vet candidates, not make them feel at ease. Before parting, she took me upstairs and introduced me to her husband.
Wearing a shirt and tie but no coat, Bill Clinton welcomed me into the library, both of us recalling that we had actually met one other time, before he became a presidential candidate. Our first meeting came about when Clinton, then still a governor, joined his gubernatorial colleagues for a discussion with the House leadership on increasing federal aid to education. On that occasion we spoke only briefly, but I recalled raising with him my concerns about the ramifications of increased spending on the federal deficit. As a result, though this was a get-acquainted session, it was also a return to familiar topics.
Clinton was serious and focused, ravenously intelligent, and eager to understand the federal budget process, which was very different from the system he’d worked in Arkansas. There, he pressed his proposals directly with the Arkansas legislature, even working the chamber in person, whereas the federal process—including the budget resolution, the potential for reconciliation, and the need for the two houses to resolve conflicts by conference committee—was all new to him. I took a few minutes to explain the budget process—it’s byzantine enough that most members of Congress don’t really understand it—and was impressed by how quickly he got it. Most important, he understood without any prompting from me the essential fact of any government spending plan: Budgets are not really about numbers; they are about priorities.
Clinton had been elected by an American people convinced that he was the best option for restoring the economic health of the country, and he knew that process would be centered on the ways the federal government raised and spent money. What would it invest in? How much compassion could the government extend to the poor without undermining the larger budget? How much of the tax burden could the rich afford to pay without stifling incentives to invest and grow? What actions could the government take to guide the private economy and encourage investors? Those decisions would shape Clinton’s legacy and the nation’s history, and he was grappling with them already, even before he had named his economic team or taken the oath of office.
Consummately political, Clinton also understood that even a perfect economic plan is useless if it remains a plan. He wanted to know what the deal might look like. Was bipartisan support possible? he asked.
Ah, I thought, there’s the $64,000 question. The politics of Washington were quietly in flux just at that moment, and Clinton was stepping into a changing world. There were many contributors to the increasingly noxious environment that would soon engulf the Clinton administration, but the man I regard as most responsible was Newt Gingrich. The congressman from Georgia arrived in Washington in 1979, not long after I did, but really made his debut in 1984, when he spied a loophole in the House’s rules for televising its proceedings. Those rules dictated that only the member speaking be shown on camera. Late on an evening when the chamber was almost empty and during the time reserved for special orders—an open period where members can speak on any subject—Gingrich launched a tirade against Democrats, accusing us of betraying the military by supporting cuts in defense spending, and daring us to respond. He knew, of course, that there was no one present to offer any such response, but he was playing to the camera and manipulating the rules—two characteristics that would come to define him. Tip O’Neill was incensed and made the decision to let the cameras pan back to show the empty chamber during special orders. Tip had called the bluff, but it only encouraged the Republicans allied with Gingrich to push harder.
Later that year, their ire turned on me. I was at that time still a member of the House Administration Committee, and our responsibilities included reviewing disputed elections to determine whom the House should seat. Frank McCloskey, a Democrat from Indiana running for reelection for the first time, finished neck-and-neck with his Republican challenger, Rick McIntyre, the beneficiary of Reagan’s coattails. Indiana’s secretary of state called it for McIntryre, but by less than fifty votes. That was close enough to warrant an investigation, and I headed it, joined by one Democrat, Bill Clay of Missouri, and one Republican, Bill Thomas of California. At first, things seemed to go pretty well. We agreed on rules for counting ballots, how to examine chads, how to discern a voter’s intent. (All this would become a national obsession in 2000, when the race between Al Gore and George Bush hung on the same questions, but it was new for us in 1984 and 1985.) Having agreed on rules, we then proceeded to count. In the end, we
determined that McCloskey had won by four votes. Although Thomas had agreed to the rules and process for the recount, he wasn’t prepared to accept the result. He screamed of improprieties, but the General Services Administration certified it. As I said at the time, I wish it had been a hundred votes, but we were stuck with the result.
Gingrich smelled the political possibilities of Democrats helping another Democrat to reelection in such a close race. Disregarding our work and the validation of the GSA, he led a walkout. For weeks there were bitter feelings, but those Republicans with whom I had worked closely in the past quietly drifted back, acknowledging that the count was what it was and that Republicans would have done the same if one of theirs had won by four votes. McCloskey returned and two years later stood for reelection again. To my relief, that time he won by more than a thousand votes, so we didn’t have to go through such a process again. In the meantime, Gingrich’s divisive tactics had scored another publicity point.
There are two other incidents worth mentioning in chronicling Gingrich’s rise at the expense of working relations in Washington. In 1987, he accused House Speaker Jim Wright of a list of low-rent ethics charges, and the House Ethics Committee assigned a special counsel to investigate. The case dragged on—special counsels have a way of eating up time and money—and Wright eventually quit. “I was worn out,” he told journalist and author Joe Klein.2 Who could blame him?
Finally, during the House banking scandal that broke in 1992, Gingrich insisted that the names of House members who had overdrawn their accounts be made public. He knew that once he demanded a vote on the matter, the rest of us would have to agree, and his stunt upended many relations in the chamber merely for the sake of attention and publicity. Incidentally, it turned out that my accounts were slightly askew—the bank had mistakenly charged my account twice for one withdrawal, so I was owed $2,500. Gingrich, by contrast, had overdrawn his account more than twenty times, including writing a bad check to the Internal Revenue Service.
