My Life, page 93
The matter came to a head on Monday night, January 30. Mexico’s reserves were down to $2 billion, and the value of the peso had dropped another 10 percent during the day. That evening, Rubin and Summers came to the White House to see Leon Panetta and Sandy Berger, who was handling the issue for the National Security Council. In blunt terms, Rubin told them, “Mexico has about forty-eight hours to live.” Gingrich called to say he couldn’t pass the aid package for another two weeks, if at all. Dole had already said the same thing. They had tried, as had Tom Daschle and Dick Gephardt, but the opposition was too strong.
I returned to the White House from a fund-raiser at about 11 p.m. and went to Leon’s office to hear the grim message. Rubin and Summers briefly restated the consequences of a Mexican default, then said we needed “only” $20 billion in loan guarantees, not $25 billion, because International Monetary Fund director Michel Camdessus had put together almost $18 billion in aid that the IMF would extend if the United States acted; combined with smaller contributions from other countries and the World Bank, that brought the total aid package to just under $40 billion.
Though they favored going forward, Sandy Berger and Bob Rubin again pointed out the risks. A newly published poll in the Los Angeles Times said the American people opposed helping Mexico by 79 percent to 18 percent. I replied, “So a year from now, when we have another million illegal immigrants, we’re awash in drugs from Mexico, and lots of people on both sides of the Rio Grande are out of work, when they ask me, ‘Why didn’t you do something?’ what will I say? That there was a poll that said 80 percent of Americans were against it? This is something we have to do.” The meeting lasted about ten minutes.
The next day, January 31, we announced the aid package with money from the Exchange Stabilization Fund. The loan agreement was signed a couple of weeks later at the Treasury Building, to howls of protest in Congress and grumbles among our G-7 allies, who were upset that the IMF director had made the $18 billion commitment to Mexico, and to us, without their prior approval. The first money was released in March, after which we continued to make regular disbursements, even though things didn’t really get better in Mexico for several months. By the end of the year, however, investors had entered the Mexican markets again and foreign exchange reserves had begun to build up. Ernesto Zedillo had also instituted the reforms he had promised.
Though it was tough at first, the aid package worked. In 1982, when the Mexican economy collapsed, it had taken almost a decade for growth to return. This time, after a year of severe recession, the Mexican economy started to grow again. After 1982, it had taken seven years for Mexico to regain access to the capital markets. In 1995, it took only seven months. In January 1997, Mexico repaid its loan in full, with interest, more than three years ahead of schedule. Mexico had borrowed $10.5 billion of the $20 billion we made available, and it paid a total of $1.4 billion in interest, almost $600 million more than the money would have earned had it been invested in U.S. Treasury notes, as other Exchange Stabilization Fund monies were. The loan turned out to be not only good policy but also a good investment. New York Times columnist Tom Friedman called the Mexican loan guarantee “the least popular, least understood, but most important foreign policy decision of the Clinton Presidency.” He may have been right. As for popular opposition, 75 percent of the people had also opposed the Russian aid package; my decision to restore Aristide in Haiti was unpopular; and my subsequent actions in Bosnia and Kosovo met with initial popular resistance. Polls can be helpful in telling a President what the American people think, and which arguments may be most persuasive at a particular time, but they cannot dictate a decision that requires looking down the road and around the corner. The American people hire a President to do the right thing for our country over the long run. Helping Mexico was the right thing for America. It was the only sensible economic course, and by taking it, we proved ourselves to be, once again, a good neighbor.
On February 9, Helmut Kohl came to see me. He had just been reelected, and he confidently predicted that I would be as well. He told me we were living in turbulent times, but the end would bring me out all right. At the press conference after our meeting, Kohl paid a moving tribute to Senator Fulbright, who had died shortly after midnight at the age of eighty-nine. Kohl said he came from a generation who, when they were students, “wanted nothing more than to obtain a Fulbright scholarship,” and that, across the world, Fulbright’s name was associated “with openness, with friendship, and with people striving together.” At the time of his passing, more than 90,000 Americans and 120,000 students from other countries had been Fulbright scholars.
I had gone to Senator Fulbright’s home to visit him not long before he died. He had had a stroke and his speech was somewhat impaired, but his eyes were bright, his mind was working, and we had a good last visit. Fulbright would loom large in American history—as I said at his memorial service, “Always the teacher and always the student.”
On February 13, Laura Tyson and the other members of the Council of Economic Advisers, Joe Stiglitz and Martin Baily, gave me a copy of the latest Economic Report of the President. It highlighted our progress since 1993, as well as the persistent problems of income stagnation and inequality. I used the occasion to push the Middle-Class Bill of Rights and my proposal to increase the minimum wage by 90 cents over two years, from $4.25 to $5.15 an hour. The raise would benefit 10 million workers, adding $1,800 a year to their incomes. Half the increase was necessary just to get the minimum wage (after inflation) back to what it had been in 1991, the last time it was raised. The minimum wage was a favorite cause of most Democrats, but most Republicans opposed minimum wage increases, claiming that they cost jobs by increasing the cost of doing business. There was little evidentiary support for their position. Indeed, some young labor economists had recently found that a moderate minimum wage increase might lead to a modest increase—not decrease—in employment. I had recently seen a television interview with a minimum wage worker in a factory in southwest Virginia. When asked about rumors that the increase might cause her employer to lay off her and other co-workers and do more work with machines, the woman smiled and told the interviewer, “Honey, I’ll take my chances.”
In the fourth week of February, Hillary and I paid a two-day state visit to Canada, where we stayed at the American ambassador’s residence with Ambassador Jim and Janet Blanchard. Jim and I had become friends in the 1980s, when he was governor of Michigan. Canada is our largest trading partner and closest ally. We share the longest unguarded border in the world. In 1995, we were working together on Haiti, on helping Mexico, and on NATO, NAFTA, the Summit of the Americas, and APEC. While we had occasional disputes over trade in wheat and timber and over salmon-fishing rights, our friendship was broad and deep.
We spent a lot of time with Prime Minister Jean Chrétien and his wife, Aline. Chrétien would become one of my best friends among world leaders, a strong ally, confidant, and frequent golfing partner. I also spoke to the Canadian parliament, thanking them for our economic and security partnerships and the rich cultural contributions of Canadians to American life, including Oscar Peterson, my favorite jazz pianist; singer-songwriter Joni Mitchell, who wrote “Chelsea Morning”; and Yousuf Karsh, the great photographer who had become famous for his portrait of Churchill scowling after Karsh jerked the omnipresent cigar out of his hand, and who had photographed Hillary and me in less forbidding poses. March got off to a good start, at least from my point of view, when the Senate failed, by only one vote, to get the two-thirds majority necessary to pass the balanced budget amendment. Though the amendment was popular, virtually every economist thought it was a bad idea because it restricted the ability of the government to run deficits under appropriate circumstances during a recession or a national emergency. Before 1981, America had not had much of a deficit problem; only after twelve years of trickle-down economics had quadrupled the national debt did politicians begin to argue that they would never make responsible economic decisions unless forced to do so by a constitutional amendment. While the debate was going on, I urged the new Republican majority, who were pushing the amendment, to say exactly how they were going to balance the budget. I had produced a budget less than a month into my term; they had been in control of Congress for nearly two months and had still not presented one. They were finding it difficult to transform their campaign rhetoric into specific recommendations. Soon, the Republicans offered a taste of the budget to come by proposing a package of cuts, called rescissions, in the current year’s budget. The cuts they chose proved that the Democrats had been right on target in their criticism of the contract during the campaign. The GOP rescissions included the elimination of 15,000 AmeriCorps positions, 1.2 million summer jobs for young people, and $1.7 billion in education funds, including nearly half of our drug-prevention funds, at a time when drug use among young people was still rising. Worst of all, they wanted to cut the school lunch program and WIC, the nutrition program for women, infants, and children under five, which, until then, had always had strong support from both Republicans and Democrats. The White House and the Democrats had a field day fighting those cuts.
Another GOP proposal that met stiff resistance was its move to eliminate the Department of Education, which, like the school lunch program, had always enjoyed strong bipartisan support. When Senator Dole said the department had done more harm than good, I joked that he might be right, because for most of the time since its inception, the department had been under the control of Republican secretaries of education. By contrast, Dick Riley was doing far more good than harm. While pushing back on the Republican proposals, I was also promoting our agenda in ways that didn’t require congressional approval and demonstrated that I had gotten the message from the last election. In the middle of March, I announced a regulatory reform effort developed by Al Gore’s Reinventing Government project that focused on improving our environmental protection efforts through providing market incentives to the private sector, rather than imposing detailed regulations; the 25 percent reduction in paperwork requirements would save them 20 million work hours per year. The “Rego” effort was working. We had already reduced the federal workforce by more than 100,000 and eliminated 10,000 pages of federal personnel manuals; soon we would earn almost $8 billion by auctioning slices of the broadcast spectrum for the first time; and eventually we would scrap 16,000 pages of federal regulations with no harm to the public interest. All the Rego changes were developed according to a simple credo: protect people, not bureaucracy; promote results, not rules; get action, not rhetoric. Al Gore’s highly successful initiative confounded our adversaries, elated our allies, and escaped the notice of most of the public because it was neither sensational nor controversial. By my third St. Patrick’s Day as President, the occasion had grown from a celebration into an annual opportunity for the United States to advance the peace process in Northern Ireland. That year, I was giving the traditional Irish greeting, céad míle fáilte, “a hundred thousand welcomes,” to a new Irish prime minister, John Bruton, who was continuing the peace policy of his predecessor. At noon, I met Gerry Adams for the first time at the Capitol, as Newt Gingrich hosted his first St. Patrick’s Day Speaker’s luncheon. I had given Adams a second visa after Sinn Fein had agreed to discuss with the British government the IRA’s laying down of arms, and had invited him, along with John Hume and representatives of Northern Ireland’s other main political parties, both Unionist and Republican, to the St. Patrick’s Day reception at the White House that night.
When Adams showed up at the lunch, John Hume encouraged me to go over and shake hands with him, so I did. At the White House reception that night, the assembled crowd listened to a superb Irish tenor, Frank Patterson. Adams was having such a good time that he wound up singing a duet with Hume. All this may sound routine now, but at the time it represented a sea change in American policy, one the British government and many in our own State Department still opposed. Now I was consorting not only with John Hume, the champion of peaceful change, but with Gerry Adams, whom the British still considered a terrorist. Physically, Adams was a striking contrast to the gentle, slightly rumpled, professorial Hume. He was bearded, taller, younger, and leaner, hardened by his years on the edge of destruction. But Adams and Hume shared some important traits. Behind their glasses were eyes that revealed intelligence, conviction, and that uniquely Irish mixture of sadness and humor born of hopes often dashed but never abandoned. Against all odds, they both were trying to free their people from the shackles of the past. Before long, David Trimble, who led the largest Unionist party, would join them at the White House on St. Patrick’s Day and in the quest for peace.
On March 25, Hillary began her first extended overseas trip without me, a twelve-day visit to Pakistan, India, Nepal, Bangladesh, and Sri Lanka. She took Chelsea along on what would be an important effort for the United States and a grand personal odyssey for them both. While the rest of my family was far away, I traveled closer to home, going to Haiti to visit the troops, meet with President Aristide, exhort the people of Haiti to embrace a peaceful democratic future, and participate in the handover of authority from our multinational force to the United Nations. In six months, forces from thirty nations had worked together under American leadership to remove more than 30,000 weapons and explosive devices from the streets and train a permanent police force. They had ended repressive violence; reversed the outmigration of Haitians, who were now coming home; and protected democracy in our hemisphere. Now the United Nations mission of more than 6,000 military personnel, 900 police officers, and dozens of economic, political, and legal advisors would take over for eleven months, until the election and inauguration of a new president. The United States would play a part, but our force levels and expenses would drop, as thirty-two other nations stepped forward to participate. In 2004, after President Aristide resigned and flew into exile amidst renewed violence and strife, I thought back to what Hugh Shelton, the commander of the American forces, had told me: “The Haitians are good people and they deserve a chance.” Aristide certainly made mistakes and was often his own worst enemy, but the political opposition never really cooperated with him. Also, after the Republicans took over Congress in 1995, they were unwilling to give the financial assistance that might have made a difference.
Haiti will never develop into a stable democracy without more help from the United States. Still, our intervention saved lives and gave Haitians their first taste of the democracy they had voted for. Even with Aristide’s serious problems, the Haitians would have been far worse off under Cedras and his murderous coup. I remain glad that we gave Haiti a chance.
The Haitian intervention also provided strong evidence of the wisdom of multilateral responses in the world’s trouble spots. Nations working together, and through the UN, spread the responsibilities and costs of such operations, reduce resentment against the United States, and build invaluable habits of cooperation. In an increasingly interdependent world, we should work this way whenever we can. FORTY-THREE
I spent the first two and a half weeks of April meeting with world leaders. Prime Minister John Major, President Hosni Mubarak, and Prime Minister Benazir Bhutto of Pakistan and Prime Minister Tansu Ciller of Turkey, two intelligent, very modern women leaders of Muslim countries, came to see me. Meanwhile, Newt Gingrich gave a speech on his first hundred days as Speaker. To hear him tell it, you would think the Republicans had revolutionized America overnight, and in the process changed our form of government to a parliamentary system under which he, as prime minister, set the course for domestic policy, while I, as President, was restricted to handling foreign affairs. For the moment, the Republicans were dominating the news, based on the novelty of their control of Congress and their assertions that they were making big changes. Actually, they had enacted only three relatively minor parts of their contract, all of which I supported. The hard decisions were still ahead of them.
In a speech to the American Society of Newspaper Editors, I spelled out the parts of the contract I agreed with, on which I would seek compromise, and those I opposed and would veto. On April 14, four days after Senator Dole announced his candidacy for President, I quietly filed for reelection. On the eighteenth, I held a press conference and was asked more than twenty questions about a wide variety of topics, foreign and domestic. The next day they would all be forgotten and there would be only two words on the lips of every American: Oklahoma City.
In late morning I learned that a truck bomb had exploded outside the Alfred P. Murrah Federal Building in Oklahoma City, leaving the building a rubble and killing an unknown number of people. I immediately declared a state of emergency and sent an investigative team to the site. When the magnitude of the recovery effort became apparent, firefighters and other emergency workers came from all over the country to help Oklahoma City dig through the rubble in a desperate attempt to find any survivors.
America was riveted and heartbroken by the tragedy; it claimed the lives of 168 people, including nineteen children who were in the building’s day-care center when the bomb exploded. Most of the dead were federal employees who worked for the several agencies that had offices in the Murrah Building. Many people assumed that Islamic militants were responsible, but I cautioned against jumping to conclusions about the perpetrators’ identity.
