(3 of 6)
As head of the Clinton transition's economic planning group, Reich became responsible for putting it all together for the President-elect at Blair House. "By definition, the 'natural effects' stuff was out of our control, so laying that much on him was easy," says one of the Blair House participants. "The question beforehand was how to tell him that some of the cost estimates and revenue projections in PPF were, to put it mildly, unrealistic. Clinton has a fierce temper -- you don't ever want to be on its receiving end -- and he was convinced the PPF numbers were airtight. So we rehearsed what to say and scripted around a bit in the hope of avoiding an outburst."
The Blair House session was held in a first-floor conference room dominated by a portrait of Franklin Roosevelt. At least one of Clinton's aides noted the irony: "Here it was Pearl Harbor Day, and we were dropping an economic bombshell on the boss under a painting of the Depression President." To minimize the chances of Clinton's insisting on a line-by-line reassessment of his plan's assumptions, a chart titled Budget Deficit Forecasts Under PPF Policies was, according to one Clinton aide, "rounded off in a conelike fashion and rendered approximate." It was a fool's errand. Clinton stared at the chart, pointed to the cone that represented his advisers' estimate that the numbers were off by at least $24 billion (and perhaps much more) and said, "What's this?" In a nanosecond, an old debate reopened over two items Clinton is counting on to cut the deficit $67 billion over four years. The first involves the President-elect's proposal to recapture $45 billion (over four years) in tax receipts he believes is owed by foreign corporations doing business in the U.S. Among those who have studied this problem seriously, Clinton is about the only person left who still thinks such a windfall is possible. "Ain't no way," says Panetta. "Maybe we'll get $3 billion a year -- if we're lucky."
"I know what everyone else thinks," says the President-elect. "But I'm going to push for it, and I think we can pull it off."
CLINTON'S AIDES ALSO TRIED DISPUTING THE PROposal's claim that unspecified "administrative savings" can yield $22 billion over four years. They were cut short. Clinton is unimpressed by his predecessors' failed attempts to swipe at waste, fraud and abuse. "I told my people I'd force those savings simply by cutting agency budgets by 3% a year," Clinton says. "I did the same kind of thing in Arkansas. There's a lot of flab, believe me."
) As Clinton dug in, his aides folded their tents. "We didn't talk about the other softness," says one of the Blair House briefers. "We weren't getting anywhere, and Clinton was beginning to turn the bad news around." In fact, as an incurable optimist, Clinton actually became exhilarated. He acknowledged that his aides' report made their collective challenge more difficult, but, says a Blair House participant, "he clearly relished the chance to use the news to help teach people to appreciate the severe structural problems of the economy, the need to sacrifice even if the short-term situation improves."