Newt Gingrich is in the midst of the latest of the many metamorphoses that have marked his controversial career. After surviving a palace revolt that nearly cost him his leadership post last July, the House Speaker has ended a self-described period of introspection. His aim now: to reassert his role as the GOP's chief idea merchant and preserve the party's slim House majority this fall while presenting himself as a kinder, more moderate leader. "A year ago, the question about Newt was: `Will he survive the week?"' says former Reagan Chief of Staff Kenneth M. Duberstein. "The question now is: `Will he run for President?"'
Gingrich has more immediate concerns. To save the House from a determined Democratic charge, he has adopted a frenetic fund-raising schedule that has pulled in more than $40 million since January '97. Gingrich also aims to retool his party's platform for '98 and beyond. He's urging the GOP to rally around four goals: capping the total state, federal, and local tax burden at 25%, fixing Social Security, improving education with incentives for teacher quality and school choice, and intensifying the war on drugs.
Gingrich's agenda shows how much he has evolved in three years. After continually being clobbered by Democrats for appearing hostile to kids and seniors, the new Newt feels compelled to offer new policies on such issues. And by focusing on a lighter tax bill for all, he's trying to insulate the GOP from charges of pandering to the rich.
How is Newt's new act playing? He has a way to go before he's considered cuddly. Since the failed coup, his Harris Poll favorable rating has gone from a measly 23% to a so-so 36%. Only someone as self-assured as Gingrich would consider that enough to daydream about the White House. "Newt's a polarizing politician," says GOP adviser Wayne Berman. "But he knows that polarizing politicians, such as Nixon and Reagan, can win if they lay the groundwork."
On Mar. 25, Gingrich sat down with Washington bureau chief Lee Walczak and correspondent Richard S. Dunham to discuss his initiatives--including his Presidential plans.
Note: This an extended, online-only version of the interview that appeared in the Apr. 6, 1998, issue of Business Week.
Q: President Clinton has coopted core GOP issues such as a balanced budget and welfare reform. Are there any big new ideas for Republicans to push?
A: I've been describing four Goals for a Generation, which I think are the natural follow-on to the Contract With America. I expect Clinton to co-opt as much of them as his Left will permit. But that is fine. That is how the American constitutional system operates.
The first is a drug-free country with a dramatic decline in crime. The second is to have a world-class education and learning system, with education being traditional and learning being Information Age-based. The third is to use the [budget] surpluses to guarantee Social Security for our parents and to have a better retirement plan for the Baby Boomers and their children. The fourth is to apply Peter Drucker and Edwards Deming and the information-systems revolution to downsize, modernize, prioritize, and privatize the government so we reduce the tax burden from 38%, on average, to 25%. That's state, federal, and local [taxes combined]. Those four goals are enormous.
Q: Any other key Republican issues for '98 and beyond?
A: You then have what I would call two building blocks, which are national security, where we need a dramatic overhaul, and science and research.
Clinton has been presiding over a hollowing-out of the American military. And second, newly emphasizing science and research as the base of health, the environment, jobs, and national security. Those two building blocks are the foundation stones of the Information Age. I think you have a very decisive platform for Republicans, not just for '98 but for 2000.
Q: Don't polls show that tax cuts are far from most Americans' minds right now?
A: First of all, if you ask the average American, in peacetime in a free society, if you work all of Monday and half of Tuesday for the government, should you be allowed to work the rest of the week for yourself, the answer would be yes. Readers Digest has said for over 40 years that, overwhelmingly, Americans believe 25% is the most you should be required to pay, not the least.
I'm creating a vision-level goal here. I'd be glad to have Al Gore run [for President] as the higher-tax, bigger-government, please-pay-for-more-bureaucrats candidate. That's a clear choice.
Furthermore, if you talk about Drucker and Deming and the Information Age, this [present-day] government is so obsolete. Gore basically has reinvented 19th century bureaucracy. So that becomes a joke by 2000.
Q: Do you favor a flat tax or the rival plan for a national consumption levy?
A: Let me be straight about this. No Republican should pick one of those two before 2001. Because liberals will pick every defect in whichever one you choose and beat your brains out...
You need a Republican President to look at both choices, to look at the transition rules. I have a team working on transition rules, so that in February, 2001, the Republican President can pick either one, and then you have a President explaining it and advocating it, and people can understand the up-side.
If you get caught in a political year, where -- given the levels to which Democrats will distort anything -- if you give them a target as big and fat and juicy as a gigantic tax change, they will have every person in the country scared to death about the downside.
Q: You agree with President Clinton that Congress should refrain from spending the budget surplus until it reforms Social Security. What's your plan?
A: I've been very proud of what the President's done so far. He and I have been talking about it since last December. We've been coordinating. And I think he's been making the right steps. We talk about it as recently as the Gridiron [Dinner on Mar. 21].
I believe there are three stages in dramatically creating a personal, modern Social Security system for the Information Age and guaranteeing for our parents that they get all of their Social Security plus the cost-of-living increase so that they never have to worry again.
Stage one is to create a Social Security Plus account that takes 80% of the surplus, turns it into bonus, pays it out on a pro-rata basis to the FICA taxpayers, [and] creates 130 million investment accounts that are Social Security Plus accounts. It is a very bold step toward creating the systems architecture for a modern personal system, and there are no risks to senior citizens. So there is no reason for AARP or anyone else to oppose it...
Second, you need to have a national commission on retirement. It's the first time we'll have an Internet-based commission, so that every American can type in who you are, what your age is, what your income is -- look at 30 different permutations and say, wow, I like plan 12.
So you really do have the opposite of the Clinton health-care model, which was 500 experts in a secret, illegal meeting, springing on the country some gimmick that couldn't be sold. We want to do the opposite. We want to consult the nation and then have them help us write the plan.
Phase three, maybe by early 1999, if President Clinton will cooperate, we'll actually pass and create a modern, personal Social Security system with probably a 20-to-25 year transition. My two daughters, who are 30 and 34, will be vastly better off than the current system. I'm 54, I'll be somewhat better off. And my mom and mother-in-law will be totally safe and secure.
Q: Many business leaders think it's irresponsible for the House to hold up a funding bill for the International Monetary Fund over abortion restrictions. Doesn't this kind of single-issue brinksmanship pose a threat to the economy -- and your own credibility?
A: My first question to them: Why doesn't it represent that for Bill Clinton? Why is that Bill Clinton can say, no IMF money because I have to support $3 million in tax money to organizations to lobby in favor of abortion overseas? Somehow, that doesn't make him an extremist.
Now, he is Commander-in-Chief. And if the Commander-in-Chief certifies that $3 million [in international family planning funds] is more important than IMF, U.N., and State Dept. [funding] -- that's what he's said, that he'll veto the bill over that $3 million -- why is it that we, the legislative branch, doing what the Constitution says we should do, somehow get all the blame? So I say to all of my business friends: Go talk to the President.
Q: Bottom line: Are we going to work this out?
A: I don't know. The President is so afraid of the danger of impeachment. He is so eager to pay off his Left that I don't know that he can afford to do anything that's rational on this issue.
Q: You're a free-trader, but these days there seem to be fewer and fewer House Republicans who think that way. Are Republicans losing their enthusiasm for free trade?
A: I'm very puzzled by that charge. There is a mythology out there. I think it comes back to Pat Buchanan's ['96] campaign. We had 165 votes out of 228 for fast-track [Presidential trade-negotiating authority]. That was a higher percentage than we had for NAFTA. This is a very international, world-market party. We have given Clinton a higher percentage of yes votes on foreign aid than we gave Reagan or Bush.
Every time the Clinton Administration is weak, they yell the word Congress. We offered last fall to pass U.N. and IMF money, and they turned us down. We're doing the heavy lifting. We're doing our job.
Q: Is there merit to the Administration's aggressive antitrust push?
A: What's happened is that all of the prosecutorial energy in the Justice Dept. has been put into one narrow zone. I had breakfast with [Microsoft CEO] Bill Gates about two years ago and he said to me, "You know, I'm either the next monopoly or I'm bankrupt. If you think about IBM, AT&T, and General Motors, I'm not certain that an 1890 nation-state model based on natural monopolies -- railroads, pipelines -- naturally applies.
I'm for competition and I'm for everybody being tested all the time. On the other hand, the experience over the past 25 years, in your own [magazine] business, is [to say] "Look and Collier's magazine are dying," and there are today more magazine titles than ever in American history.
Q: So what should the feds do about corporate giantism?
A: They should measure it against the world market, they should not measure it against nation-states. You have to get to a certain size just to compete in the world. If you do, why would you punish Americans for being able to compete?
Q: Will Congress approve a tobacco settlement this year?
A: I am certain there will be anti-teen smoking legislation. I am not certain there will be tobacco legislation in the broader sense. I am very dubious about the settlement. If you are not going to protect DuPont, which makes heart-valve material, why are protecting the people who try to addict 14-year olds?
And why are you setting the standard that you go to a lawsuit, have your lawyer try to cut a deal, come to Congress and have us sanctify it? I'm just very dubious. We'll certainly try to cap [settlements to] trial lawyers, and go with a minimum wage for trial lawyers at, say, $150 an hour. I want to see the President veto that.
Q: But aren't Republicans and Democrats counting on the settlement's proposed $165 billion in industry payments?
A: I'm counting on it for a tax cut. I don't want any net increase in the size of government.
Q: So that pile of money won't drive a settlement to passage?
A: Not if you have a Republican Party that wants to return the money back home. Every liberal saw this as a backdoor tax increase.
Q: GOP hardliners, noting your many deals with Bill Clinton, now attack you as "tax collector of the Nanny State." Does that sting a little?
A: They must have been talking about [Senate Majority Leader] Trent Lott. You get used to it. You have the same reaction that Lincoln did. You learn that your friends have very high standards and what you've got to do is listen to them carefully and do what you think is best -- and not worry about it.
Q: The Right says you're compromising too much. The Left says you're doing too little. Your response?
A: [House Minority Leader Dick] Gephardt runs around and says we're a Do-Nothing Congress. We reformed welfare and telecommunications in '96. We balanced the budget, cut taxes, and saved Medicare in '97. We're now going to create a salvation of Social Security beginning this year. I think for most Americans, that's big. That comes to a $650 billion tax cut over the next 10 years.
Q: Should Republicans be nervous about holding onto the House in November?
A: The average second-term off-year loss for the incumbent White House party is 47 seats. The record in the 20th century is minus six. We will be in control after this election. We will gain between 15 and 40 seats. I'm not worried about it.
Q: Some of your advisers think you're laying the groundwork for a Presidential campaign. What would make you run?
A: [Smiling] Well, one is if I was drafted for the nomination. That'd be ideal. Hasn't happened in modern times. Being a Georgian, I can't issue a Sherman-like statement. I will not think about this topic until late '99.
I think about being Speaker of the House, providing leadership, communicating my four Goals for a Generation, and reelecting Republicans. So far, that seems to be keeping me pretty busy. Plus, I've got a two-week book tour coming up, and that keeps me busy.
Q: In polls, most Americans say the President's sexual conduct isn't grounds for impeachment. Yet you're preparing for impeachment proceedings. Could this backfire?
A: No. We're not going to do anything unless [Independent Counsel Kenneth] Starr does something. If Starr does something, we're going to look at it. I suspect he'll deliver a bunch of evidence to the country. Then we'll look at the evidence. If it is relevant to whether or not the rule of law has been violated, we'll act. If it isn't, we won't.