How Monica Changed Everything: The Deal It Undid Between Gingrich and Clinton
There was a brief moment, however, when the two leading political figures in America formed a secret pact to stop the slide into pointless partisanship and tackle one of the most contentious issues of our time: Social Security. Ironically, the two men behind the effort are often the ones blamed for the culture wars that polarized America in the 1990s – former House Speaker Newt Gingrich and President Bill Clinton. The story of their unlikely alliance, and its tragic unraveling, has never been told. Until now. In the course of writing a book about the two men I came across the notes of a secret White House meeting. The notes, along with interviews with many of the key players, reveals a hidden world where the two political protagonists were willing to put aside their partisan differences in a genuine effort to achieve meaningful reform.
Shortly after 7:00 pm on Monday, October 28, 1997, Gingrich, accompanied by his chief-of-staff Arnie Christenson, made the brief trip from his Capitol Hill office to the White House. To avoid being spotted by reporters, Gingrich approached by the South Lawn and came in the diplomatic entrance. Once inside the White House, the Speaker and his aide were quickly ushered into the elevator and taken to the Treaty Room on the second floor of the residence. The room had been the site of a number of important treaty signings over the years, including the 1963 Nuclear Test Ban Treaty. Clinton may have liked the symbolism: If old adversaries like the United States and the Soviet Union could put aside their differences, then certainly he and the Speaker could find some common ground for the future. Waiting to greet Gingrich were White House chief-of-staff Erskine Bowles, legislative director John Hilley, and the President.
The five men took their seats around a small coffee table as a photographer circled around recording the moment for the history books. It was appropriate that George P. A. Healy’s portrait The Peacemakers (1868), depicting Abraham Lincoln conferring with his military advisers at the conclusion of the Civil War, looked down on them. Over the past few years, the two adversaries had waged their own civil war that included a budget showdown that twice forced the federal government to close its doors. Through it all, however, the two men had managed to maintain some grudging respect for each other, as well as a mysterious personal chemistry that baffled those around them. The 1996 election, which returned both men to power, convinced them they needed to work together in order to secure their place in the history books. “They both knew that their legacies were tied to each other,” Bowles later reflected.
Clinton started the conversation by talking about his recent trip to South America, but the conversation soon strayed to the challenges of governing – a favorite theme for both men. Gingrich was first to raise directly the issue of cooperation, suggesting that he and the president use their work on North Atlantic Free Trade Agreement (NAFTA) and the historic balanced budget bill passed in August 1997 as models for the future. Before Clinton could respond, Gingrich was breaking down the possible areas of agreement into conceptual boxes. One box contained the issues over which they would continue to fight. A second included tactical questions such as appropriations on which they could cooperate. The third box was reserved for “a few big ticket items” they could work on together. Clinton nodded in agreement with each point before interrupting. “This is a great opportunity,” he said, “and we need to be prepared to take risks to do something that could be very significant.”
They both knew what was in that “third box” – an unprecedented effort to reform Social Security and Medicare. “We had solved the short term problem of the deficit,” recalled Bowles, “now it was time to address the long-term structural problems facing social security and Medicare.” Both men were ready to take on the political risk of tackling the infamous “third rail” of American politics. Clinton was looking for a bold initiative in his final years that would define his presidency, answer critics who claimed he had failed to make a lasting imprint on the office, and encourage historians to rank him among the nation’s “great” presidents. For his part, Gingrich was also thinking about how history would remember him. His idol was Henry Clay, the nineteenth century Whig Speaker of the House who used his influence to expand American power abroad and preserve the Union at home. Gingrich wanted to be remembered as a great statesman, not just as a conservative firebrand rebel and mastermind of the 1994 Republican takeover of Congress.
The actuarial steps needed to shore up Social Security and Medicare were straightforward and, with government coffers beginning at last to overflow with revenue, easier to achieve than at any time in the recent past. “We always knew that finding common ground on social security wasn’t terribly difficult from a policy standpoint,” reflected Bruce Reed, the president’s chief domestic policy advisor. “The policy differences were always the easiest to bridge.” There was a growing consensus on both sides of the aisle in favor of having Social Security tap into the stock market to increase the rate of return on retirement funds. However, difficult questions remained unanswered: Who would manage the money: individuals or the government? Would private accounts replace checks guaranteed by the government, or would they simply be an add-on to the existing system? Politics, not economics, presented the biggest obstacle. Any long-term solution to solving social security required increasing the age of eligibility and changing the formula used to calculate the annual cost of living increase (COLA) – two steps guaranteed to arouse powerful opposition from across the political spectrum.
Despite the odds, both men signaled their willingness to build a bipartisan coalition and to challenge the orthodoxy of their own parties. In private conversations with Gingrich and with Texas Republican Bill Archer, powerful head of the House Ways and Means Committee, the president promised to “provide political cover” for Democrats and Republicans by announcing his support for raising the minimum age required for social security and for reducing the COLA adjustments. The president was willing to oppose the leadership of his own party and support the Republican demand for private accounts. Although most Republicans planned to use the surplus for a massive tax cut, Gingrich privately accepted the administration’s position that the surplus should be used first to save social security “for all time,” with any remaining amount used for a tax break.
Bowles suggested the President and Speaker were now “partners.” Gingrich demurred. “I would prefer to say we are a coalition, not partners,” he said. It was an important distinction for Gingrich. “Partners are on the same team,” he reflected. “We were never going to be on the same team.” The two men were not looking to create a third party, but instead to forge a new center of gravity that would pull together moderates in both parties. “I understood that I would have to fight some of my old guard,” Gingrich recalled. “He understood that he would have to fight his hard left. Together we could shape about a 60 to 65 percent majority. I was happy for him to be a successful president. He was comfortable with us being a successful Republican Congress.”
Before the meeting ended, the two former adversaries had decided to put the past behind them and create a new center/right political coalition of moderate Republicans and conservative Democrats to push their ambitious overhaul of social security and Medicare through Congress. Both men were confident that their new “coalition” would rival the New Deal and the Great Society in terms of the significance of legislation enacted. “There is no question in my mind in October of 1997, that we were looking forward to a period where we would cooperate on a broad range of really big issues,” Gingrich recalled.
That brief moment of possibility ended, however, with public revelations four months later of Clinton’s affair with Monica Lewinsky -- an affair that started during the dark days of the first budget shutdown in 1995. The public never fully appreciated the damage done by the affair because they were unaware of the ambitious plans Clinton and Gingrich had set in motion in the months before the scandal was made public. Major newspapers destroyed forests trying to bring readers every detail of the affair and Washington pundits polluted the airwaves opining about its significance. But they all missed the point. “Monica changed everything,” Bowles reflected with a tone of both resignation and anger. The Lewinsky affair, he declared, “was one of the seminal events in American history.”
The affair destroyed a budding alliance between Clinton and Gingrich that could have, over time, altered the tone and substance of American politics. Instead, the affair, and the endless news coverage that it inspired, polarized the parties and destroyed any hope of forging a centrist coalition. Clinton who had a strained relationship with the liberal wing of his party throughout his presidency, was now dependent on them for his political survival. “All opportunities for accomplishment were killed once the story came out,” reflected a senior White House official. “If we cut a deal with the Republicans on social security there was every possibility that the Democrats, who were the only people defending him in the Congress against these charges, could easily get angry and abandon him.”
With conservatives in an uproar, Gingrich lost his political wiggle room and was forced to appease his right-wing base. He could have ended the impeachment crusade and forced his party to accept a censure resolution. But he allowed his anger to replace good judgment. When he failed to produce the promised results at the polls in the 1998 congressional midterm elections, party leaders pressed him to step down as Speaker. Gingrich, who has just won election by a wide margin, decided to resign his seat and leave electoral politics.
There was enough blame to go around for the lost opportunity. Through his indiscretions Clinton badly damaged his lifelong effort to blur the ideological differences between Democrats and Republicans. A centrist who preached reconciliation and moderation, Clinton left office having aroused the passions of conservatives and liberals. Clinton’s actions, and the impeachment process itself, placed values, not policy, at the center of public debate and discussion, and it left partisans on both sides feeling embattled and under assault. At the same time, Gingrich and other leading Republicans convinced themselves they could pursue a two-track policy: holding hearings to destroy Clinton’s presidency in one room on Capitol Hill while trying to build a coalition with him in another.
In retrospect, it seems clear that the Clinton years were a period of missed opportunities. A brief ten-year window separated the end of the Cold War and the dawn of the new age of global terror. During that unique period of peace and prosperity, the nation had an unprecedented chance to tackle important domestic issues. By the fall of 1997 a number of forces had come together to create a rare moment of bipartisanship – a moment that both Bill Clinton and Newt Gingrich hoped to grasp. Yet, less than a year later both men were fighting for their political lives as the nation engaged in a prolonged, partisan, and often personal debate over impeachment of the President. Instead of forging a new centrist coalition, Clinton and Gingrich inflamed opinion on both the left and right, exposed a wide cultural chasm in America, and made consensus unlikely for the foreseeable future.
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Per Fagereng - 6/3/2008
Maybe it's just as well that this deal was aborted. Clinton was ready to sell out working people who are retired and those who hope to retire while there's any life left.
Investing Social Security funds in the stock market amounts to a bailout of Wall Street, designed to pump more air into the bubble.
Cary Fraser - 6/2/2008
Was it really Monica?
Or was it the failure of both men to understand the fury of the radical right that George H.W. Bush had succeeded Reagan?
Clinton's 1992 and 1996 victories promised to further marginalize the contemporary radical right in American life In effect, the factions that had catapulted Goldwater to the fore in the Republican party in the 1960s were looking to accomplish what Nixon, Reagan, and George H. W. Bush, had been unable to deliver - the arrival of what Richard Hofstadter called "pseudo-conservatism" to the center of American life. It is particularly interesting that in his 1955 essay (The Pseudo-Conservative Revolt), Hofstadter closed with the following observation: "...in a populistic culture like ours, which seems to lack a responsible elite with moral and political autonomy, and in which it is possible to exploit the wildest currents of public sentiment for private purposes, it is at least conceivable that a highly-organized, vocal, active and well-financed minority could create a political climate in which the rational pursuit of our well-being and safety would become impossible."