TN: They'll pick up with, okay. So, you're with Clinton. You're telling Clinton about Dick Neustadt's work on swine flu. PO: And when I was done with my monologue telling the president his business, he
said, "You know what, Paul? I was reading it last night, and you know what? I believe
him." He had actually somehow discovered this book on president, what was really
about presidential decision making, and he had made his own connection to how to discount scientific advice when you're making presidential decisions. I thought
it was, you know, it was typical of a Bill Clinton that I knew, but he was also a
really great, accomplished politician. He, he invited me in to the Roosevelt
Room when he and Hillary Clinton were about to launch their health care
proposal. It was 1,354 pages long by the time they
got the whole thing assembled, and I was still enough of a policy wonk that I'd read
the whole thing, you know. So, they invited me into the Roosevelt Room just before
the launch to get my opinion about it. I've forgotten who else was there. The,
the then-chairman of DuPont, his name was Ed, I've forgotten his last name,
was there, and there, but there were just a handful of people, though. Hillary came in
first and sat down next to me on the side of the table across from the
Roosevelt on the horse, and I said to her, "How are you?" and she said, "You know, I'm okay, Paul." She said, "You know, this is really hard, because I'm trying to work on these
important policy issues, and the media wants to write stuff about my hair and
my clothes, and it's really awful to have to deal with all of that." You know, I must
tell you, I really sympathize with that, because I've always thought she was a
serious public policy person, and it was awful that she had to put up with all that
stuff like it was overwhelming the policy work she was doing,
but then the Clinton, Clinton came rushing in, and, I don't know, he may have had a couple of other people with him. He sat, he sat across the table, and
basically said, "Well, what do you think?" and I said, "You know, I've been sitting up
there in Pittsburgh watching this whole thing unfold, and I got to tell you,
I think this whole thing is a disaster, because the longer you've worked at this
with Ira Magaziner, the more you've sucked yourself into an impossible morass
assigning more and more responsibility to the departments and the agencies of
government, which I think is exactly the wrong thing to do. And as an
illustration of that, you've created a new responsibility for the Secretary of HHS
to decide personally, obviously, that person won't do this, but for the
department to decide how many residencies should be allocated to each university
in the country for each specialty as though you somehow had the magic formula
to figure that out, you know. It's just crazy. This is never going to succeed," and,
you know, I was unsparing. I said, I think they would tell you today, that's what I
said. No different in tone, and no different in, you know, feeling this is
really a shame, because the country was ready for fundamental reform of what we
do in health and medical care, which I believed then we needed to do, and believe
now we needed to do, but, you know, we left, and they were gracious. They didn't say,
you know, we hope you'll never come again, or anything like that. And so, this is a day
when the business roundtable was having a meeting in Washington. So, I went back
over to the Hyatt Park, Park Hyatt Hotel on 23rd and M in Washington,
went downstairs to the big ballroom, and it was a night when the President was
coming to talk to the business roundtable groups. So, I had a seat in the
front row. The President comes in with his entourage. He gets up on the little riser,
and he makes remarks to the group, and I don't know what it was, someone else, I
guess the head of the business roundtable, was after the President had
spoken to make remarks to the whole group, and President stayed, President
Clinton stayed for that. He came over and stood by me, and we're all standing. He
comes over and stands by me, and he says out of the side of his mouth, "I really
appreciate your coming in and talk to me, because I always know you'll tell me the
truth." You know, he's a politician to the end. He may have hated what I said to
him, but, you know, he, he, he just sidled up to me, and, and gave me that little aside,
you know, and I have to tell you, I wanted to think it was genuine, and I think
maybe it was genuine. Kind of a footnote on, in my engagement with President
Clinton: on the 19th of January, this is 2000, it's four o'clock in the afternoon,
I'm in the office of the Speaker of the House on Capitol Hill. The secretary
comes in and says, "The President wants to speak to you," and I said, "You mean the
President-elect?" and she said, "No, President Clinton wants to speak to you."
So, I said, "Okay." So, I, this is on the day before President Bush takes office. So, I
went to the phone, and President Clinton said, "I just wanted you to know I'm, I'm
really so happy that you're gonna come back to the government." You know, it was
something he didn't need to do. You know, it was something I really appreciated
that he would do, and it was a nice entry point back into government to have the
departing President call and say he was glad I was coming back to government, you
know. So that's the Clinton that I know. You know, I would say his greatest
achievement in domestic policy while he was there was the welfare reform that he
caused to happen. You know, it was based in the knowledge that
those of us at the MDRC, and the, you know, by the MDRC helped
to create this knowledge base, and Pat Moynihan was the conduit to help
make it happen in the Congress. You know, so I have really good recollections of what
Clinton did in that aspect of domestic policy, and then Ron, Ron Suskind has
written, maybe somewhat famously, about my engagement with President Bush 43, which
I think certainly didn't turn out well, but I also have to say I have no regrets
about giving it a shot. I still have a passion about what our country should aspire to be and, in my own way, I'm still working on it. TN: How did you try to engage
President George W. Bush? PO: You know, I was encouraged at the, at the outset by Andy Card in setting up the once-a-week meetings to talk to the President about whatever you want to, you know. So, I had a lot of my mind, and, and so, I took Andy at
his word. The President really wants to hear about, hear, hear from you about
whatever you want to talk to him about, you know. So, there were a lot of things
that I wanted to talk to him about, and, you know, it wasn't spontaneous gushing. I
spent a lot of time thinking about what I could say to the President about what
I thought were important policy issues where I thought I brought the authority of knowledge. You know, I had, I had caused myself to become a pretty fair expert
about global climate change, because it was obviously an important issue for our
society. In the job that I had as CEO of Alcoa, it was a really critical question
for Alcoa, because we were a huge consumer of electrical energy. We were a
huge by-product producer of so-called greenhouse gas emissions. I'd gotten involved in these issues a long time before. In fact, I think it was about 1986 that I gave a speech in Atlanta and
opined that we should levy a 50 percent, 50 cent-per-gallon tax on gasoline, because I thought it was the right thing to do from an energy point of view and also
from an environmental point of view. You know. So, I wasn't just a casual observer. I've, I think I really knew what I was talking about, and, you know, I wasn't
signed on then or now to interventions that would destroy our economy but I was
signed on to the idea that one of the things the federal government needed to
be doing was substantially deepening our, our scientific knowledge and
understanding of what was happening to our biosphere, because I thought, as I
said in things that I wrote,, that if we get this wrong, and it's true that we're
destroying our biosphere, we're not going to get another chance, you know, and the
evidence was clear enough then and now that whether you like the connection or
not, the accumulation of greenhouse gases in the atmosphere was continuing at an
exponential rate. That was not in scientific dispute. I thought we needed
to understand if we continue at this rate, what are we going to do to
ourselves, you know. And so, I said to him, I said all this to the President. I had written
things. Actually, I made the mistake in my first Cabinet meeting of handing out what
I had written to all the Cabinet members, and I'll tell you why I did it. It was innocent enough,
probably stupid, actually, that I believe that people who were in
the President's cabinet ought to have knowledge about things that were not in
their direct line of sight or responsibility, because, you know, I
believe well-informed citizens ought to know something about everything that's
important to our, to the future of our society, and that was not well received,
I must say, but anyway, I talked to the President about global climate change. I
talked to him about what I thought was a defect in his idea about, about
elementary and secondary education, and again, it was not a casual observation. I've
been involved both at a policymaking level, making level and at the local school
level for, I don't know, 30 years and working on education, and I thought I
knew as much or more than President Bush did about what the reality was of the
defects in our, in our educational process for elementary and secondary
kids. So, I talked to him about it, you know, I think to no good purpose. I found,
actually, a mind that was already closed, you know, and didn't seem to be seeking
new information or new insights about almost anything that I was interested in,
including the things I was, you know, including things I had a lot more
expertise than he had, and a lot more expertise than most of the people he was
taking advice from, you know. Issues of tax policy. I knew what it was like to
work inside of an enterprise that was affected by the stupidity of a 10,000
page tax code. I don't think that he ever caused himself to understand any of that,
you know. He knew it was there but I don't think he really understood the
implications of it. So, I had, I had, you know, I had a really unsatisfying
experience in trying to figure out a way to connect with President Bush and
basically pleaded with Vice President Cheney to reestablish the process that
had existed with President Nixon and through the Ford administration for a
Brandeis Brief process, hoping that if there, if we had a carefully structured
analytic process, that the President would, would learn from it, would be influenced
by it, and that he would necessarily take on information and insights he wasn't
gonna get any other way. I couldn't convince, I obviously was not successful
in convincing Vice President Cheney that was the right thing to do either, and, you
know, presidents and vice presidents, I suppose, are entitled to get whatever
they wish, because at least you could argue they got elected, and if they sha--
choose to govern in a particular way, and the people end up not liking it very
much, it was for the account of the people who elected them. TN: But Vice President Cheney had been a beneficiary of the Brandeis brief process. PO: I think maybe he
didn't see, see it that way, you know. In fact, I got to tell you, I was
startled when he told me toward the end of my tenure as Secretary of the
Treasury that Ronald Reagan proved that deficits didn't matter. You know, it
seemed to me the most, one of the most absurd things I'd ever heard, and he said
it to me in a way that I think Dick Cheney really believed it, and he may
even believe it today, which I think is, you know, the mark of a really uninformed
person to really believe that we can as a society can endlessly run deficits and
it doesn't matter, you know. I, it, you know, but you see a continuation of this
thought process in what's said in the public discourse about, recently even, the
President and the Vice President opining that the deficit is a very small
fraction of GDP, as though that were dispositive. You know, I want to, it makes me wonder whether they ever pay any attention to the accumulation of federal
debt and unfunded liabilities that we the people now have that have grown by
trillions of dollars on their watch. It's as though they don't think that's a
material fact, you know, which is, I got to tell you, stunning to me. TN: Your, your
friend and ally Alan Greenspan has just written a book. I assume you and he
worked together during the Bush administration to try to make these points. PO: Yeah, for the 23 months I was there we did. You know, it's interesting. His book now validates
what I told Ron Suskind as he was writing the book about my experience. You
know, I was sufficiently weary of the endless surpluses that people were seeing
that I believed we should put in some kind of a trigger mechanism or a circuit
breaker mechanism, so that if it turned out the surpluses didn't real-, didn't, weren't
really realized, that we would not be committed forever to having reduced
federal revenues, and I said to Alan, "You know, this is my idea, and since I had the idea, it's your responsibility to get it done," you know, which we chuckled about, but he did try, and if you read his book, he says he did try, and I think, you know, if you
look at it in an unemotional way, you could argue he did try, but he got
brushed off by the members of Congress, particularly members of the Senate, and
Ari Fleischer said, when he was asked about the trigger idea, "The trigger idea
is dead on arrival if it comes down here. The President will veto it," you know. So,
you know, it was at that point probably I should have said, "This is really a
terrible mistake, because surpluses are of dubious lasting prospect," but I then did say, this is the first tax
cut, which actually ended up being 300 billion dollars less than what the
President had proposed, or 300 million dollars less than what the President had proposed, but
in the subsequent arguments about tax policy, I argued really strenuously that
there were competing priorities that should be given a lot of weight. You know,
this discussion was all unfolding after 9/11, and I was arguing we shouldn't do
more tax cuts, because we need the revenue to deal with, with certain, things
that are certain to be, needed to be dealt with, including Social Security
liabilities and Medicare liabilities and uncertainties related to the prospect of
another 9/11 and, at that point, the prospect of actually invading Iraq, you
know. So, I believed there were four good reasons, and, and adding to that, you know,
the need for fundamental tax reform that was going to cost some money to make the, make the medicine go down, if you will. Those were not winning arguments, and
I made them over and over again. It was in response to that that Cheney told me
deficits didn't matter, that Reagan proved that deficits didn't matter. It was wrongheaded then, it's wrongheaded now. It's always going to be wrongheaded. TN: You were in government for three of the most traumatic moments in our history:
Kennedy's assassination, Richard Nixon's resignation, and, of course, 9/11. Where
were you the day that Kennedy was assassinated? Do you know remember?
PO: I do. You know, not everything I remember where I was, but I remember how I learned that he had been shot. You know, it was a
November day, and it was, it was one of those bleak, overcast,
kind of, not quite misty, not quite raining days in Washington, and I'd gone
for a sandwich to the FDIC building across from the VA headquarters, which is
still in the same place in Washington, and then taken a walk around Lafayette
Park and came back into the building and walked up the stairs to my office, and it
was in a kind of a bullpen environment, and the guy who was my boss came in, must
have been a little after 1:00 o'clock, and said, "The president's been shot," you
know, and it was just unbelievable that the President could be shot, and then to
learn that he was in fact dead, and then to walk out on the streets again and
have this eerie sense that no one was on the streets. You know, people were paralyzed looking at their televisions to see this whole thing unfold, and then to go home
and spend the next several days in front of the television. You know, seeing the Jack Ruby events and the look for, looking for Oswald and all of that. Those are really
still unforgettable moments, and, you know, they, for my wife and I, they were the
days of still sitting in front of a black-and-white television. So, you know,
it's those images that you still, that I still remember. It was not in living
color, it was all in black and white, which had its own starkness about it, you know, and,
and for me, the John John picture is, is there, and it's not because of
something I saw in the newspaper. It's seeing it on live television,
in effect, being a witness to all of that. TN: Where he salutes his father's casket.
PO: Yeah. The Nixon resignation time was really
something. I, you know, I, I had, I had gone down to Bethany Beach, which was a place that my wife and I started going to when, even before we could afford to stay overnight with our four children, but in 1974 we'd rented a place for a month, and I was
only able to be there for short periods of time, but I was there for a couple of days before the resignation, and, you know, I was constantly on the telephone,
because you couldn't get away from things that were going on, but after the
resignation speech, I got in the car and drove back to Washington. It was, it was a
night when it was pouring down rain. We had, we had moved into it, into a new
house, and the contractor had done a bad job. And so, the window wells captured
these avalanches of water that were coming from the gutters, and when I got
home, this must have been one o'clock in the morning, I had three feet of water in
my basement and a need to go back down to the White House by six o'clock in the
morning, you know. So, I was really torn by, you know, I've got this personal disaster,
and I've got this professional disaster, but, you know, it was clear he wasn't
gonna make it, that he was going to, if he didn't get thrown out, he was gonna have
to resign. So, it was not a surprise, but I was so invested in all of this, and I was so
much a part of the administration by that point that, you know, I was, I was
included in everything. And so, I was in the East Room for the Nixon farewell
speech, and I was over by the, by the south
windows, I guess, if you know that, the East Room well, and behind where John
Whitaker sat in the front row and cried like a baby, you know. It was, it was
really unbelievable, unbelievably emotional to be there as
Nixon spoke and remembered Teddy Roosevelt and, you know, talked with, with the girls and Pat Nixon standing behind him. That was really a heavy, heavy, emotional
moment, but, you know, for me it's, it's a companion moment then to one that
happened just a couple of hours later sitting in that same room with the
chairs rearranged a little bit to hear President Ford give his, his first speech
as President, and, and to feel the sense of positive that we're going forward, and this really good guy is going to be the President, you
know, and to see those things personally in the same room on the same day was really quite an emotion-charged thing, and then, you know, to hit the ground running,
because the presidency doesn't ever stop. And so, President Ford's got this avalanche of stuff coming at him and he needs to be briefed and he needs to be informed.
And so, you don't get too much time to linger about the remnants of the Nixon
administration, because government and life goes on, you know. The activities in
Vietnam don't stop because we have this change in presidencies.
You're right, those are really emotional moments. TN: Where were you on September 11th?
PO: You know, I had, when I was Secretary of the Treasury, I spent a
lot of time out of the country, which I did when I was CEO of Alcoa, because
Alcoa was of the world, if you will. We had operations in 43 countries. And so, I was not a casual, occasional visitor to other places around the world. I spent an
enormous amount of time around the world, and an important part of work that I saw
for Secretary of Treasury was to build, to be knowledgeable about other places
around the world. And so, in the days leading to 9/11, I was in China, and actually, on 9/10, 9/11, ended up at
like 7:30 or quarter 'til 8:00 at night in Tokyo on my way from China into
Japan to spend a few days in Japan, and I was in the Imperial Hotel, which is one
of my favorite hotels in Tokyo, designed by Frank Lloyd Wright and built
in the middle to late 20s, and Tim Adams, my chief of staff, came and knocked on my door at, at, I don't know, must have been ten minutes 'til nine, we're upside down 12 hours from the U.S., to say there's just been a plane crash at the, at the World Trade Center,
and then to begin quickly getting a real-time television feed, and to see,
actually see in real time almost, the second plane hit the second tower, and
then to, you know, start thinking about we're part of this, we've got to do
something about this, and to quickly start arranging transportation back to
the United States, which we did the next afternoon at one o'clock Tokyo time. They
scrambled a plane from Okinawa for me, and we flew back to Washington. Refueled
over Alaska, and arrived back at the Andrews Air Force Base something around
six o'clock at night Eastern Time on Wednesday, because the world was stunned, and, and the markets were closed, and President Bush was ordering people, we've got to restart the markets tomorrow, and my people were saying we're gonna have a disaster if we insist. And so, I called Andy Card and said, you know, "We can't do this. We have to do it in a way that we can be sure that when we announce we're
going to restart the market, we can actually do it, and right now, the
communications equipment that provides a support for the New York Stock
Exchange's got 30 feet of water in the basement. We need to figure out how to deal with that. TN: Wow. TN: Let's, I have a few Nixon housekeeping questions, if you don't mind continuing. Just a few. I want to ask you about... The Nixon administration took a good hard look at health care and you were at the center of that discussion. How close did we come to having a national health insurance program? PO: You know, I think we
came really very close to having an integrated, carefully constructed, federal
policy about health and medical care, and I think it's Valentine's Day, I forget whether
it's 1971 or 1972, President Nixon sent to the Congress a message devoted only to
health and medical care, and, and it represented an integrated view of what
we the people of the United States should be doing about health and medical
care from research to environmental considerations. You know,
thinking back on it, the President was really inquisitive about health and medical care, and he, you know, he directed us to look at the aspects of health
and medical care in a really full way, and it's all reflected in that health
policy document from the early 1970s, where we were proposing the family
health insurance plan that's kind of a companion to the cash Family Assistance Plan. You know, there were big disputes in
those days about how individuals and families would respond to different
levels of so-called coinsurance and deductibles, and that whole debate led to
the federal funding of the RAND work on health insurance, you know, which are
still famous, you know. They are the landmark study of behavioral responses
related to health and medical care coinsurance deductibles, so that we could
understand, I think, for all time what effect coinsurance deductibles would
have on people's choices for preventive examinations and, and consumption of
medications and all that kind of thing. You know, in a way, it established the
intellectual framework for everything that has gone on since then, including
the Clinton proposal, the old Clinton proposals, the new Clinton proposals are
all progeny of the Nixon framing of the health and medical care issues, I think.
You know, there's a lot of, there's a lot of room for scholars to investigate and
understand that, and in a way, I think Nixon, the Nixon work in health that we
all did, in health and medical care, was a framing point that the change what had
gone before in terms of thinking about health care policy in the United States. TN: And why wasn't the administration able to achieve a little more in health care at the time? PO: Well, I think we did achieve some things. You know, I, you know, we
helped to, we wrote, some of us wrote the first drafts of the
health maintenance organization legislation. You know, in a way, I'm fond
of saying, you know, we did a whole lot of things that were well intended. They
didn't all turn out well. You know, I think so-called regional medical
programs were a good idea but they had their own downsides. The
partnership for health ideas, in some ways, were a good idea but they had
their own perverse downsides, but they all, I think, you know, we learned some
things. I hope we don't have to relearn some of those things that we... TN: So, you've changed
your mind on HMOs? PO: You know, I think there's a utility to HMOs but I'll tell you what I think now, and it's something I'm spending a lot of time working on.
I think if we're, if we're ever going to achieve what's possible in the health
and medical care in the United States, there are some fundamental things that
we need to do that need to be done at the federal level. It can only actually
be done at the federal level. For example, the, the reimbursement system that has
been created is a travesty, a cynical travesty, so that if you go look now at
the difference between what, what institutions bill insurance companies
and Medicare and what they actually receive from those agencies and from
private insurance companies in reimbursements, you, unless you know
something about this, you'd probably be surprised to know that the difference
between the billed amount and the reimbursement amounts is the difference
between 100% and 31% for community hospitals.
It's only about 26% for academic medical centers. So,
we've got this cynical business of you get billed for these huge amounts, and
everyone knows you don't really get reimbursed for that. It's all a very bad,
cynical joke, I think, but, you know, it's only indicative of the mess that we've
got that in some ways is fostered by the federal government. There's no
transparency in health and medical care about things gone wrong. Occasionally, the
society gets a glimpse of things gone wrong, and individuals get a glimpse
on a fairly regular basis, but they don't put their knowledge together. So, for
example, something like 1 in 14 people who go into an acute care
facility in this country get an infection that they didn't bring with
them. It's unbelievable. It costs an enormous amount of money. It, it
contributes to a lot of unnecessary pain and suffering. Now, why is it that we
don't see that on a national basis? Because if institutions make all of that
publicly clear, they'll get sued by the lawyers until they have nothing left,
okay. So, we have an absolute lid on transparency, which is crazy, because, I
think, if you go around, and you become knowledgeable about health and medical care
providers, I, I defy you to find someone that you would say is a deliberate
malefactor, that deliberately hurts people. You know, no one deliberately gives someone
else an infection but they do it, all right. So, on the one hand you have, you have the
reality, and on the other hand you have the fact that these are not deliberate.
And so, if we could get people to report everything gone wrong,
including hospital-acquired infections, we would have a transparency that we
don't have now. You know, to me it's obvious we need to abandon or kill the
medical malpractice idea, and basically say in exchange for transparent
reporting, we the society, through the progressive tax system, will pay people
who have an economic consequence of something gone wrong in medical
treatment. We will compensate you for the economic loss, and out of that, we will
gain enough information so that we substantially and continuously reduce
the number of things going wrong. TN: We have to have a progressive tax system, though, for that. PO: Well, you know, it's another subject that we can talk about but it's an example of a thing that we can only do at the federal level. You can't do this on a community by community base because it won't work. TN: It goes back to your story about syringes. PO: Exactly. It's exactly the same kind of thing. TN: Let me ask you, because I don't want to take more of your time. You've been very kind. One of the things you have had to think
about as a student of government is what to do with the baby boomers, and
it's something that you focused on when you were Treasury Secretary. You were in
government when Social Security was indexed, which some of... PO: [Laughs] It was maybe Nixon's worst policy mistake. TN: How did that happen? PO: I don't think he-- I think this was a purely political decision, you know. It was before we got the Brandeis
Brief process really installed. This is something he did really early in his
administration. I don't know where he got this idea but somebody convinced him that it was innocent enough for him to align himself with a principle that people
should have cost-of-living index for Social Security benefits. It was a
terrible, terrible idea. You know, the Congress jumped on it, and
Wilbur Mills was, saw himself as a presidential candidate in 1972, and he
helped to get it through the Congress. It was a terrible, it was a terrible idea
then, it's a terrible idea now, and we'll forever pay for the consequences of that
really bad policy decision, but, again, I would say, for me, the reference point is
Nixon didn't have the advantage of a careful analysis process when he decided to do this early in his administration. It was crazy. TN: What role did John Ehrlichman play in, in creating a Brandeis process on the domestic side? PO: A lot, I think. You know, I think many people who are, who are old enough to have seen the Watergate hearings have this image
of John Ehrlichman, a snarling, insolent person, who was a high-level
advisor to Nixon. Yet, I have to admit, if that's what you saw of John Ehrlichman, it
was not too hard to form that opinion. On the other hand, if you worked with John
Ehrlichman, as I did, you know, I knew a completely different person. I was
startled by how John presented himself at the Watergate hearings, because the
Ehrlichman that I knew was really in it for helping the President do good and
right things, you know, and ideologically, I thought he and Pat Moynihan's
really close cousins. You know, so, you know, I thought Ehrlichman was a good guy. He turned out, his public persona on television was not that good guy that I knew. TN: Well, was that, which was the reality, or again, did he have several people? PO: I don't know, maybe he was several different people. [Coughs] You know, he came to see me, it was interesting, after he left the government but when I was still there, this must have been in 1976, he really had gotten interested in Indian affairs, and he came to lobby me
about something about Indian affairs in 1976. You know, he was, he was going through
a really tough time, I think. He and his wife got divorced and he was kind of
trying to find his footing in those days, I think. The last time I saw him was at
Hofstra University when there was a conference sponsored by the University
to talk about the Nixon presidency, and it was not too long before he died. TN: From your vantage point, what role did Haldeman play in creating the Brandeis memo
system? PO: I think he was the enforcer. You know, I think he saw his role as to make sure the President got what he needed. Unfortunately, he was also, he was also an enforcer in some other ways, I think, and not quite so positive, you know, and I
never saw the, the ugly side of Nixon personally, but there was a time when we
got an order, we, I'm saying, when I say "we," I mean, we the associate directors of OMB
got an order that we were to cut off all funding to university, all research
funding, to universities where there were campus protests against the Vietnamese
War, you know. So, and particularly those terrible people at MIT, I know there was a
list them, you know. Don't let those people have any more federal money, and I think
that came from Haldeman's office, and it was probably a reflection of what Nixon
said. So the three associate directors, myself, I think it was, myself, Bill Morrill,
and Ken Dam, went to see George Shultz, and said to George
Shultz, "If we have to do this, we resign. There's no basis in law to carry out
this order, and, you know, the Congress establishes eligibility for federal
grant funds, and the authority's vested in the departments and agencies that
receive the funds. We have no authority here in the Executive Office to overrule
them, and we're not going to do it," and George said, "Leave it with me," and, you
know, the next day we were told stand down, you don't have to do that, and you
don't have to resign. So, George was a really important influence, you know, and
it's apparent now in retrospective and with what one sees in the Nixon tapes, he
didn't get called in to every event but, you know, when he got called in, he stood up
and he prevailed. TN: He did that in the I- with the IRS, when they won. PO: Exactly. TN: The
same, in the same way. So this must have been in the run-up to the '72 campaign? When was this? PO: No, I think this was in '73, and
maybe in early '73, before Ehrlichman and Haldeman resigned on April the
30th. TN: So, early '73? So, he was then Treasury Secretary? PO: Mm-hmm. TN: So, it was not-- But why would you go to him when you were at the OMB? I'm a little.. PO: He still, he was still,
George was really smart. When he became Secretary of the Treasury, he kept his
title as Assistant to the President for Economic Affairs, and he had his little
cubbyhole office in the White House. TN: Oh. PO: Yeah, he was still sitting up there. TN: So, you didn't go to Roy Ash about this? You went to... PO: No, Roy was director of OMB.
We needed to talk somebody who could have some influence. TN: Was he a little upset that you went to Shultz? PO: No, no, no, no, no, no. I don't think Roy ever gave it
a thought. TN: Was Fred Malek a little upset that you did that? PO: If he was, I never heard it from him. TN: It's just interesting, the three assistant directors went, went to see Shultz. Well, you had worked for him before. PO: Yeah, he was our godfather or something. TN: Since this is an issue today and students will know about it,
how well did we handle the energy crisis? PO: [Laughs] We haven't ever done anything. We've just talked about it. TN: It does in your period, though. I mean, in, in, in '73. That was a
challenge you faced. PO: You know, we've always, since, since the early days, we've had endless conversations. In fact, you know, again, it's prescient of President Nixon. He
knew that energy and the environment were going to be generational
issues before any other person, I think, in public life, and knew it in a way that had consequences. He created EPA, you know, and he knew that energy was going to be
a crisis in, in a not too distant future, and formed task forces to work on these
issues. You know, I think, you know, a lot of apparatus was created, the Energy
Department was created, and, you know, we've talked a lot about it but we still
haven't taken major tangible action that we need to take; for example, for, for doing something about nuclear power. You know, we haven't built a new plant, I think, since
1975, you know, although we've been talking about it since the first oil
embargo, haven't done anything, and I think that this administration has
accomplished almost nothing, you know. They've just talked about it, but they're not alone. TN: You're talking about the Bush administration? PO: Yeah. They're not alone. I mean, you know, it's been a long time since 1973, right? I mean, do Ford and Carter and two terms of Reagan and Bush 41 and Clinton and Bush 43. TN: Last question. You talked about the Family Assistance Program being one of the, one of the victims, one of the... PO: The casualties.
TN: Lost casualties of Watergate. From a domestic policy standpoint, where you were, can you, can you point to any other initiatives that went with Watergate
that, that President Ford was not able to restart when he came into office? PO: Well, you know, most people will not remember this but President Ford had a national
health insurance proposal that was the beneficiary of even more refined
thinking than what we'd done in the Nixon proposal. So, President Ford
recommended in his 1976 budget documents that we create a mandated catastrophic
health insurance program for the American people, you know. So, I guess I could say it's at least 31 years ahead of its time, because we still haven't done. It
still, I think, is the right thing to have done but I think the lack of political
capital in the Ford administration was an overflow consequence from Watergate,
and then from the Nixon pardon, so that President Ford didn't have an ability to
accomplish really major things in, in, in initiating major things that came to be realized. You know, he had serious
and important ideas about energy policy as well, but we were never able to
mount a real offensive. TN: Mr. O'Neill, thank you for your time. PO: My pleasure. TN: Great, thank you very much. PO: You got a lot more than you asked for. TN: I know I did. I'm sorry. PO: That's all right. PO: You'll have a lot to cut. TN: I'm not gonna cut it. I mean, it's for scholars.
