Second in Clinton Lecture Series on Policy

- [Announcer] Ladies and gentlemen, please welcome to the stage John J. DeGioia, President of Georgetown University. (audience applauding) - Good morning, everyone. It's a privilege to be with you all today, and to have this opportunity to welcome back to Georgetown, President Bill Clinton. It's an honor to welcome him back here, in Gaston Hall to deliver the second lecture in a series that began on this stage just a year ago today. I wish to extend to President Clinton our deepest gratitude for his continued engagement with our University community and for sharing with us the perspective and wisdom that he has gained through a lifetime of public service, perspective and wisdom that has informed his views and his work in policy, the topic which we'll explore together this morning. I wish to welcome all of our distinguished guests, including Secretary Hillary Rodham Clinton. Secretary Clinton. (audience applauding) Secretary Clinton, it was an honor to have you here on campus in February for our annual Hillary Rodham Clinton Awards for Advancing Women and Peace and Security, and so it's a pleasure to welcome you back to Georgetown. And thank you all for joining us this morning for what promises to be another extraordinary lecture. I'd also like to welcome those who are joining us virtually, especially the students at the Clinton School of Public Service at the University of Arkansas, who are watching our webcast online. I'd also like to express my gratitude to Diondra Hicks, a junior at Georgetown, who following President Clinton's remarks, will present him with questions that have been submitted by our student audience, both here in Washington and in Little Rock. When President Clinton began this lecture series last year, he shared his perspective on the people who shaped his life, the people whose stories shaped his world view, and the power that each of us have to shape our world's future. To that end, he detailed the evolving responsibilities we carry as national and global citizens. He said, "21st century citizenship "requires every thoughtful person "to try to do some public good, "even if they're in private life." The work that has been the focus of his public life, as Arkansas Governor and then as President, and the work that he continues today through his leadership with the Clinton Foundation is all work that is characterized by these same ideals. A depth of thought and commitment to the world, to the people that he has served, and a commitment to public goods and the common good. Having served in public life for many years, governance, policy, and creative partnerships have been at the center of President Clinton's efforts to enact innovative solutions that advance and elevate the common good. Whether it was reforming education across Arkansas that resulted in lower dropout rates and increased college access, or through the domestic policy achievements of his presidency, from expanding health insurance coverage for low income children, to providing job security for sick workers, to lifting seven million people out of poverty, to creating opportunities for young people to serve their country leading to one billion hours of community service over the last 20 years. Or through the work of his foundation to create meaningful partnerships among businesses, governments, NGOs, and individuals that improve lives around the globe. All of his achievements demonstrate President Clinton's deep and personal commitment to the power of cooperation, of working together for the betterment of society. It's a similar commitment that is at the core of the tradition that animates our Georgetown community. Ours is a tradition that asks us to use our skills and our talents to make an impact in the world. The impact that President Clinton has made and continues to make, he sets for all of us. From here in Washington, in Little Rock, and around the world, an example of what it means to live a life guided by a commitment to this tradition, a commitment to working together to make the world a more just place. As our world continues to confront pressing policy questions, questions that call for creative solutions, questions that call for broad based cooperation, questions such as how do we respond to a warming planet, how do we protect human rights around the world, and how do we finally end extreme poverty. As we wrestle with these questions, it is a privilege for us to have with us a man whose life and career has demonstrated a commitment to working together to build in creative partnerships that help ensure global citizens across the world have wider opportunities to realize their full promise. It is a distinct honor to introduce to you and to welcome back to Georgetown, President Bill Clinton. (audience applauding) - Thank you very much, thank you. Thank you. Thank you. Thank you. Thank you very much, thank you. Thank you, President DiGioia, it's great to be back. I want to thank Hillary for coming with me today. It's been a long time since she, she had to. (applauding) She hasn't had to sit through one of these in ages. (laughing) I think there are a lot of my former classmates and friends who are here, I thank them for coming and I want to mention that my Chief of Staff Tina Frenoi's here with me, she's a Georgetown Alum too, so she'd been pushing me to put this on the schedule in the right place. Father Hentz, thank you for being here to remind me that if I had been a Catholic, I could have been a Jesuit. (laughing) I think I can say this. I was America's happiest Protestant when the new Pope took his holy office and I've been thrilled by that and I think all the Jesuits of the world should be very proud of him. As President DeGioia said, a year ago today, this day, I gave the first in a series of lectures on composing a life in public service. Whether in elected office or a government job at any level, or as a private citizen seeking to advance the public good. I tried to organize these talks around what I said then, I believe to be the four essential elements required for effective service. A deep interest in people, especially those who are different than you are. A clear purpose for the service, and an idea about how it can best be advanced through government or the private sector or the non-governmental sector or all three working together. Before you can advance your service you have to determine, develop and then implement the policies that will be the instrument of your objective. How do you do that? What are the problems with it? And fourth, how do you succeed? How do you turn your good intentions into real changes, and whether you have to win an election or not. There's always politics involved in that. I decided, after thinking about this and particularly after the last talk, when I spoke about how I came to be interested in people that we should put the purpose part off 'til the last. Even though it's really the first thing, because it will make all the rest, I think make more sense in that way. I think that it's very important to understand, we live in a time when for a whole variety of reasons, policymaking tends to be dimly understood, often distrusted, and disconnected from the consequences of the policies being implemented. I have felt that most intensely in the development to passage and the implementation of the Affordable Care Act. But I also feel it in many other areas as well. And one of the problems is that if the policy maker is a political leader, and is covered primarily by the political press, there is a craving that borders on addictive to have a storyline, and then once people settle on the storyline there is a craving which borders on blindness to shoehorn every fact, every development, every thing that happens into the storyline, even if that's not the story. So, for all of you who are students here, the first thing I want to say is, I spent a lifetime really believing that policy matters. That there are different consequences to different sets of ideas, and that they matter. And therefore, the debates are important, the disagreements are important, but it's not very helpful to overlay them with too much cynicism and pretend that it doesn't matter, and that it's all just a roll of the dice. I just don't believe that. And so today, what I hope to persuade you is not that everything I did was right, 'cause it wasn't, but that all the policies that we developed, we developed with a certain set of objectives, we spent an enormous amount of time on the details, for which I might say I was made a lot of fun of when I took office. Why is Bill Clinton spending all this time on the farm programs, that's not what a President does. If you'd known as many farmers as I had, you'd have spent time on them, too. But, this is really really important. Because it affects people, and it determines whether your purpose can be advanced. So, I decided that I'd just pick three policies. I started to talk to the President about Americorp and community service, student service because this is the 20th anniversary of it. But I think that its value, its impact, its return for the taxpayers' dollars, the number of other people it mobilizes, the fact that we've had far more people serve. We had more people serve in Americorps in its first five years than in the 40 year history of the Peace Corps. And the main thing that frustrated me was that until people actually needed them, a lot of people didn't know much about the Americorps programs, but I decided not to do that. I wanted to talk about three policies today that I discussed in the first talk a year ago. The implementation of our economic strategy in 1993, anchored by the budget. The Welfare Reform Bill, which was highly controversial at the time, and remains so, and our efforts to achieve a comprehensive peace in the Middle East, which has taken on new urgency in view of all the things that are going on. And which took up a lot of Secretary of State Clinton's time when she was in office. So let's begin with the economic program, because that's actually what propelled me into the race in 1992, and the primary reason I was elected. We had, when I was elected, had already, more than a decade of stagnant wages and a declining middle class standard of living. Many years, poverty was rising instead of going down. The things that we thought were guaranteed right at the end of World War Two all the way through the '60s that oh, we might fight about civil rights, Vietnam might be a catastrophe or a great idea depending on what you thought, but at least we knew the American economy would be there. At least we know that every year people would make more money than they did before, that families would be better off, that children would have more chances, that poverty would go down. It's hard for all of you to imagine that, but when I was a kid, that was taken for granted. Even in my state, which was one of the lowest income states in America. I don't know that I ever met anybody who wanted a job who didn't have some kind of job. We thought that that's the way America worked. By the time I ran for President, people didn't think that anymore. And we had been, for 12 years, governed by an economic policy which propelled President Reagan to office in 1980. The Republicans called it supply side economics, the Democrats called it more disparagingly trickle down economics. But the idea was that the economic troubles we had in the 1970s were caused by the strangulation of the regulatory state, the inefficiencies of unions and government trying to hold on to past economic arrangements, which were no longer relevant. The need to de-regulate to the maximum extent. And most important of all, to make taxes as low as they could possibly be on what the second President Bush always called the wealth creators, the highest incomes people because the more money you gave them and their business entities, the more they would re-invest, create more jobs and create prosperity. And we had been doing that for 12 years. When I was Governor of Arkansas, during this time, there was quite a lot of prosperity in the 1980s on the coast with the beginning of the rise of the high tech economy, along Route 128 and Massachusetts. Here, in the DC area, with the inter-connection companies, and obviously in Silicon Valley. The 1980s were tough for the middle of the country. You had great industrial cities just hallowing out, the farmers had a very tough time in several of those years and a lot of people thought manufacturing was going to disappear from the country. During those years, I tried to follow a strategy that was really quite different in some ways than the Reaganomics strategy. I did believe we had to keep taxes low if we wanted to compete for jobs, especially since our state was already a low income state, and we had a very good budgeting system, which made it illegal for me to spend more money than we took in for more than six months in a row. If I did that, my Chief Financial Officer and I could be found guilty of a misdemeanor. For a system going back to 1948. As a result of which, we were cutting spending all the time and not just at budget time. We never had any mass layoffs, we never had to abolish any big programs. If we had the money, we invested it. If we didn't, we didn't spend it, but we had a flexible system which enabled us to operate, and we relentlessly worked on developing our education systems, our training programs, and our attraction for new investment. In the 1980s there were only eight states which gained manufacturing jobs and my state was one of them. We worked on it. But I can also tell you that I learned that it takes a good while to repurpose an economy. And when I ran for President, in the previous 10 years, our unemployment rate had been below the national average only once, but in 1992, in a happy political coincidence for me, but that's not why it happened. We led the country in job growth throughout the year, we were always first or second in every month. But I developed a very different theory about what makes an economy grow. When we started practicing supply side economics, this country had never before, in its entire history, ever deliberately run large, structural budget deficits in peace time in times of growth. So, despite the current Congress, their writing, President Obama's stimulus program, basically, we had an eight year long stimulus ride, driven primarily by big increases in defense spending, and large tax cuts. The Reagan tax cuts were so large that in 1981, about 40% of them were actually clawed back, and we still, in only eight years, triple the debt of the country that we had run up from the beginning of our existence to 1981. Then when President Bush came in, he really basically, as I'll argue later, the first President Bush, had to serve President Reagan's third term in economic terms. That is, the ideological and institutional political support for supply side economics was so deep, there wasn't much that could be done about it. Finally, in 1990 the Democratic majority Congress passed the bill to try to start doing something serious about the deficits and the debt. They had some modest tax increases, and some modest spending cuts, and the most important thing in that bill in 1990 was the so-called Pay Go provision, which said that unless there was an emergency, like this financial crash, which Congress could recognize, or a big national security emergency, in normal times, if Congress wanted to spend money that went beyond the revenue growth that was projected, they either had to raise taxes or cut some spending somewhere else. To try to turn this trend around, which had then been going on since 1981. It was a good thing for President Bush to do, but the reaction in his own party was ferocious. Newt Gingrich led a revolt against the Republican leader in the House, Bob Michael, and he was deposed and it led to the beginning of the pre-Tea Party Tea Party movement. Which basically was saying the same things you're hearing today. Because it was economics is not theology, folks. It's a practical business. But they thought it was, and they had convinced everybody including middle class people, whose incomes were stagnant that their incomes were stagnant because they had been so crushed and their wealthier neighbors had been so crushed by the burden of the state. And it led to the rise of Newt Gingrich, and it forced President Bush, when we were running against each other, to give what I thought was a very sad speech at the Republican Convention, saying that he made a terrible mistake to sign this budget bill, and he would never do such a terrible thing again. Now, if you read the press, it's generally, people think it's one of the three or four best things he did. And I thought he had done a very good job in most of his foreign policy work. He signed the Americans With Disabilities Act, he had a better environmental record, from my point of view, than his predecessor. But he was stuck with this economic policy. And I thought the most important thing I could do was to reverse it. And it began with the budget, which is far more than just numbers. The details matter. So, let me begin by saying, I put out a booklet in the primary, and then Al Gore and I reissued an economic plan in the general election, and we began to work on what would be in the details of the budget. It was a very interesting process. We debated all kinds of things like, you may find this amazing, 'cause interest rates have been down so long. Even the Democratic economists assume, during the transition period, that if we got unemployment below 6%, my goodness, you'd have terrible runaway inflation. And so we had these arguments at the Governor's Mansion in Arkansas, I said no we won't. Because productivity is high and our borders are more open than other countries, so if we start charging too much with inflation, competing products will come in, and it'll drive the prices back down. We need to shoot for 4% unemployment, and even my own advisors looked at me like I had been temporarily deranged. And, let me hasten to say, that's 4% unemployment with high work force participation. I take it you all know this now, but when you see the unemployment rate, it measures the unemployment rate among people who are looking for jobs. And when workers get discouraged, as they have, quite understandably in the aftermath of this financial crisis, then the participation rate in the labor force tends to go down. So that the unemployment rates may not be comparable from one year to the next. It really depends on what the level of workforce participation was. Anyway, what we decided to do was first, to figure out what had caused the slowdown, because there was a marked slowdown in the economy in the Bush years. And we got into a little recession, we got out of it, we kept coming back, we couldn't just shake out of it. Why was it worse, since the economic policy had not changed from the Reagan years? Basically, what happened was it was the first time in, as I said, American history, we'd run these big deficits, so in effect we went on an eight year stimulus program, and then a 10 year stimulus program in peace time with economic growth, and if you keep borrowing all that money, eventually you have to pay higher interest rates. And the higher interest rates were crowding out private investment. So, we decided, first we had to get the deficit down and secondly, we had to do it in a way that people would know we were serious. Now, all this is 1993 dollars, so we're talking about a lot more money today. We had to have a plan that would credibly reduce the deficits by 500 billion dollars over a multi-year period. And that if people believed we would, which meant that our estimated revenues and our estimated spending had to be credible, something that had been shredded in the '90s by so-called rosy scenarios, where you'd always assume when you did your budget you were gonna get more money than you knew you would, and you'd always assume you were gonna spend less than you knew you were. I said, I want to reverse this. I want to assume we're gonna get less than we think we will and assume we're gonna spend more than we think we will, so the numbers will be better. And we did that. So just announcing the program, especially since the Chairman of the Senate Finance Committee, Lloyd Benson of Texas, agreed to be my first Treasury Secretary, had a huge impact on the bond market and interest rates started to drop and investments started to pick up. This bill violated all the orthodoxies that had governed the country for 12 years. We raised the personal income tax on the top 1.2% of earners from 33 to 36%, where it had remained until it was cut and then President Obama allowed the cuts to elapse and then the Affordable Care Act levy on top of that, came in. We raised the corporate income tax from 33 to 35% on corporate incomes above 10 billion dollars. The difference between that day and this is when I did it, that 35% was exactly in the middle of the corporate tax rates of all the other rich countries in the world, the ones we compete with in the so-called OECD, the Organization for Economic Cooperation and Development. Today, it is by far the highest in the world. Everybody else has opted for a lower rate with fewer deductions, so that you have this bizarre situation in America where one of our big companies, a couple years ago, Exxon, paid 17% in real dollars, and while a lot of our big manufacturers, companies like Dow paid near the maximum. But, it was very different then. I wanted us to be competitive and right in the middle. We also, now, you should know, are the only rich country that taxes re-patriated income, that is, if you earn money in Ireland you only pay 12%. If a company brings it back to America, they have to pay the difference between 12 and 35. So it shouldn't surprise you, since nobody else does this, that there is more than a trillion dollars in corporate cash by American companies hanging around overseas. And you should ask yourself, whether you're a Republican or Democrat or a liberal or a conservative, if you had responsibilities to your shareholders, your customers, your employees, would you bring the money back if you could conveniently keep it somewhere else? It's a big issue today. I'm saying this because it was not an issue then. There were a lot of companies that didn't want to pay it, but it wasn't because it was gonna put them out of line competitively, with what was going on in the rest of the world. We also passed in the House America's first carbon tax, which Al Gore had recommended, and which I wanted to do because I wanted us to get a head start on tackling climate change. 21 years ago we passed a carbon tax in the House. Alas, in the Senate, we couldn't pass it, 'cause carbon had more friends in the total vote. We had already had two changes, then we had tax cuts. The most important one to me by far was doubling the earned income tax credit for lower income working families. And as you will see, as we go along, it had a big impact. I also proposed a middle class tax cut that was modest, but real. And the creation of empowerment zones in areas of very high unemployment and low income to induce more investment there to try to create a normal economy for people who had really been totally left out of every good thing that had happened in the 1980s. Then we were told, late in the process, that the deficit was gonna be a lot bigger than I thought. This is the first thing about policymaking. If you care about the details, they have to be calibrated to the circumstances. Now, I had two choices. I could pretend like I didn't hear that report, which, believe it or not, a lot of people have done over the years. You just pretend you didn't hear it. Or I could change the budget. Since this whole thing would have been pointless, from an economic point of view, if we didn't drive the interest rates down, I changed the budget. We cut a little more and we had to take out some of the tax cuts. And Congress changed the carbon tax to a gas tax. And so, I decided to take out the middle class tax cut because I knew that if we got interest rates down, middle class people would save way more money in lower interest rates than we could ever afford to get in a tax cut. 1993 dollars, they wound up saving an average of $2,200 in lower interest costs on home mortgages, car payments, house payments, credit card payments, college loans. And it was enormous. So, I think I made the right decision, but it was hard to do because I'd said the whole time I was running that this would be a part of my economic plan. So you have to say, will you be accused of breaking your commitment? Well, my commitment was to restore broad based prosperity to the American economy, to give people a chance, and the circumstances had changed. Had I just said, I'm gonna keep my commitment. One Congressman came to see me and tried to get me to get rid of the gas tax and go back to the middle class tax cut and get rid of the earned income tax credit for low income working people, because he said, we're all gonna have to run in 1994 and they don't vote in mid terms. The intersection of politics and economics. And, by the way, he was absolutely right. He was, that is, accurate in his analysis. But I thought it was wrong for America. I thought we had to do something to get working families with lower incomes up to decent standards of living in order to have broad based prosperity. So I kept the earned income tax credit, deferred the middle class tax cut until we passed the balanced budget act in 1996, and well you know the rest, it worked pretty well. So, we did that, now, the thing I want to emphasize is, that it wasn't the only thing that we did. In that budget, we really tried to dramatically increase investments in certain areas. Beginning with early childhood we added two billion a year, we tripled spending for dislocated workers. People that lost their jobs through technology or trade to try to prepare them to take other jobs. Even when unemployment went way low, when there were fewer dislocated workers, we kept doing that. And we're still not very good at it. Particularly if they live in small towns or rural areas. What would you do to restore the economy in Rural West Virginia or Eastern Kentucky. Or the mountains in North Arkansas. Or the Rio Grande Valley or the Mississippi Delta. What about the Native Americans that live on reservations who don't have gambling? They're still the poorest Americans. So, we tried to come to grips with all this, and it required some investments. We're on track to double investments in the National Institute of Health, we finished by the time I left office, sequencing the human genome. We spent a lot more money on other kinds of R&D, and especially on information technology. And the Balanced Budget Act of 1996, which most people know about, which we passed with the Republican Majority of Congress, they won the Congress in 1994 in no small measure because the economic plan passed. It was a shock to the system, even though the American people voted to let me do it. It was like being taken to the dentist and pulling your teeth without Novocaine. And they said, but we've been living on sugar since 1981, you can't go pull out our teeth, we don't have to go to the dentist. It was ugly out there. And people didn't feel the benefits of the program by 1994, but they knew what had happened. So, we lost the Congress. By 1996, after the Republicans had shut the government down twice and the American people tried to put their pre-Tea Party Tea Party budget in to eliminate the EPA, and the Department of Education and do some other stuff that I didn't think much of, and the public stayed with me, we passed a bipartisan balanced budget. It did have a middle class tax cut, it had massive increases in the budget and outside, it was the biggest increase in college aid in 50 years. Since the GI bill. We had the first money since Harry Truman to help schools build new schools and repair old ones 'cause we finally had a class of young people in our public schools, including many of you, bigger than the baby boom generation. But we had the highest percentage of public school students we'd ever had whose parents were not property owners. So it became very difficult to pass local property tax levies, and states all had to run on balanced budgets so we had some money and we committed a billion dollars to a school construction program. We went from zero to 1.3 million young people in afterschool programs, so that they could keep their learning going. We did a lot of other things, so this was not all a casserole budget. We invested some things. And we tried to accelerate the tech boom that was underway and to spread it to other areas of our national life. The Telecommunications Reform Act, I signed by general consensus created hundreds of thousands of jobs, and kept the opportunity to go into business in the telecom areas available to small business people to entrepreneurs and didn't let them get choked off just by the big players in the game. And we came a long way toward connecting all of our schools to the internet. We went from 35 to over 95% of our schools with internet connections in those eight years. And with something called the E-rate, which saved two billion dollars a year in connection costs for hospitals, schools, and libraries. So, we were investing in things we thought would speed up what was going on. And it was really easy in the Balanced Budget Act, because the bill in '93 had done twice as much good as everybody estimated. We had no rosy scenario, we underestimated its impact. The growth was greater than we thought. So, the Balanced Budget Act of '96 was an easy bill, and the most important thing we got out of it for the future is something that's at the heart now of the expansion of health care under the Affordable Care Act. The establishment of the children's health insurance program, it was the biggest expansion of health care since Medicaid, and almost immediately we had several million children getting health insurance who couldn't get it. To get that and all that education aid, I had to make a compromise. And I don't know how many times I have read from the left, bitter criticism about what a slug I was to sign the Balanced Budget Act of '96 lowering the capital gains rate from 28 to 20%. I did it, but we had the money to do it, and it was the price I paid to get the children's health insurance program and all that education stuff in the budget, and I would do it again tomorrow in a heartbeat. One of the things that you have to decide if you get into the business of making policy, and you're not alone in a room dictating what's gonna be done, is sometimes, other people have ideas too and if you want what you want, you got to give them a little of what they want. And it isn't just politics per se. It is integral to the process. You're free to decide that you think I made a mistake, but all the people that say, what was Bill Clinton doing getting in bed with Wall Street and lowering the capital gains tax? He was getting six million poor children health insurance coverage. And you just have to ask yourself that's the price you would have paid. I wouldn't have done it in '93, 'cause the deficit was too big. We were balancing the budget. And we subsequently got in four, '98, '99, 2000 and the 2001 budget, I wasn't the President, but we presented the budget, four surpluses in a row for the first time since the 1920s. Before the Depression. (applauding) But even there, we had an investment strategy. So, you had to control all the other spending to target what you wanted to target. And the people who thought something else should have been targeted could criticize you for it. Now, the storyline of all of this was very different than the story I have just told you. The storyline was basically two fold, and it hurt us in the '94 election. The storyline was something like, Bill Clinton raised taxes, but not middle class taxes. Therefore, unlike our heroes of the last 12 years, he's a tax raiser, and he didn't even give the middle class a tax cut. And the storyline was designed to create the impression that I hadn't kept my commitments. So, a man I had never met, who turns out to be America's foremost scholar of the relationship between the media and the politicians, Thomas Patterson, who was at the Maxwell School at Syracuse and I believe is now in Harvard. But I literally never met him. He wrote this article in either the New York Times or the Washington Post saying, what is going on here? He said, President Clinton made more commitments, more specifically, than any of the last five Presidents, and he kept a higher percentage of them. The American people should think they finally got somebody in here who's thought about what they were gonna do and kept his commitments, and instead they're being told every day, that he's a slug because he failed to pass health care, which is another way of saying I didn't have 60 Democratic votes to break a filibuster. And he failed to give the middle class a tax cut. Underneath, all this other stuff was going on, and the storyline blanked it out. Nobody said, well the guy did reverse trickle down economics, that was a pretty good hit. Or that we had these programs to do away with poverty, so it was challenging, to say the least. But the most important thing is, did it work? In the end, that's the test. So, we got a few charts here. Put the first chart up. (crowd laughing) I love this. Ross Perot used to do this to me all the time. It drove me stark raving mad, but I decided there was something to it. So, President Reagan had very, very good job growth, for the time. Before him, if you go back all the way to the early '70s, the only person with better job growth was Jimmy Carter, who had very good job growth but low income growth, in real terms 'cause inflation was so high when he was President. So, he had 15.8 million jobs, we had 22.9 million jobs. You can say, oh Clinton was lucky, he caught the tech boom. Clinton was lucky, he came out of the recession. I hope I have convinced you it wasn't just me, we had a whole team of very gifted people working on it. But one thing you can't explain away, is the difference in the poverty reduction numbers, that's the single most important number to me in my eight years as President, personally. In all the so-called prosperity of the 1980s, only 77,000 of our fellow Americans moved from poverty into the middle class. In the '90s, 100 times as many, 7.7 million people did. That was policy. (audience applauding) Interestingly enough, the conservatives always said that they hated the government, but the size of the federal government expanded by nearly 200 thousand under President Reagan. We maximized the use of technology thanks to Al Gore's reinventing government program, and we reduced the size of the federal government by 347,000 when I was in office, and when I left office, the government had the same number of employees that they did in Dwight Eisenhower's last year as President, in 1960. And they were doing more, we were doing what we should have been doing for you, using the benefits of technology to increase the efficiency of government. Let's go to the next slide. But the most important things, I will say again, is that that's not the next slide. (laughing) Most important thing I would say again is we had then what we have to do now in more difficult circumstances. We had to restore broad based growth. You can have all the economic growth in the world, and if only 10 people have it, you don't get very much. So, let me just show you this. We actually had this colored, you can't see, but you see where it says Clinton Administration? Look how steep that curve is for eight years. That's median family income, that's the one in the middle. And between '93 and 2000, in 2012 dollars, median family income increased 17%, from $57,800 to $67,600. And you have to go all the way back, let me just show you here to get this steep a curve, here, matching that, you have to go back to the 1960s. Let's go to the next slide. (audience laughing) You should always ask, if you're in an economics class, don't let anybody tell you what the average is. That's like, you ought to be able to put one foot in boiling water and one foot in freezing water and feel just right. (audience laughing) (audience applauding) The average is great, what you want to do is put your foot in the median waters, that is the one that's between the hot and the cold. Okay, so here's the most important thing. The typical way income is measured, is in Quintiles, the lowest to the highest. So this shows you why President Reagan only had 77,000 people move out of poverty. In income, now these are averages, but they're more relevant averages, 'cause they're within a tighter screen that eats 20% of the income. The bottom Quintile average 0.7% of increase in income, the second 7.8, the third, 9.7, the fourth, 12.2, and the top 20%, 22.7. In our case, the bottom did 23.6, 17.6, 16.7, 16.0, 20.4. Keep in mind, all these people over here started with higher incomes in the first place. But the point is, you do not have to have unequal economic growth. You can have broadly shared prosperity, but it requires policy. You have to have a deliberate strategy to do it. And the policy that would produce it today is slightly different than the policy that produced it in the 1990s, because of the aftermath of the financial crash, because of the continuing acceleration of technology to dramatically increase productivity to the point where it's hard to create more jobs than are being eliminated every year in rich countries and for a lot of other reasons. But it shows you that you can do this, you can have broad based prosperity. And it drives me nuts when I read all these people saying, oh, you know, ever since the '70s, inequality's been growing. That's not true. Inequality grew in the first year and a half I was President, too, by the way. This actually embeds, this understates how much was done once the whole economic program kicked in. We had increased the inequality through like the end of 1994, and then from '95 to the end it took off. Let's go to the next slide. I think this shows you how concentrated it was, I believe this was the so-called 5% slide, I don't have a 1% slide. In the '90s, no this is more important for right now. This shows you how America changed, and it's important for me to acknowledge and for everybody else to acknowledge that this growing inequality started before trickle down economics or supply side economics, but was accelerated by it. 'Cause if you look in the Nixon Ford years, we had a Democratic Congress and two Republican Presidents. Both of whom would be far too liberal to get nominated today. But, they had there you see it's almost identical, the bottom fifth grew almost as much as the top fifth in those years. Then, in President Carter's years, it's pretty close, and you have to understand, Jimmy Carter had 10.8 million jobs in four years. And he did a lot of things to try to get jobs but inflation was so bad, it made it look like nobody was making any money in real dollar terms. So, those numbers are low because of the inflation. Then, you're familiar with the Reagan numbers. President Bush had a decline in both, but I believe you should see that in terms of the other eight years, that is, it's inter-relatable, wheels had to run off of running these big deficits and letting the interest rates go up and generating jobs essentially only out of defense, there was just a limit to it. And then you have our years, then with President Bush, again, and believe it or not, this is both a compliment and a cautionary tale. When President Bush ran for office, the second President Bush, unlike the first President Bush, he was free to decide what he wanted his economic policy to be. And he basically said, vote for me and I'll bring you back to supply side economics. The rhetoric was clever, it was, I'll give you the same thing Clinton did with a smaller government, a bigger tax cut, wouldn't you like that? I'm a compassionate conservative. And he actually turned out to be in pep for and a lot of other things, but he believed that Reagan was right and I was wrong. This is what he believes. And so, we went back to financing two wars on borrowed money and financing a tax cut for Hillary and me on borrowed money and spending more than we were taking in. And, the consequences were there and put that chart back up. And I want to make full disclosure here, I attempted to get these numbers, I just haven't been able to do it, to stop on the day of the financial crash, so that no one would say I was being unfair, not to him but to the theory that I'm advancing to you. I couldn't do it but you see it pretty much, the numbers would be the same, they'd just be slightly smaller. Because a lot of the damage of the financial crash was done at the very end of his term, it didn't occur until he was almost out of office. But what happened in those years was all of our growth before the crash was from housing, consumer spending, and finance. And median income, the one in the middle, was lower than it was the day I left office, before the crash. Which is why you see these income numbers. In other words, there is a very significant limit to how much you can grow the economy by cutting taxes on high income people, and even by spending money, if you don't spend it very well in the government. You have to have a clear strategy on how you're gonna spend your money and you have to have a clear strategy on what tax policy can be. Look, there's no inherent virtue in taxing anybody, but there is an inherent virtue in raising the money that you have to spend to build a decent society, to take care of people who without no fault to themselves can't take care of themselves, and to do the investments that have to be done publicly. Now, there are all these businesses, hundreds and hundreds and hundreds of billions of dollars in benefits that have spun out of the human genome, but the first three billion dollars, you pay for as taxpayers. And had you not, we wouldn't be where we are. We wouldn't know what the two primary genomic variances are that put young girls at high risk of breast cancer at an early age. A discovery which literally could end deaths by breast cancer and end mastectomies. We wouldn't be where we are in learning about Parkinson's and Alzheimer's and all these other things. We wouldn't have the level of sophistication that a lot of those Johns Hopkins researchers just say they may have found a way to end heart attacks. Little late on that for some of us, but it's. (audience laughing) We're laughing, but this is important. It's not just spending and tax cuts, it's what kind of tax cuts and how much and what kind of spending and how much. The details of the policy matter. They will have consequences. Let's go to the next slide. They lost it. This basically says what I told you before, but if you look at this slide I'll tell you exactly. Between the poorest 20% and the wealthiest 20%, it shows you that there was almost no difference in how they did under Nixon and Ford. Carter had some difference. The biggest difference by light years was under President Reagan. Then the two Bushes had almost identical differences, and the only time the poorest 20% had a bigger income increase than the richest 20% was in the 1990s, a 3% difference. Go to the next slide. This just gives you an opportunity to see how wealth was being concentrated. That big, turquoise number, that's the top 5%. And so, we had to simplify the rest of it but you got the lowest fifth on the right, the middle fifth, and the highest fifth. On the left, I mean, and on the far right you've got the top 5%. If you look at in the Nixon Ford years, we had the most progressivity, that is the biggest gain on the bottom. President Carter, those numbers just mean that basically everybody more or less inched forward together. Then everybody lost ground in the two Bush years, but looked what happened under Reagan when we started with these permanent deficits and driven by the spending cuts. The last two numbers are the top 20%, with the one on the right being the top 5%. You see, here the thing I'm proudest of on these numbers when we were there, is that our bottom 20% actually had in percentage terms about the same gain in income as the top 5% did. This is really important. This is the kind of stuff people say oh, this will never make the evening news. Nobody gets shot, there's no drama. These are millions and millions and millions of people's lives. This is what policy means. Let's go to the next one. The next one, if they're the poverty slides, hold on. In closing, here's what I want to say. We had a plan that restored fiscal responsibility, increased investment where it would do the most economic good, and structured the tax system and a lot of our other programs to lift middle class wages and reduce poverty by moving people from poverty into work or into higher paying jobs. And we've pursued it for eight years, through different circumstances with both parties, and I made deals when necessary, we'll talk more about that next time. But it worked. And today, it's harder because of the crash, it's harder because now, a lot of the information technology that helped me so much may be producing so much productivity so fast that it's more difficult to replace more jobs than you lose than it was when I started. It's more difficult because of the level of competition and almost desperation all over the world. There's a world job shortage, especially for young people. But it's easier for us because of the energy revolution, where we're producing more of our own energy now, and because of our other strengths. We still have the best network of higher education in the world. We are still the youngest country of all the major competitors except for China. 20 years from now, we were gonna be younger than China, if they hadn't changed their one child policy. And the details are not clear yet, so we still may be younger. But that's why immigration reform is even more important today than it was 20 years ago when I was President. Because having lost it, I can tell you youth matters. (laughing) It matters, and the fact that. Just look around this room here, the fact that we have all this diversity and all this youth, and all this brain power is a massive competitive advantage. It's harder because we want to do something about the deficit, but we actually should be investing. As long as interest rates are lower than inflation, just remember this general rule of thumb. If interest rates are lower than inflation, no matter how upset you are about a deficit or a debt, you should focus on growing the economy more and driving interest rates up so that you can actually lower the deficit if you cut spending and raise taxes. Now, I supported it when President Obama decided and fought for the right to let the tax cuts on high income Americans that had been enacted in the Bush years expire because people in our income group have enough disposable income that it didn't change our consumption patterns much, so it didn't contract the economy very much. But right now, if you did what I did in a heart beat in '93, if you did exactly that, and you cut spending too much or you raised taxes too much, instead of investing in an infrastructure bank and enticing companies to return some of this corporate cash to America, to put America to work, it wouldn't work. You can only balance a budget if you have adequate revenues, adequate spending restraints, and adequate growth. The country needs growth. Then everybody will do well. Hillary and I and some of our friends in this audience who live in New York probably pay the highest aggregate tax rates in America and I thank God every April 15th that I'm able to do it, I never. The family I grew up in, it's fine. I'm thankful. But you could tax me at 100%, and we couldn't bring growth back into the economy enough to balance the budget. It's got to be a growth strategy. As long as people in the top one to 5% are making the lion's share of the, 90% or more of the money, we ought to pay the lion's share of taxes for the same reason that Willy Sutton robbed banks, that's where the money is. But, not just for the purpose of lowering our incomes. It's for the purpose of having some balance in this country that should be part of a strategy to restore broad based growth. I can guarantee you, every person I grew up with would far rather have a pay raise and a better future for their children and grandchildren than any given tax rate on any given individual or company. This is all part of the strategy. The progressive goal should be shared prosperity. We have to think about it in terms that are relevant to today so if I were making these decisions today or trying to work it out, I would have to admit that not everything we did then would work today. But if you start with the goal in mind, that's the lesson to this whole thing, this is the lion's share of what I wanted to say today. Start with the goal in mind, broadly shared prosperity. Identify the problems. The income distribution is too skewed, there's too much inequality, it's a severe constraint on growth, and it is. It's a huge constraint on growth. Spending 17.8% of our income on health care was a huge constraint on growth. To give you an idea and again, I don't want to talk about this today, I want to talk about it more in the next lecture on politics, but when the President signed The Affordable Care Act, we were spending 17.8% of our income on health care. Nobody else, nobody big rich country was spending more than 11.8. That's a trillion dollars a year. So, in addition to whatever you think about what finance did in the crash or what big companies are doing not giving their employees pay raises, there are massive numbers of small businesses who would have loved to give their employees pay raises, who spent the money on their health care premiums. So, obviously it's even worse now, right, because we've got eight million people enrolled in the exchanges, and another three and a half million already covered by Medicaid expansion on our way to five million. It should be on our way to 10 million, but those other states don't want to participate. Which is one of the all time bad economic responses. Virginia has a study commissioned by the Republican legislature, with the Republican legislature, that says if they take the Medicaid expansion, it will create so many jobs and save so many jobs, and increase productivity so much, that the budget of Virginia, even when they have to start paying a match, will actually be improved by a billion and a half dollars over a decade. And they're still not gonna do it, even though they're gonna make money on it. And there's this idea abroad in the land that this is all for four people on welfare, they are covered already. They were covered before the Affordable Care Act ever passed. This is for low income, working people that cannot afford it. But, here's the main point. You know what we're spending on health care today, after four years of implementing this law, and millions more people on it and seniors saving 10 billion dollars in drugs? 17.2% of our income. In other words, we're getting closer to our competitors, 'cause we're delivering care in a more efficient way, and we're wasting less money. That's policy. It's all that boring policy that you can't claw your way through the storyline to get to to save your life half of the time. Policy. Now, I want to do two other quick ones to make the point. And also, to talk about the positive and the negatives. Let's take welfare reform. What was the problem? The welfare program was developed to be a temporary assistance to all but young widows with little children when there weren't many women in the work force. Over time, for a variety of reasons, not the least of which was changes in family structure, it became sort of the life line of millions of people, and it took generations out of the work culture. The storyline when I signed the Welfare Reform Bill was well, the Republicans have really got Clinton now, they've forced him to sign this horrible bill, 'cause he wants to get reelected. Now, the facts were different. I had been working on welfare reform since 1980. The first politician I ever heard talk about welfare reform was Robert Kennedy. Right, Frank? Who worked for him. Mr. Banquets did. I was a Governor in 1980 when Jimmy Carter got the authority to give five states experiments to change from an income based system for poor people to a work based system. And I applied and we were accepted. By the time I was a senior Governor in the country in the late '80s, I worked with the Reagan administration on a welfare reform bill. And, here's the only thing you need to know so you don't forget about the people. We were about to pass this bill, I had a big forum for the Governors in Washington here to go lobby to Congress, and we brought in all these people that had been on welfare, including a woman from my native state Arkansas named Lily Harden. And I said Lily, she's talking to all these Governors, and looked like she'd been doing it all her life, was very comfortable. I said, do you think that this program should be mandatory? She said oh yeah. I said, why do you think that? She said, because people like me are scared. We don't think we can't amount to anything, and we'll just stay home and watch TV unless you make us get out there and get job training and take a job if we can get it. I said, are you glad you went to work? She said, yeah. I said, well what's the best thing about it? She said, when my boy goes to school, and they ask him what does your Momma do for a living, he can give an answer. I'll never forget that as long as I live. That's what this was about for me. I thought there were millions of people we could move from welfare to work. Now, to be fair, people, including people in my own administration said, this will be a disaster, there's just too many people who will never get in the work force. You're gonna increase poverty, it's gonna be horrible. Okay, so we go through the first years of my administration, and I decided, along with Donna Shelayla, who's now the President of the University of Miami, was Head of the Department of Health and Human Services. We would give states waivers to start putting people to work. By the time the bill passed, about 90% of the people in America were covered by welfare reform proposals, because we had given 44 of these states waivers. We knew what would work and what wouldn't. And so if you go back and read the history of this area, they'll say well Bill Clinton vetoed the first two bills, 'cause they were terrible for poor people, and then he caved at the last 'cause after all it was an election year. And to be fair, two people who worked for me, one of who became the Dean of the Kennedy School at Harvard, whom became resigned and I applauded them when they did. I said, you know, nobody can be sure how this is gonna work, and that's what you should do in public service. If you can no longer, in good conscience implement a policy that's within your reach, people should resign. They are good people and I applaud them. Now, one of them later said, when I went to Harvard to speak, that I had been right and he had been wrong because of the results. But it's a little bit more complicated than that. The Welfare Reform Bill basically said, if you can work, and there is a job, you have to take it, and if not you have to be involved in some training or preparation program, but there's gonna be a lot more money to help you manage your parenting responsibilities and work responsibilities in child care, in transportation, in a lot of other supports. So, let's start with these charts, let's show the charts. I vetoed the first two bills, welfare reform bills, 'cause they wanted to block grant Medicaid and they wanted to block grant food stamps and let Governors decide not to give poor people and their kids food and medicine. They wanted to cut the school lunch program, it was terrible. So, the storyline, if you go back and read nearly (mumbling) and they say, well he vetoed the first two bills, but then he caved, you know, we were coming up to the election, these are 16 changes I got from their bill after two vetoes, including guaranteed Medicaid, four billion dollars in childcare money that wasn't there before, a work performance bonus, that is, we allowed people to take welfare benefits and give them to employers as wage supplements to give people jobs. I vetoed the food stamp block grant the first time, we got that back. And the school lunch program we got back and lots of other things. Go to the next slide, the point is, we were having this dazzling policy debate, including the Republicans on the other side who disagreed with me, who really thought that the Governors would be so much more efficient, they didn't care what they got rid of. Let them decide based on the facts of the poverty in each state. But as we all know, different electorates show up in different elections, and the people who are elected may or may not need to respond to that. So, here's what I want to say. There were two provisions in the final bill I signed that I hated. One was a five year lifetime time limit. I had no problem with it except it should exempt all recessions. It's not your fault. And it wasn't a problem the first time, but it's a terrible problem after the crash. The second problem we largely corrected, which was that the Congress wanted to eliminate and did eliminate benefits for legal immigrants. But, look how much more money, on the left is how much money was spent after welfare reform passed in the aggregate on poor people. And then if you go a line down you see after 2006 when the Congress changed hands again how much more money was spent. Go the next slide. Here's what happened to poverty rates in those years. It went down most where it was highest in central cities. It went down least where it was already lowest, in metropolitan areas outside central cities, and it was a pretty healthy decline in non-metropolitan areas. And the welfare reform bill was a part of that. Go to the next slide. At the top, the welfare role has declined by approximately 50% in four years, four and a half years from the time I signed the bill. And then by the, in my last budget they declined over 60%. But, one of the things that I was criticized for, and you should all know this, this is policy. I don't think I ever read it in a single article, they said, how can Bill Clinton take away from poor people their minimum monthly benefit? Here's what was never in any of those articles, and I bet most of you didn't know this. When the Welfare Reform Bill was signed, the minimum monthly benefit was whatever the state was paying in 1973, 23 years earlier. The only protection in federal law was you could cut your welfare benefits, but not below what they were in 1973. So that the lowest states, and family of three in Texas and Mississippi got $187. The best state, Vermont, got $655. There was literally that kind of, so it seemed to me that adding more flexibility and letting them use the payment on wage supplements was a good thing. Now, go to the next slide. I have to admit that I never dreamed there would be Governors who would want to eliminate the income supplements altogether. He didn't get the last ones, that's what he was trying to tell me. Right? And there were. So, I did not foresee that, I didn't foresee this wave, this Tea Party wave that would believe one more time that poor people are the problem in America. What welfare reform did prove, and I want you to all remember, this is the last and most important thing is, almost all those people want to go to work. When you leave today, if you were here at the other lecture, and you want to pair the people with the policy, don't forget Lily Harden, the most important thing about her going to work was that when her son went to school, and was asked what does your mother do for a living, he could give an answer. My conclusion about welfare reform is different from the economic plan. My conclusion is a lot of that is still relevant to today. It did far more good than harm, but now, given the changed climate in the aftermath of the crash, the poorest welfare families, about 15% of the total are worse off. And we should do something for them. And we oughta, all of us who supported it should admit that. The other 85% are better off. And we shouldn't have a five year time limit that includes prolonged recessions. You should just total the running at the time. You don't have to pay for this six months or this nine months, or this year. It was too severe. That's my conclusion about that, you can draw your own. Now, let me just say a few words about the Middle East peace process 'cause they're relevant to today and I think I almost never here it reported accurately and I think it's worth your knowing. When you do domestic policy, you have to make agreements with other people in politics and interest groups and with your conscience. When you do peace processes, you have to realize, I don't care how much you know, how much you're involved, and how much the media treats it like it's yours to win or lose, it is not about you. It's about them. No President, no diplomat, no anybody can want anything for anybody else worse than they want it for themselves. So, when I go to Ireland, they think I'm pretty great. But they deserve the credit for the Irish peace process. The Albanians think I'm pretty great because of Kosovo. The Bosnian Muslims and Croat Christians in Bosnia, they like me, I hope someday the Serbs will forgive me. But, in the end, all these deals are done by the people themselves and they're the ones affected by it. The job of the peace maker is to listen and try to find a way they can both meet their fundamental needs, and then if they do decide to take the leap, to maximize the benefits and minimize the risks. That's our job. So, policymaking cannot solely be judged on whether somebody else makes a decision that's beyond your control. And you cannot enforce these things. So let me tell you briefly and I will make it brief, but it's important what happened in the Middle East peace process when I was President, 'cause it's relevant to where we are today. Number one. The agreement signed in September of 1993 on the White House lawn reflected what the parties had done themselves in secret meetings in Oslo, representatives of Israel and the Palestinian authority. They wanted to do it in the White House because both sides trusted the United States. I was a new President, they trusted the United States to be an honest broker, and fair and to get this thing implemented. And to make sure that Israel's security concerns and the Palestinians' political and economic concerns were legitimately met. So, we started, almost two years later. And you have to understand, I worked with four Israeli Prime Ministers during this, and Yassir Arafat occasionally shifting, Senior team and him. We had a signing of the first big deal after Oslo where a chunk of the West Bank, a modest chunk, was just turned over to the Palestinians to govern there. The agreement included, I think the agreement for Israel to release several thousand prisoners, 5,000, as I remember. And to divide the West Bank into categories. Category A would be total economic control by the Palestinians, category B would be Palestinian villages that they would manage and oversee but if there was a terrorist threat, the Israelis could move in. Category C were largely unpopulated areas of the West Bank, which Israel would still maintain jurisdiction over for security reasons. So, we did that. And I have really two points to make about it. When we signed it and we signed nine maps marking all these changes, three copies of each, and in the middle of the process, there was a bypass road that looked like it that the map said belonged to Israel that Arafat said he was supposed to have. And Rabin and Arafat came up to me and Rabin said, you gotta fix it, this is terrible. We've got a big dispute. And I took them into my dining room, and I said, no you fix it. I've been on that road, but I was on a religious pilgrimage, neither one of you are religious. You got to figure out how to work together. And I said, but the whole world press who is out there, they've been waiting for us for 20 minutes. So, you guys better figure out what to do. This is really important, imagine this today, in Ukraine, in any other setting where you're trying to get something done. They walk out. Keep in mind, two years earlier, Yitzhak Rabin didn't want to shake Arafat's hand, and Rabin said, he's right it's his, I'm gonna give it to him tomorrow. I said, but the map says it's yours. And if Arafat signs this, it'll be binding under an international law. Arafat looked at me, he didn't blink, he said, his word is worth more than any written contract. Can you imagine people in these conflict situations, talking about each other like that today? It's really important. So he signed it the next day, Rabin gave him the road, and we never heard about it 'til, I think Dennis Ross finally wrote about it in his book. Nobody even talked about it, well of course his word is good. So that's the first thing I want to say. Somehow you have to find a way to establish trust among adversaries. Agreement is not nearly as important as trust. Trust predates everything. That agreement cost Yitzhak Rabin his life. He was murdered just a few weeks after that by a very angry young settler, who I might add is still revered as sort of a hero in his crowd in the West Bank for what he did. The best chance we had for peace was lost because Rabin had captured Arafat's psyche, and he trusted him. Okay, fast forward, 1998, we met at Wye River with Netanyahu, who was then the Likud Conservative Prime Minister. His Defense Minister, Ariel Sharon, at the time was considered to the right of him, and still wouldn't shake hands with Arafat. For nine days we stayed there. I'm pretty sure I violated every human rights convention on Earth, because my goal was not to let them sleep until they actually made an agreement. I'd go nap in the middle of the day and then come back and keep them up 'til three or four o'clock in the morning, just trying to. But we had to do something, we were stuck. At the end of Wye River, they agreed to give 13% of category C. To show good faith, the Israelis did it, and we got Palestinians up to 40% of contiguous land on the West Bank. There were a number of other things done. Problems slowed it down and Ehud Barak was shortly thereafter elected the new Prime Minister and in 1999 he completed the transfer. So the 40% of the West Bank that came out of the Wye River Accord is largely the West Bank governed by President Abbas today. The base from which he negotiates or doesn't, as the case may be with Israel. Now, I had been talking to Arafat for a couple of years, and I said, do you want to do an agreement before I leave office, or not? And he said, oh my God yes, if we don't do it it'll take us five or 10 years, maybe more. We gotta do it while you're there. And it's 13 years and counting. He was right about it, but they didn't want to come to Camp David in the beginning, 'cause they said they weren't prepared, but the Palestinian strategy all along, which made sense in the beginning, was to deliberately be not prepared, in the sense that they understood that all they had to give was security cooperation and ultimately a declaration that the conflict was over and in peace and they would work together. That was worth something, by the way. 1998 was, at the time, I don't know what's happened since for sure, but I'm pretty sure it's still the only year in the history of the state of Israel when not a single solitary soul was killed by a terrorist incident. And there was an election and a change of government because of the Mossad working with the Palestinian security services and the CIA, and we got a little luck. But it happened. So, Arafat said, no no no no, you have to do this. I said okay. I said, the first thing we gotta figure out is what you will take. And what you've got to have and what they've got to have. I never expected, everybody talks about the collapse of Camp David, that's a big load of bull. Camp David was a roaring success from my point of view, because they had never sat together, and talked about all these final status issues and given the United States, who had to try to broker a deal any sense of where the parameters were. What were the limits? Where would we go? We had Camp David and then the Israelis offered, I think 90, 91% of the West Bank and they said that's not enough, but they said well, what will you take and they wouldn't say and it was that kind of thing, you know, it happens all the time. And so we set about working for six more months. And finally, in December, I couldn't close the deal so I basically said to them, I have tried to bring you two to this and we have talked about these issues for six months now in excruciating detail, so I will tell you what I think the deal should be. I think the Palestinians should have a state on 94 to 96% of the West Bank. The Israelis should give them some compensating land, no less than one to 3%. They should be able to get 80% of the settlers in settlement blocks adjacent to the 67 borders of Israel. Truth is, you could do it on 3% of the land now. It's tight, but you could do it. Takes a lot more now, 'cause there's a lot more settlers. They should have a capital in East Jerusalem, Al-Quds, they call it. And it should be all of East Jerusalem except for the Jewish neighborhoods, which should still be a part of Israel. There were two big Jewish neighborhoods. And a lot of other stuff. Here's what you need to know. After all this negotiations, I intentionally let there be a little play in the territorial thing so the Palestinians could get a little more, 'cause they needed to show they did. And the Israelis, I think, would have got to 4% or less, and they also were prepared to do I believe 100% nan swap, so if it's four and four or whatever. But that's a good thing for them to negotiate. Arafat wanted the Israelis to keep the Jewish neighborhoods in East Jerusalem, and offered to have special security guaranteed Ingress and Egress to the rest of Jerusalem. They agreed on how to divide the governance of the old city with the Jewish and Christian quarters going to Israel and the Muslim and Armenian quarters. I mean the Jewish and Armenian quarters going to Israel, the Muslim and Christian quarters going to Arafat. He was very proud of being custodian of Christianity for the Arab Christians. They agreed that they would both occupy the current Israeli lookout outposts in the West Bank. They would do it together. They agreed on all this stuff. The only thing they couldn't agree on, was how to describe the way they had both agreed the West Bank would operate. The Temple Mountain would operate, or what the Arabs call the Haram Mo Sharif. They agreed on what it should be. The Muslims had run it since 1967, since Israel captured it with a religious group called the Wads, and the Israelis proposed to turn it over to the Palestinians because of the Dome of the Rock in the Al-Aqsa Mosque. They agreed that the Palestinians couldn't do anything under the Temple Mount because the ruins of the temples of David and Solomon are there and as we all know now because the excavation and a lot of other things. They disagreed only on 50 feet of the Western wall, where I think Israel was right. Arafat wanted to give them the Wailing Wall, and there's 50 more feet, and at the end of that 50 feet there's the entrance to a tunnel, where if you got in you could do mayhem to the ruins of the temples. And they hadn't agreed on exactly the composition of the international force that we would be a part of on the West Bank, and the schedule of withdrawal from the Israelis. But they pretty much agreed on everything else. The Temple Mount problem, I never saw anything like this. They agreed on how it would operate, but the Palestinians wanted to say they had sovereignty over all of it and the Israelis wanted to say they had sovereignty over all of it, and I tried to convince them to split the sovereignty or turn it into an international peace center. It was, as Shamon Parah has said in his customary eloquence, it is the first political problem in history where there is no problem on what happens, but no one can figure out how to describe it. But that's about it. Barak said, I'll take it, we'll negotiate, we'll fill in the blanks. Arafat said, I'll take it in theory, but I have reservations. In the end, Israel and Barak accepted the deal. The Israelis, now keep in mind, this was in 2000, were ready to give up 96% of the West Bank, to give up Israeli land, to give the Palestinians a capital in East Jerusalem. And Arafat wanted eight more blocks in the Armenian quarter, 'cause there were a couple of churches there, and he wanted to have all the Christian churches. But, that's pretty much what they were disagreeing on. Arafat knew that he would have to recognize the state of Israel, that he would have to give up the unlimited right of return. That some refugees would be taken into Northern Israel who had been in the camps in Lebanon, whose families had been there for 2,000 years before they were moved. But there could be no unlimited right of return, and I agreed to raise 10 billion dollars or more to relocate all the Palestinians out of the camps. And the state of Palestine, the few that would go to Israel and other countries. And Arafat never said yes. When I was about to go, six weeks before I left office he came to see me and I said, I'll never forget this because you always read these things about how America's in the tank for Israel and not for, I looked at Arafat and he was, he and Barak didn't get along all that well. And first I said stop, stop. I said look at me, I said we've been doing this for eight years. Do you think I care about the Palestinians? And he said oh yeah, much more than the Arabs do. He said look at me, he said, if I were a Jew, would I be in this fix? No, all of our children would be in America going to college and the adults would be in Europe becoming millionaires. He said yeah, you do. I said, okay. All you owe me is the truth. If you're not gonna do this, I think you're nuts, but you're okay with me. But you gotta do what you're gonna do. But after eight years, you owe me the truth. Because I can go to North Korea and get rid of their missile program, but a President can't just drop in on North Korea for the first time in 50 years. It was different there then than it is now. I said, I have to go to Japan, to South Korea, to Russia and to China. We have to do this together. And it'll take 12 days and I only got six weeks left. And it's the only time I ever saw Arafat cry, he said, oh God, you can't do that. I said, I know it can't 'cause it needs to look like I made you do this, doesn't it? He said, yeah, that's what we gotta do. I mean, it's very different in private (mumbling). And so I didn't go. I said, you gotta understand, we're giving up a significant opportunity to make the world a safer place. You owe it to me to tell me the truth. If you're not gonna do this, just tell me. I won't say a word. He said no, he said. And he went through this whole deal about how it'd be 10 years again. He told two different Arab leaders he was gonna take the deal that I just described to you. And the details had to be filled in. On January the 7th I went to the Israel policy forum and went public with this whole thing. And I just had a couple of weeks, but we really had 'til the middle of February when the Israeli election was gonna occur. Because under the agreement, Israel had to ratify the peace agreement. And because of the Intifada, which started when Ariel Sharon went up on the Temple Mount for the first time since 1967, which I begged Arafat not to start, Barak was then at 38% in the polls. People thought God, look what he offered him. They knew what he'd offered. They won't take that, let's just elect the toughest guy we can find. To heck with him. And Arafat let me leave and then he let Barak leave. And then, in the most bizarre episode, President Bush decided, after a while, to start getting active in the Middle East, and he developed this road map, you all remember that term? Just a few days before the road map was announced, Arafat stood up and said, I want Clinton's deal, let's close the thing on Clinton's deal. Nobody could even hear him, nobody took him seriously. He had an Israeli government that wouldn't give it to him and an Israeli public that didn't trust him. That is the background of all this. So, with all of our intense involvement, there's still a high level of misunderstanding, and a high level of mistrust, which is why Yitzhak Rabin's death may be the pivotal moment. So, I ask you to think about that. Did we fail, you tell me. In the four years after I left office, three times as many Palestinians and Israelis were killed in violent accidents than in the eight years I was there. We always need to get caught trying, fewer people will die. But just remember this. If you try in any endeavor you do, to settle a dispute between somebody else, it's about them, not you. And you can't succeed if you ever forget that it's about them, not you. And think about Yasir Arafat telling me that Rabin's word was worth more than any written contract. And think there is no problem on Earth we couldn't solve if all the adversaries could say that about each other. Policy matters, too. Thank you very much. (crowd applauding) Thank you. I was looking for. - So, thank you President Clinton, again, for joining us. Here, I have a few questions from students at Georgetown and students who are watching us live from the Clinton School of Public Service at the University of Arkansas. So let's get into that. The first question is from Alicia Doo-Ah. She asks, "An important achievement of Obama's term "has been the institution of the Brain Project, "which is an important advancement "for a research University like Georgetown. "What is your opinion of the future "of science and politics "and some of the ethical issues "we face with something like Brain?" - Well, first of all, I strongly support the Brain Project, it's starting off with a modest amount of money, but it's an important thing to do. And I think it's very important to have public investment in groundbreaking areas where there is no immediate prospect of return. Then when you break through the first barrier, other people will take it up, that's what happened with the human genome. We spent three billion dollars of your money on it, and I saw a study two years ago that said we'd already reaped 180 billion dollars in economic benefits from genomic research in America. And that's old data. That's gonna happen with this brain research. We're learning amazing things. That's particularly important because of the aging of the baby boomers. For example, since your brain starts to shrink when you're about age 30. Don't worry about it, 'cause we use such a piddle little bit of our capacity, it's okay. (audience laughing) You'll be okay. But since it shrinks, people thought the aging of the brain meant that we would all naturally atrophy intellectually and mentally as well as we do physically. Couple years ago, it was discovered for the first time that you can form new neural networks in your brains in your late sixties, and that this brain growth is available to all people and not just geniuses. So, for example, suppose somebody my age were a prize winning theoretical physicist. You would think what I would want to do to keep my brain going, since physics is a young person's game, is to try to take the two biggest remaining unsolved problems and figure out how to solve them in all their complexity. The truth is, I would be better off taking the grandchild I hope to have in the next few months to Suzuki Piano if I don't play piano. That is, the study shows that doing something new, even if it sounds simple, is more important to revitalize everybody's brain. Taking Spanish when you're 70, than doing a more complex version of what you already know how to do. Now, these things are important. If you think about just the health implications of the retirement and the aging of societies. And what about Japan where they've been below replacement in population, or Italy, which is below replacement, all this. What if people have to start doing at least non-physical labor 'til their 75 years old in some of these countries. This brain research thing is very important, and then obviously for all the human reasons, so is there some way since Hillary's got this fascinating program for young children, and she talks about the word gap that kids in poor families grow up hearing 30 million fewer words by the time they're three years old. 30 million. And the architecture of the brain is largely fixed by the time you're three or four years old, 85% of it. What if this brain research revealed that we can start to building again? That you can take a 16 year old who's put in prison for stealing a car, and give him the tools to create the person that God meant him to be in the first place? So yes, I think it's worth doing and I think I hope that subsequent governments without regard to their party will put a lot more money in it. Science is something you should really want your government to do. Basic scientific research, basic technological breakthroughs. And I personally believe, I know Gene Sperling, who was my economic advisor and has served President Obama so well, and Sandy Berger, my National Security Advisor, they're both out here, but I personally would like to see more investment in building the IT infrastructure. We should have national broadband speeds the speed of South Korea's. They average like three and a half, four times faster than ours because we have great broadband in place X, Y and Z and then you got long stretches where people don't have it and it has terrific adverse consequences. So, all that sort of stuff, you should be for having your government invest in. - [Diondra] You just talked about aging in your last response. We have a question from Vicky Wang and Andish Dragic who are seniors here at Georgetown. They ask, "According to the United Nations "Populations projections, "the number of people over 65 is expected "to double within the next 25 years. "What is the most effective first steps "of the United States Federal Government "that they can take to mitigate "the negative impacts of demographic shift?" - Well, the most important thing we can do is keep people healthier longer so that when our lives come to an end. I'm not being facetious here. We would drop like an ideally maintained laboratory specimen. That is that we would in effect, die with our boots on. That way we would be as physically mobile as possible and our brains would work as well as possible, and that we do nothing to add to the massive cost of maintaining people who need more help that can be avoided, that's by far the most important thing we can do. Then I think we have to look at whether there are employment options that people can undertake that won't forfeit the benefits they've already earned. One of the great bipartisan bills I signed at the end of my presidency, I don't. I think there was one vote against it in the House of Representatives, and well over 400 for it. Basically said people over 65 could go back in to work if they wanted and earn income without losing their social security benefits. And it flew through the Senate, too. All the Republicans and Democrats said what were we thinking. We thought you had to move people up and out, but when the demographics change, A, you may not have enough young people, and B, if it's not strenuous, it's a good thing to have seniors. Out in Loma Linda, where all the Seventh Day Adventists who are over 100 live, and they've got all these 90 year old women driving around serving the senior centers, taking care of those poor old people. (audience laughing) I mean, we're laughing, but I think we have to explore what we can all do to be productive and active and that'll help us stay healthy. I think those two things are the most important thing. Otherwise, I think we have to find ways to do what the Affordable Care is struggling toward which is keep changing the delivery system of health care so you can have more prevention and less cure, and more continuity of services at the most affordable price. But the best thing to do is to stay healthy and stay active, and if possible contribute to the country's productivity at the same time. - In your lecture, you spoke about college aid. So this question comes from James Colony, he asked, "I have a large amount of loans coming out of Georgetown. "What is your advice to students graduating "who seek career paths that require more schooling "but also need to pay back loans?" - I think first, it depends on how you have to repay them. One of the things that President Obama did with the Congress, once we had a Democratic Congress then the President, they changed the Federal student loan program so that everybody has an income contingent repayment option. Right, you all familiar with that? When I was President, I couldn't do that, but I did get a huge experiment. I got the Congress to approve letting every college who wanted to participate in it do it. And a lot of the bankers who were financing it didn't like it very much but I thought it was a great deal, I thought that way, no matter how much you borrow, you would never pay more than a certain fixed percentage of your income. Usually I think the limit's something like 10% of your disposable income after your essentials are paid for. And when Hillary and I were in law school at Yale, our class started this income contingent program, and we all had to pay just 0.6% of our income until our class paid its debt off. And that's the best money I ever spent. As long as you can make it income contingent and the percentage is limited, almost all higher education is a good deal. The problem is, people have loans from many sources, and a lot of 'em don't have that. And since the cost of college has gone up at two or three times the rate of inflation for some time now, it's difficult. But, I think the federal government is gonna try to rework this, and I think there's got to be a way to get basically everyone in the income contingency business. Think about this. If you buy a house with a down payment, you're gonna take at least 20 years to pay for it unless you're richer than anything. And you probly want a 30 year mortgage. And at these interest rates, you want a 30 year fixed rate mortgage. You don't think about it. You think your first house is worth more than all your education? It's not, is it? I'm telling you, when you're my age, you'll be able to remember, I remember classes I had with Father Hentz. I'm not trying to embarrass him. I was down with my Secretary of Education, Dick Riley the other day in South Carolina, and he said that his favorite moment in the White House is when we had all the teachers in the year there, and I reeled off every teacher I'd had since kindergarten. And they thought I was making it up. Why do we make students pay their student loan back on terms and within timetables that are worse than you get to buy a house? Or worse than we get if we have to pay off a power plant to a utility we take 20 or 30 years. But the most important power plant of all is what's in our mind. And look, for Universities, it's a real problem, because a lot of them can change the delivery system, and do better, but it depends on the economics, the student body. I thought Arizona State has a really interesting system. They have 85,000 students now. If you make less than $60,000 in family income, you just don't pay tuition. If your family's below the poverty line, you don't pay anything. They just got tired of doing all the paperwork, and but you do have to work. And they do a lot of not just cleaning up the campus and stuff, students actually work as assistants to the professors, they do all kinds of different jobs. But we need to figure this out, either to make the loan burden easier or to give people a reasonable amount of time. You amortize a home, what do you get, three or four years to pay for a car, right? I mean, your college education lasts longer than your car does. Especially for some of you. I mean really think about it. So that's my best thought of this. I think the income contingent loan program gives us the key to what we should try to work through with the private sector loans and we need to set up something. There's all kinds of things we could do to make this work. And we've got to do it, because I don't care what anybody says. I know that you don't have a guarantee once you get a college education. I know some graduates get a lot more starting pay than others, but the truth is, A, it's good for you personally, emotionally, intellectually, and B, it's good economics, it really matters. In the depths of the economy, after the crash, unemployment among people with four year degrees was one half the overall unemployment rate, and unemployment among people with post graduate degrees was less than a third the overall unemployment rate. So, it's a good investment, and you oughta be able to pay for it over an appropriate amount of time with a limited amount of your income. - A lot of your lecture was about economic policy and you also touched on the economic situation in rural areas of the nation. This question comes from Tyler J. Bridge. They ask, "In 2008, the Recession closed nearly every "factory in my hometown of Hamilton, Ohio. "We lost everything, my Uncles lost their jobs "at the paper factory. "How do you think politics of the federal government "can help cities like Hamilton, Ohio "get back on their feet?" - I would have to know more about the community. But this is one, you know, I told you we were gonna talk about this next time, but this is one of these deals where the federal government can provide either tax incentives or direct investments to help. Sometimes you can even solve other problems, but the community has to decide what its future's gonna be, and where they're gonna go. I mean, when Hillary was Secretary of State, she spent a lot of time lobbying for American companies to be treated fairly and contracts in foreign countries, and they would have effects in places like this town in Ohio, but what the town in Ohio does and how they chart their economic future has to be involving the states and localities and the business community and it's something you gotta do forever. You gotta have a strategy. When I was a Governor, I suppose I spent more time on economic development than anything else, and the Mississippi Delta was the second poorest part of the country at the time after the Indian reservations, the Native American reservations. There was a county in Southeast Arkansas, dirt poor, with two towns about the same size. One of them had a 12% unemployment rate, the other one had a 4% unemployment rate. Same socioeconomic background. Because there were all these go getters in the 4% town that just kept redefining the mission and kept finding new possibilities and kept trying to activate those possibilities. I will say this. I mentioned this in passing but I'll tell you again, since you lost all those jobs. I became very worried in my second term that the empowerment zones and all that stuff were great. I didn't mention this, but Harlem got an empowerment zone and their unemployment was 24% when I took office and 8% when I left. Detroit got an empowerment zone, bankrupt Detroit, they're unemployment rate, including the larger Detroit area was about 9.5% when I took office, barely over six when I left. So, when people tell you Detroit can't come back, don't believe it. It has not always been a basket case, it hasn't always been terrible. But, it's really tough. You have to have a local strategy that somebody else comes to. So we passed this New Markets tax credit, and I'd be shocked if more than 10% of you in this audience knew what it was. But it basically says if you go to a place and you invest and their unemployment rate's above the national average significantly and the income's below the national average, you can get a 39% credit on your investment to go in there. And any developer worth his salt who knows that investor X or Y has a way to finance this, will figure out how to use this and use it to increase the number of people who will look at particularly the small towns, and the rural areas and the places that have been hit with factory closings. But, I can't answer your friend's question without knowing more. I could give you really good ideas if I had two hours to sit and listen to what the place looks like, 'cause I used to do that for a living. That's what Governors do. - Okay, well, Mr. President, we want to thank you for joining us today. - Thank you, Diondra, thank you. (audience applauding) (giggling) Thank you all! - So, before we go, I have one quick announcement. Audience, please stay seated while Mr. and Mrs. Clinton leave the building. So, please everybody remain seated while our guests leave the building and thank you again, on behalf of everyone here at Georgetown, thank you. - [Bill] Thank you. (audience applauding)

Channel: Georgetown University

Views: 75,417

Keywords: 3527300098001, trending, event_r, trending_r, youtube

Id: f2hebOQrFr0

Length: 121min 2sec (7262 seconds)

Published: Thu May 01 2014