The day after I returned, Senator Kennedy’s Labor and Human Resources Committee reported out a health-care reform bill. It was the first time legislation providing universal coverage had ever even made it out of a full congressional committee. One Republican, Jim Jeffords of Vermont, had voted for it. Jeffords encouraged me to keep reaching out to Republicans. He said that with a couple of amendments that wouldn’t gut the bill we could pick up a few more votes.
Our euphoria was short-lived. Two days later, Bob Dole, after having told me earlier that we would work out a compromise on the issue, announced that he would block any health-care legislation and make my program a major issue in the November congressional elections. A few days later, Newt Gingrich was quoted as saying the Republican strategy was to make health-care reform unpassable by voting against improving amendments. He was as good as his word. On June 30, the House Ways and Means Committee voted out a universal coverage bill without a single Republican vote. The Republican leaders had received a memorandum from William Kristol, former chief of staff to Vice President Dan Quayle, urging them to kill health-care reform. Kristol said the Republicans couldn’t afford to allow anything to pass; a success on health care would present a “serious political threat to the Republican Party,” while its demise would be a “monumental setback for the President.” At the end of May, at a Memorial Day retreat, the Republican congressional leaders decided to adopt Kristol’s position. I wasn’t surprised that Gingrich would follow Kristol’s hard line; his goal was to win the House and push the country to the right. Dole, on the other hand, was genuinely interested in health care and knew we needed to reform the system. But he was running for President. All he had to do was to hold forty-one of his fellow Republicans for a filibuster and we were sunk. On June 21, I transmitted to Congress a welfare reform bill designed by Donna Shalala, Bruce Reed, and their topflight policy people to make welfare “a second chance, not a way of life.” The bill was the product of months of consultations with every affected interest group, from governors to people on welfare. The legislation required able-bodied people to go to work after two years on welfare, during which time the government would provide education and training for them. If there was no privatesector job available, the welfare recipient would be required to take a government-subsidized one. Other provisions were designed to make sure recipients wouldn’t be worse off economically in the workforce than they had been on welfare, including more money for child-support enforcement, and continuing health and nutritional coverage for a transition period under Medicaid and the food stamp program. These changes, plus the large EITC tax cut for low-wage workers enacted in 1993, would be more than enough to make even low-wage jobs more attractive than welfare. Of course, if we passed health-care reform, lower-income workers would have permanent, not just temporary, health coverage, and welfare reform would be even more successful.
I also proposed to end the perverse incentive in the present system under which young teen mothers received more aid if they moved out of their homes than if they continued to live with their parents and stayed in school. And I urged Congress to toughen the child-support enforcement law, to force absent parents to come up with more of the startling $34 billion worth of court-ordered, but still unpaid, child support. Secretary Shalala had already granted several states “waivers” from existing federal rules to pursue many of these reforms, and they were producing results: the welfare rolls were already dropping sharply.
June was a big month for international affairs: I tightened sanctions on Haiti; Hillary and I hosted a state dinner for the emperor and empress of Japan, both highly intelligent, gentle people who spread goodwill for their country wherever they went; and I met with King Hussein of Jordan, and the presidents of Hungary, Slovakia, and Chile. By far the biggest foreign policy issue, however, was North Korea. As I mentioned earlier, North Korea had prevented inspections by the IAEA to make sure their spent fuel rods were not being reprocessed into plutonium for nuclear weapons. In March, when the inspections were stopped, I had pledged to seek UN sanctions against North Korea and refused to rule out military action. It got worse after that. In May, North Korea began to discharge fuel from a reactor in a way that prevented the inspectors from adequately monitoring its operation and determining what use was being made of the spent fuel.
President Carter called me on June 1 and said he would like to go to North Korea to try to resolve the problem. I sent Ambassador Bob Gallucci, who was handling the matter for us, down to Plains, Georgia, to brief Carter on the seriousness of the North Korean violations. He still wanted to go, and after consulting with Al Gore and my national security team, I decided it was worth trying. About three weeks earlier, I had received a sobering estimate of the staggering losses both sides would suffer if war broke out. I was in Europe for D-day, so Al Gore called Carter and told him that I had no objection to his going to North Korea as long as President Kim Il Sung understood that I would not agree to a suspension of the sanctions unless North Korea let the inspectors do their jobs, agreed to freeze its nuclear program, and committed to a new round of talks with the United States on building a non-nuclear future. On June 16, President Carter called from Pyongyang and then did a live interview on CNN saying that Kim would not expel the inspectors from its nuclear complex as long as good-faith efforts were made to resolve the differences over international inspections. Carter then said that because of this “very positive step,” our administration should ease its sanction efforts and start high-level negotiations with North Korea. I replied that if North Korea was prepared to freeze its nuclear program, we would return to talks, but it wasn’t clear to me that North Korea had agreed to that.
Based on previous experience, I was unwilling to trust North Korea and would leave the sanctions hanging until we received official confirmation of North Korea’s change in policy. Within a week we got it, when President Kim sent me a letter confirming what he had told Carter and accepting our other preconditions for talks. I thanked President Carter for his efforts and announced that North Korea had agreed to all our conditions, and that North and South Korea had agreed to discuss a possible meeting between their presidents. In return, I said that the United States was willing to start talks with North Korea in Geneva the following month, and that while they were taking place we would suspend our sanctions efforts.
At the end of June, I announced several staff changes that I hoped would better equip us to deal with our large legislative agenda and the elections just four months away. A few weeks earlier Mack McLarty had told me he thought it was time for him to change jobs. He had taken a lot of hits for the Travel Office and had endured countless press stories criticizing our decision-making process. Mack suggested that I appoint Leon Panetta chief of staff, because he had a good understanding of Congress and the press and would run a tight ship. When word got out about Mack, others also favored Leon for the job. Mack said he would like to try to build bridges to moderate Republicans and conservative Democrats in Congress, and to oversee our preparations for the Summit of the Americas, to be held in Miami in December.
I thought Mack had done a better job than he had gotten credit for, managing a much smaller White House with a much heavier workload, and playing a pivotal role in our victories on the economic plan and NAFTA. As Bob Rubin often said, Mack had established a collegial atmosphere within the White House and with the cabinet that many previous administrations never achieved. This environment had helped us to get a lot done, both in Congress and with the government agencies. It had also encouraged the kind of free and open debate that led to criticism of our decision-making process, but that, given the complexity and novelty of many of our challenges, led to better decisions. Moreover, I doubted there was much we could do, apart from reducing the leaks, to avoid the negative press coverage. Professor Thomas Patterson, an authority on the media’s role in elections, had recently published an important book, Out of Order, which helped me to better understand what was going on, and to take it less personally. Patterson’s thesis was that press coverage of presidential campaigns had become steadily more negative over the past twenty years or so, as the press had come to see itself as the “mediator” between candidates and the public, with the responsibility to tell the voters how they should view the candidates and what was wrong with them. In 1992, Bush, Perot, and I had all received more negative than positive coverage.