Chapter Twenty-two

WELFARE

Obscured by the partisan bluster and invective that flew between the White House and Capitol Hill in 1996 were some surprisingly cordial relationships. One of them was between Bill Clinton and Trent Lott, the new leader of the Senate Republicans. They understood each other. Although they were separated by ideology, their lives nonetheless had several points of overlap. Both were southerners. Both grew up in families headed by alcoholics and had an instinct in personal encounters to avoid conflict and find points of agreement. And both shared the same political consultant.

Dick Morris had been advising the Mississippi senator for years. Since 1995 he had been the broker for secret—and extraordinarily unusual—back-channel communications between Lott and Clinton, as they struggled to find a middle ground on the budget. These clandestine negotiations never went anywhere. Clinton liked Lott, but regarded him as a weak man. He was always suggesting in their private talks that deals could be struck, but then never delivered on his end of the bargain. Lott was not tough enough, Clinton complained, to force the conservative ideologues in the Republican caucus to march behind him.

On the evening of July 30, 1996, the two had a telephone conversation that had Clinton hissing in anger when he hung up the phone. The subject was welfare reform. A debate between Clinton and Republicans over how to overhaul the federal government’s aid to the poor had dragged on for nearly eighteen months. In the wake of the Republican takeover, Clinton had hoped that welfare reform might be a rare point of agreement between the White House and Congress. Republicans wanted radical changes in aid to the poor; so, too, did Clinton. One of his most arresting—and popular—slogans was 1992’s promise “to end welfare as we know it.” His proposal to impose time limits and work requirements on people receiving assistance was a signature item in his New Democrat agenda, and his most important substantive and emotional break from liberal orthodoxy. He was quite sincere about it. Sincerity, however, was not necessarily a commitment to action; while Democrats still controlled Congress, there were always good reasons not to push welfare reform too vigorously. The liberals who dominated the congressional caucus hated the idea. They assumed Clinton talked about welfare largely as a rhetorical sop to conservative white voters. It was shrewd politics, perhaps, but they believed to actually enact the ideas Clinton campaigned on would be a devastating hardship on the poor and an unconscionable capitulation to the right wing. Thus, welfare reform lay dormant until the Republicans wrested control of Congress. Suddenly it sprang fiercely back to life.

There was a big difference, though, between how Clinton conceived of welfare reform and how Newt Gingrich and his revolutionary warriors tried to enact it. Clinton believed that overhauling the welfare system, though it might save money over the long run as people moved off the dole, required lots of new money at the outset to help recipients with job training and child care. Republicans resisted this. Clinton believed that legal immigrants were just as entitled to welfare as citizens. Republicans insisted the opposite. These and other divides had twice in the preceding months led Clinton to veto bills labeled welfare reform, but he had been rueful about doing so. He urgently wanted to sign a welfare bill. Most Republicans, knowing the potency of welfare as a political wedge, were thrilled at the prospect that Clinton might veto a bill again. And so the issue slouched uncertainly through Congress that summer. It was obvious to Clinton that most Republicans were trying to send him the most objectionable bill possible. But he held out hope that some Republican voices of reason, including some in Lott’s Senate caucus, would push the process back toward consensus and send Clinton a measure he could enthusiastically approve. That hope died with Lott’s July 30 call. The bill that emerged from the conference committee had numerous bad provisions, Clinton believed, most of all one barring legal immigrants from aid. As the Republicans had the votes to pass it, the bill would be on the president’s desk within days.

Here was Washington at its worst, Clinton believed. “This is not about welfare,” Clinton said bitterly to an aide as he hung up the phone. “This is about screwing immigrants and screwing me.”

Republicans had indeed maneuvered Clinton exactly where they wanted him, into the kind of tight corner he hated: an either/or decision. He believed it was nearly always desirable to split differences and incorporate elements of different approaches into a new and improved composite. In this case, a crisis of definition was at hand. The legislation before him was complicated, but his choice was clear. He could sign a popular bill that contained some admirable provisions but several deeply offensive ones. Or he could veto it, paying an unknown political price and quite possibly forgoing forever the chance to make good on a central plank of his 1992 agenda. If he signed, he would thrill his main political adviser and a handful of New Democrat intellectuals on his policy team. But he would disappoint nearly all his other top advisers, and indeed stand in defiance of the mainstream of his own party. This time, there seemed to be no difference to be split.

By the summer of 1996, Dick Morris was becoming unhinged. His manner was increasingly frenetic, and in meetings he had become even more prone to extravagant overstatement. Surely he was overstating his case that July in a memo he gave to the president and his top aides at the weekly political meeting in the Yellow Oval Room of the White House political quarters. “Welfare veto would be a disaster,” the consultant warned, in the staccato prose style typical of his memos. With shrieking specificity, he said his polls showed that Clinton would soar to a lead of fifteen points over Bob Dole if he signed the bill, but drop to a deficit of three points if he vetoed it. Most of Clinton’s aides rolled their eyes at Morris. Clinton himself learned to take these pronouncements cum grano salis. Still, there was no avoiding the political implications. A veto would give Dole at least a chance to revive his moribund candidacy, just three months away from the general election. The political consequences, however, cut in more than one direction. The Democratic National Convention in Chicago was only three weeks away. Signing the bill would likely produce protests at a convention that was supposed to be a celebration of Clinton’s first term. The politics of welfare that summer were painfully complicated.

Those who believed Clinton’s mental abacus was calculating only the politics of welfare—and this indeed was the focus of most journalistic commentary—misread him. The choice before him was no less vexing for its moral and intellectual dimensions. Signing the legislation would be the most fundamental break in the way government delivered aid to the poor in sixty years. Though his critics doubted it, the long trajectory of Clinton’s involvement with welfare reform—he first began working on the issue in the 1980s—plainly suggested he was drawn to the idea as a matter of genuine principle. In any event, the current system was hard to defend. It had trapped many recipients in cycles of dependency and failure, robbing them of self-esteem and offering no clear path to self-improvement. Yet leaving the poor to their own devices, as he believed many Republicans were content to do, was likewise a moral failure. On purely substantive grounds, the bill the Republican majority had put before him was a close call: Was it better than the status quo?

This was the question on the table as Clinton, his vice president, several members of his cabinet, and his senior White House aides gathered in the Roosevelt Room on the morning of July 31. It was a Monday, and everyone was dressed for work except the president. He planned on taking most of the day off, and he arrived in casual slacks and a golf shirt. He gazed at his team and began the meeting with a simple question, “What should we do?”

Hanging over this meeting was an echoing might-have-been. By 1996, it was established wisdom in the White House that Clinton had made a grievous error in not aggressively advancing welfare reform as soon as he came to power in 1993. The president said so frequently in private; Panetta had said it publicly. In late 1994, just after the Republican sweep, The New Republic published a cover story about the Democrats’ failure to push welfare reform under the headline “They Blew It.”

It was true. If Clinton had promoted welfare reform back when Democrats still controlled Congress, he might have achieved a bill that would have changed the program more humanely, with more assistance to people making the transition off aid, and without revoking aid to immigrants. Even more, if he had made welfare reform his signature domestic initiative upon coming to power, instead of health care reform, there very possibly never would have been a Republican majority in Congress. By pursuing an idea with a bipartisan flavor, Clinton would have immunized himself against the accusation that he was a traditional liberal hiding behind a moderate pose—the charge that Newt Gingrich hurled with lethal aim in the 1994 elections.

Clinton sometimes tortured himself about the path not taken. The truth, however, is that it was never really a close call. In early 1993, as his economic team was urgently looking for ways to meet its targets for deficit reduction, Lloyd Bentsen had blithely sacrificed the money that budget planners had dedicated to implementing welfare reform. There had been no objection from Clinton. Moreover, no one in the White House supposed for a moment that Hillary Clinton would have countenanced giving welfare reform precedence over her health care initiative.

At the time, there was a prominent voice jeering Clinton’s priorities. Senator Daniel Patrick Moynihan, Democrat of New York, was a former Harvard professor who still dressed the part, with his bow ties and tweed suits. In the middle 1960s, Moynihan had been the author of a controversial government report warning of the welfare culture’s devastating effect on poor families. He had devoutly hoped Clinton would push welfare reform early in his administration. When Clinton did not do it, Moynihan vented his frustration one Sunday morning in 1994 on ABC’s This Week program. He accused Clinton of talking about welfare reform as a ploy to win over conservative white voters but lacking the fortitude to actually fix the system. Apparently, Moynihan sneered, Clinton regarded the issue as nothing more than “boob bait for Bubba.” Two years later Moynihan was still jeering Clinton, only now it was for being willing to consider a Republican version of welfare reform that the senator believed would be devastating for the poor. On the very morning Clinton’s team sat in the Roosevelt Room to deliberate, the papers quoted the New York senator as saying that passing this version of welfare reform would be “the most brutal act of social policy since Reconstruction.” Clinton had always wanted to like Moynihan. A president who regarded himself as a serious policy student supposed he would be on good terms with the man widely regarded as the most serious policy intellectual in public life. It was not meant to be. From the early days of the administration, Moynihan’s frequent taunting had left his relationship with Clinton just short of open warfare.

One person who viewed the deteriorating relations between the two men with special regret was Bruce Reed, the young policy aide who had helped draft Clinton’s presidential announcement speech nearly five years earlier. Reed was an Idaho native, Princeton alumnus, and former Rhodes scholar whose boyish appearance and cheerful demeanor made him seem younger than his thirty-five years. After the campaign, Reed had landed on Clinton’s domestic policy staff, where he was the White House’s main ambassador to the centrists aligned with the Democratic Leadership Council. Moynihan had been one of Reed’s early heroes, a brave voice who had risked liberal wrath by warning about a broken welfare system decades before such views came into fashion. It pained Reed to think that Moynihan, after being so prescient about the need for welfare reform, was now at odds with Clinton at the very moment reform was imminent. “You’re here to keep me honest,” Clinton flattered Reed the day of his presidential announcement in 1991. What he presumably meant was: It’s your job to keep me on a centrist path. Once Clinton was elected, however, Reed was cast to the margins of Clinton’s team, as more liberal people populated Clinton’s inner circle. Reed watched other young aides—most notably Stephanopoulos, whom Reed regarded as something of an opportunist—vault to celebrity. Worst of all, he watched Clinton neglect welfare reform and other parts of the New Democrat agenda.

Reed did not think, as some at the DLC suspected, that Clinton had never believed in the cause of welfare reform. He harbored few illusions about the complexity of Clinton’s motives and the inconstancy of his attention, but he believed his boss was ultimately committed to recasting his party around new and innovative premises.

In the summer of 1996, he was one of the few supporters of enacting welfare reform who could speak to the policy side of Clinton’s mind. Reed’s job was to serve as the president’s intellectual lifeline each time he was swept by new doubts. One of these occasions was when Hillary Clinton’s longtime friend Marian Wright Edelman of the Children’s Defense Fund wrote Clinton a long and impassioned letter warning about the calamitous effects welfare reform would have on poor children. At such moments, Reed would try to untangle the hyperbolic assertions of liberal critics, and remind him of the improvements (more money for child care, for instance) that the administration had managed to wrest from Republicans.

Reed also had a superb vantage point on the way Clinton merged the mind of a theorist with an understanding of practical effects. It was a combination made possible by the president’s experience as governor. Many liberals, for instance, were alarmed by the Republican plan to make federal welfare money to states a “block grant,” giving states wide flexibility to spend funds as they saw fit. Clinton was not especially alarmed. As a practical matter, the welfare benefit varied widely among states anyway, with some like Texas spending virtually none of their own funds and barely giving recipients subsistence support. Other states, like New York, funded generous benefits. For all intents and purposes, welfare was already a block grant program, Clinton noted. By contrast, when Republicans, still looking for ways to put Clinton in a political box, proposed making both welfare and Medicaid programs for poor people into block grant programs, Clinton resisted vehemently. “If you do that,” he said, “what will happen is the nursing home lobby in every state legislature will make sure all the Medicaid money goes to old folks in nursing homes, and poor kids will end up getting screwed.” Clinton impressed Reed at multiple levels: He knew more than any congressman about the real-world impact of these programs, and at the end of the day he really did care what happened to some poor kids somewhere. He could see real faces, and real consequences, behind the clichés of Washington debate.

While Reed held up the policy side of the pro–welfare reform argument, Morris had the responsibility of offering the political appraisals, which he did with relentless predictability. All summer, the consultant had been issuing cocksure predictions to anyone who would listen that Clinton would of course sign the bill. In recent days, though, Morris had panicked that perhaps he did not know Clinton’s mind as well as he supposed. On the day Clinton was set to announce his decision, Morris was close to tears when he called in by speakerphone to Leon Panetta’s morning staff meeting, warning of the dire consequences of a veto. Reed, too, was alert to politics. One day in July he told Clinton that if the president rejected the bill he would probably never get a chance to sign a Democratic welfare bill, since many moderates who actually backed welfare reform would doubtless get swamped in the coming elections by voter backlash at the veto. “That’s the best argument I’ve heard so far,” Clinton said.

On the morning before Clinton began his cabinet meeting, Panetta asked for a show of hands at the White House senior staff meeting about what the president should do. The bill would be voted on in Congress later that day, and Democrats on Capitol Hill were urgently pleading for a clear sign of Clinton’s intentions. Many politically vulnerable congressmen who disliked the Republican welfare bill did not want to stick their necks on the line with a “no” vote if Clinton was going to sign it anyway. Nearly every hand at Panetta’s meeting rose to say Clinton should veto the bill. A short time later many of these people braced themselves in the Roosevelt Room to make their case to Clinton directly.

Often in the Clinton White House, debates like this were roiling affairs. Profanities flew, and people exaggerated their arguments for maximum effect. Not this time. It was as if all of them, recognizing the momentous nature of a choice that belonged to the president alone, chose to tone down their appeals. Clinton began by telling the group that he was not especially worried about the politics. He was pretty sure he could successfully argue the case with voters either way. Then, quietly, he posed the question again: What should we do?

Health and Human Services Secretary Donna Shalala argued vehemently against the bill. So did Robert Reich, the labor secretary, and Harold Ickes, the deputy chief of staff. Treasury Secretary Robert Rubin was the hero of Wall Street capitalists, few of whom knew that his social views were quite liberal. “Signing would be safer,” he said, then added, “I wouldn’t sign it.” Housing Secretary Henry Cisneros, a Clinton favorite, concluded, “My head says yes, my heart says no.” Stephanopoulos said that Democrats in Congress would be undercut by Clinton signing a Republican bill. Panetta was particularly impassioned. While in Congress, he had authored many provisions of current welfare law, which Clinton would be dismantling. “It is hard for me to be objective as the son of immigrants,” he said. “I think you should veto this bill.”

There were a few voices arguing for signing. Commerce Secretary Mickey Kantor was one, as was White House aide Rahm Emanuel. There were also some great unknowns. When Clinton pressed Al Gore on what he should do, he demurred, mumbling something about how the politics of the issue were complicated. It seemed that he was eager not to pressure Clinton, particularly not in a large meeting.

The most influential adviser was absent from the meeting entirely. Since the health care debacle, Hillary Clinton typically did not appear at White House deliberations like this one. No one doubted that the views of the first lady, a longtime policy advocate for poor children, were being heard. Yet no one was quite certain what those views were. Her staff, a group of mostly liberal women who were extraordinarily loyal to her, believed she was pushing Clinton to take a harder line against the Republicans. In her memoir, she describes the warnings she had given her husband before he made his decision to veto the first bill. She would speak out publicly against any bill that did not preserve Medicaid as a federal guarantee and include child-care subsidies to people going off welfare. These were his misgivings, too, of course, but the message she was sending was striking: Don’t even think about signing. However, the latest bill—despite Clinton’s complaints about Republican intransigence—had indeed addressed many of the administration’s complaints. Hillary Clinton’s aides and friends believed that privately she was keeping up the pressure on her husband, but it became obvious that her own view was softening. When Donna Shalala spoke to her about how bad the welfare bill was, assuming they were of one mind, the first lady responded, “The politics of this are really tough.” The message was unmistakable: The time for fighting is over.

During the Roosevelt Room meeting, Clinton was subdued, asking questions but not speaking much. For those who knew his style well, there were clear hints of which way he was heading. The first was that he was being ostentatiously solicitous of Ickes, a fiery liberal. When Emanuel saw this, he slipped a note to Stephanopoulos: He’s signing the bill. Indeed, Clinton nodded his head sympathetically as Reed laid out the case for passage. Clinton, Reed argued, had promised welfare reform, and this was his best chance to get it. The provisions eliminating aid for immigrants—a way of reducing the cost of welfare—were unquestionably offensive, Reed acknowledged. The right approach, he said, was for Clinton to say this even as he signed the bill, with a promise to reverse them later. On the basic idea of welfare reform—requiring time limits and work—Republicans had come close to delivering what Clinton campaigned on. The president should sign the bill.

Now it was Clinton’s turn to speak. “This is a decent welfare bill wrapped in a sack of shit,” he noted. Then, after two hours, the meeting broke up, with still nothing definitive from the president about what he planned to do.

A new and smaller meeting continued in the Oval Office. Gore, Panetta, and Reed were summoned for more discussion. Clinton pressed Gore again for his recommendation, and this time, in the smaller setting, he gave it. “You probably won’t get another chance to do this,” he said. “If you don’t sign, the issue will just fade away and it will be a missed opportunity.”

Panetta sent word to Capitol Hill, where House Democrats had kept an open line into the cloakroom waiting for a sign from Clinton, that Clinton planned to sign the bill. Then Clinton put on a business suit and went to the White House briefing room to tell reporters the news himself. Despite what he called “serious flaws,” ones he pledged to remedy after the election, Clinton said he was ready to enact welfare reform. “A long time ago I concluded that the current welfare system undermines the basic values of work, responsibility, and family, trapping generation after generation in dependency and hurting the very people it was designed to help,” he announced. “Today we have an historic opportunity to make welfare what it was meant to be, a second chance, not a way of life.”

A years-long policy odyssey was over. His hope, Clinton said repeatedly in the days ahead, was that now the issue could move away from the old emotional arguments—conservatives complaining about welfare queens and saying the poor had only themselves to blame—to a more productive debate about the responsibility of everyone to help the poor.

Before hope, however, came a final flash of self-doubt and recriminations. Not long after his public announcement, Clinton called Morris. “I signed that bill because I trusted you,” he said sullenly. He was equally short with people on the other side. Soon after his press briefing, Clinton was again in play clothes, ready to head off to the golf course during his day off. Stephanopoulos delicately suggested that the president’s going golfing on the day he ended a six-decade federal guarantee of aid to the poor might be seen as bad symbolism. Clinton turned on him: “You want me to wear a hair shirt, don’t you?”

This was his way of venting the accumulated pressures of a draining debate. It would be years, Clinton knew, before one could be sure whether this experiment was working. In the short term, though, the results were quick to arrive. Clinton’s polling numbers did indeed rise, just as Morris said they would (if not quite as spectacularly). Then, weeks later, three of his senior appointees at the Health and Human Services Department publicly submitted their resignations. One of them was Peter Edelman, the husband of Marian Wright Edelman, and a longtime friend. With his signature Clinton had proven that he was indeed an authentic New Democrat, ready to break with old liberalism, even at personal cost.