The Story That Woodward Didn't Get

Bob Woodward is building a reputation as the Proust of policy wonks. His latest effort details, down to the last Frito, the Clinton Administration's 1993 battle of the budget. Woodward recounts the White House's struggle over whether to ditch Clinton's campaign promise to cut taxes for the middle class. He lays out how the President abandoned that pledge and spent precious political capital on tax hikes and deficit reduction.

The focus of The Agenda: Inside the Clinton White House focuses solely on process. This is pure sausage-making--a bunch of white guys staying up late, debating the merits of the gas tax vs. a broad-based energy tax. There is no analysis, no sense of a world beyond Pennsylvania Avenue. Woodward just recreates life in the abattoir.

The reporting is admirable. As always, Woodward, who interviewed more than 250 people, displaying his amazing ability to get his sources to say things they shouldn't. He accomplishes that in part by guaranteeing anonymity. But the complete lack of sourcing makes it difficult to judge his veracity.

Woodward kicks off with some pillow talk between the Clintons in the summer of 1991-Hillary urging Bill to run for President. It's an old journalist's trick: When you don't have real news, dazzle 'em with the details. Wow, he even got into bed with the President and the First Lady!

The book has three major flaws. The first is that it breaks little ground. We learn that the White House under Chief of Staff Thomas F. "Mack" McLarty III is a disorganized mess, that Bill Clinton has a volcanic temper, and that Hillary Rodham Clinton is a powerful force. We discover that Clinton's political advisers struggled, but failed, to keep his focus on the middle-class tax cut. And we learn that Alan Greenspan wanted the new Administration to cut the deficit. Any careful reader of the daily newspaper has known these things for 18 months.

The second problem is that Woodward does nothing to put the goings-on in the Clinton White House in historical context. Veterans of the Reagan Administration are chuckling aloud at Woodward's account of in-fighting among the Clintonites. To them, these disputes are schoolyard squabbles.

Policy disagreements? Nothing here compares with 1982, when top Treasury aides were secretly negotiating with Congress over a massive tax hike, even as the Gipper, in blissful ignorance, was extolling the previous year's tax cut.

Volcanic temper? As far as we know, Clinton isn't bugging the home phones of his own aides, as Richard M. Nixon, enraged about press leaks, did.

Ego battles among staffers? Woodward gives us nothing that compares with the behavior of Bush's budget director, Richard G. Darman, who set out to do no less than destroy all those who disagreed with him. Indeed, any longtime observer of the Washington scene will tell you that the Clintonites seem remarkably cohesive, at least compared with their predecessors.

But the biggest flaw is Woodward's theory of how Clinton came to abandon a middle-class tax cut in favor of deficit reduction. He postulates that Clinton became a deficit hawk largely because of pressure from Federal Reserve Board Chairman Greenspan. But that was only part of the story.

For all the attention given Greenspan's role in news stories about the book, The Agenda details a grand total of four meetings between Clinton and the Fed chairman, one of which took place well after passage of the deficit-reduction plan. And at each, Clinton heard little more than the speech Greenspan had been giving for years, filled with dire warnings about the risks of continued high deficits. Greenspan made no promises. There was no quid pro quo-at least none that Woodward discovers. Greenspan merely warned that real long-term rates would remain high unless the deficit was brought under control.

It's not as if Greenspan alone was pushing Clinton to tackle the deficit. The new President was sure to act from his own economic team, including senior adviser Robert E. Rubin, Treasury Secretary Lloyd M. Bentsen, and Budget Director Leon E. Panetta. At the same time, much of Congress and the political ghost of Ross Perot, were forming a powerful Greek chorus, chanting from the wings: "Cut the deficit."

Then there was the bond market. The Clintonites got their first whiff of that world even before the election--in October, 1992. The market finally figured out that the Democrats would probably win and, at the same time, got wind of rumor that Clinton would push an $80 billion stimulus plan. Not surprisingly, the market tanked--a real scare for the economic team-to-be.

In the end, though, Clinton cut the deficit because he had no choice. Even during the campaign, there was a sense of inevitability about the need to focus on budget-cutting. It took the Washington pundits months to figure this out, but the public had it nailed from the first. Voters never believed Clinton's promise to cut taxes, which the Democratic candidate spent the last weeks of his campaign backtracking on, anyway.

It wasn't because he didn't want to cut taxes. He did. But he knew that, like Bush, Reagan, and Carter before him, he would be defined in large part by the budget issue. He had to tackle the deficit in his first days, because if he did not, his entire Administration would have been haunted by the failure.

Panetta and Bentsen had been saying for years that the biggest danger of the deficit was not the short-term economic cost, but the way it crippled policymaking. And that would never have been more true than for Bill Clinton, government activist. Health care, welfare reform, trade: Each of these programs will cost money. Even today, Clinton is struggling to come up with ways to pay for them. Imagine what his life would be like if every time he raised one of those issues, half of the Democrats and all the Republicans on Capitol Hill started howling about the out-of-control deficit. He would become, like George Bush, a prisoner of the budget debate. As it is, the deficit is still more than $200 billion. Yet it is largely a nonissue, thanks to the tough choices Clinton made in his first days in office.

Woodward, the earnest stenographer, misses all this. But he does capture Clinton himself--always questioning, never certain, desperately seeking one last fact. Most of all, Woodward's Clinton is a man who can't abide making enemies, who always looks to find a middle ground.

The book also captures the White House's growing obsession with the bond market. In Woodward's telling, young staffers, many self-styled populists, found themselves suddenly became mesmerized by yield curves and basis points.

That fascination with interest rates persists. But circustances have changed. The budget debate took place in an environment of falling rates. Now, with the expansion well along, long rates have again headed back up-back to where they were when Clinton took office. So far, despite occasional bursts of frustration, the Clintonites grin and bear it. Greenspan's Fed raises rates, and Clinton's White House, which bet early and heavy on stimulus from monetary policy, hopes for the best. Clinton lived by the economy in 1992 and 1993. And he'll live or die by the economy in 1996.

Because he is interested only in process, Woodward misses a final, delicious irony. In his campaign, Clinton promised to cut taxes, hike spending, and stimulate the economy. Instead, he raised taxes by $250 billion over five years--and watched in amazement as the economy boomed, an outcome that not one adviser had predicted. If nothing else, Clinton's experience reinforces an iron law of politics. It is, indeed, better to be lucky than good.

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