I.O.U.S.A - Addison Wiggin [102]
Q: What about President Bush 41? How involved was he in budgetary decisions?
Paul O ’ Neill: When Bush 41 became president, I wasn ’ t in the government, although he suggested that I ought to join his administration, which I declined to do. He did, however, make me the chairman of his Education Policy Advisory Committee, so I got to see him fairly frequently during his term. I would say his involvement in the budget was not like President Ford ’ s, but it was in some detail. One of the things I really liked about President Bush 41 is that when he saw that in his own judgment he ’ d made a mistake with the idea that he would never raise taxes, as in the famous “ Read my lips: no new taxes, ” he realized that was not the right position for public policy and had the courage to raise taxes. There was a great outcry when he did it, from people like the Chamber of Commerce, and I was so infuriated by their turning on him when he ’ d done the right public policy thing. I was then the CEO of ALCOA and I resigned ALCOA from the Chamber of Commerce in protest against their dissing of the president when he ’ d done the right public policy thing, whether they liked it or not.
And then I was out of government, although I still had involvement during the Clinton administration. I got to know Clinton pretty well when he was fi rst governor of Arkansas. I was the president of International Paper Company and we had big operations in Arkansas. He invited me in to talk with him about a lot of things, including global climate change and education policy and all the rest. And my sense is Bill Clinton was really deep into making budgetary decisions himself. I think maybe not as deeply involved as President Ford, but deeper than President Reagan for sure, and probably more detailed into things like welfare policy than most other presidents have ever been.
Bush 43 I found practically not involved in the detailed budget discussions. Early on, he asked me to serve on a committee with Dick Cheney and the then director of the Offi ce of Management c16.indd 208
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and Budget to review budgetary decisions, but in my experience he only saw the very tip of the iceberg and for sure he could never have done a detailed description of the budget. He could have done talking points, but if you asked him questions about retired offi cers pay, he would have drawn a blank. In his eyes, that ’ s not what presidents are for — they shouldn ’ t have to know that level of detail. I think it was a deliberate decision on his part not to be very involved in the detail, and to be what I would call a “ talking point president ” on these issues.
Q: When you took over at Treasury, how would you characterize the fi nancial health of the United States? Are you surprised at where we are today?
Paul O ’ Neill: When I moved into the Treasury as the 72nd secretary, what we inherited from the Clinton administration was an economy that had been rolling itself into a modest recession for a year and a half. By that time, the dot - com bubble had burst and the economy had slowed down, and we actually had some negative quarters that we didn ’ t really know about until Clinton was gone and Bush 43 was in charge. But on the fi scal policy front we were in a condition where we had, for the fi rst time in a long time, a budget that was in surplus.
I have to hasten to add that while it was in surplus, it was not in surplus on a federal funds basis. It was only in surplus because the trust funds were bringing in a lot of money and together, with federal funds and the trust funds, the Clinton administration was able to claim three years of budget surpluses, which we hadn ’ t seen since 1969. That was a year where we were in budget surplus with the use of the trust funds. The last year I think that we were actually in surplus on a federal funds basis, without using trust fund money, was in 1960, so we ’ d been at this now for 47 years of basically living beyond