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286240199
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[02/18/1999 - 01/03/2001]
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286240199
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[02/18/1999 - 01/03/2001]
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Presidential Electronic Mail from the Automated Records Management System (ARMS)
Automated Records Management System (ARMS) Email from the Office of Policy Development (OPD) Bucket
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26444780-20190568F-006-003-2021
[Sperling, Contract with America]
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RECORD TYPE: PRESIDENTIAL (NOTES MAIL)
CREATOR: Mark A. Kitchens ( CN=Mark A. Kitchens/OU=WHO/O=EOP [ WHO ])
CREATION DATE/TIME:18-FEB-1999 10:27:02.00
SUBJECT: CNN Moneyline, February 17, 1999
TO: Sean P. O'Shea ( CN=Sean P. O'Shea/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Laura J. Lewis ( CN=Laura J. Lewis/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: James E. Kennedy ( CN=James E. Kennedy/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: James T. Heimbach ( CN=James T. Heimbach/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Katharine Button ( CN=Katharine Button/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Rebecca L. Walldorff ( CN=Rebecca L. Walldorff/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Heather M. Riley ( CN=Heather M. Riley/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Jonathan M. Prince ( CN=Jonathan M. Prince/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Clara J: Shin ( CN=Clara J. Shin/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Roger V. Salazar (CN=Roger V. Salazar/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Edward F. Hughes ( CN=Edward F. Hughes/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Gregory B. Craig ( CN=Gregory B. Craig/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Sarah E. Gegenheimer ( CN=Sarah E. Gegenheimer/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Christopher Ferris ( CN=Christopher Ferris/OU=OMB/O=EOP @ EOP [ OMB ])
READ:UNKNOWN
TO: Rochester M. Johnson ( CN=Rochester M. Johnson/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: June Shih ( CN=June Shih/OU=WHO/O=EOP @ EOP [ WHO 1)
READ:UNKNOWN
TO: Jason H. Schechter ( CN=Jason H. Schechter/OU=WHO/O=EOP @ EOP [WHO])
READ:UNKNOWN
TO: Alison Muscatine ( CN=Alison Muscatine/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Steven J. Naplan ( CN=Steven J. Naplan/OU=NSC/O=EOP @ EOP [ NSC ])
READ:UNKNOWN
TO: Kevin S. Moran ( CN=Kevin S. Moran/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Paul K. Engskov (CN=Paul K. Engskov/OU=WHO/O=EOP @ EOP [ WHO 1)
READ:UNKNOWN
TO: Michael Waldman ( CN=Michael Waldman/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Barry J. Toiv (CN=Barry J. Toiv/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Melissa M. Murray ( CN=Melissa M. Murray/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Patricia M. Ewing ( CN=Patricia M. Ewing/O=OVP @ OVP [ UNKNOWN ])
READ:UNKNOWN
TO: William A. Halter ( CN=William A. Halter/OU=OMB/O=EOP @ EOP [OMB])
READ:UNKNOWN
TO: Lisa J. Levin ( CN=Lisa J. Levin/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Amy Weiss (CN=Amy Weiss/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Ruby Shamir (CN=Ruby Shamir/OU=WHO/O=EOP @ EOP [WHO])
READ:UNKNOWN
TO: Mark D. Neschis ( CN=Mark D. Neschis/OU=WHO/O=EOP @ EOP [ WHO )
READ:UNKNOWN
TO: Thurgood Marshall Jr ( CN=Thurgood Marshall Jr/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Jonathan A. Kaplan ( CN=Jonathan A. Kaplan/OU=OPD/O=EOP @ EOP [ OPD ])
READ:UNKNOWN
TO: Jeffrey M. Smith ( CN=Jeffrey M. Smith/OU=OSTP/O=EOP @ EOP [ OSTP
READ:UNKNOWN
TO: Julia M. Payne ( CN=Julia M. Payne/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Beverly J. Barnes ( CN=Beverly J. Barnes/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Jake Siewert ( CN=Jake Siewert/OU=OPD/O=EOP @ EOP [ OPD ])
READ:UNKNOWN
TO: gamble-bennett ( gamble-bennett @ dol.gov @ inet [ UNKNOWN ])
READ:UNKNOWN
TO: Dag Vega (CN=Dag Vega/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Chandler G. Spaulding ( CN=Chandler G. Spaulding/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Robin M. Roland ( CN=Robin M. Roland/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Melissa G. Green ( CN=Melissa G. Green/OU=OPD/O=EOP @ EOP [ OPD ])
READ:UNKNOWN
TO: Paul E. Begala ( CN=Paul E. Begala/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Toby C. Graff ( CN=Toby C. Graff/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Michael A. Hammer ( CN=Michael A. Hammer/OU=NSC/O=EOP @ EOP [NSC])
READ:UNKNOWN
TO: Victoria L. Valentine ( CN=Victoria L. Valentine/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Tracy Pakulniewicz (CN=Tracy Pakulniewicz/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Jon P. Jennings (CN=Jon P. Jennings/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Alejandro G. Cabrera ( CN=Alejandro G. Cabrera/O=OVP @ OVP [ UNKNOWN
READ:UNKNOWN
TO: Joshua S. Gottheimer ( CN=Joshua S. Gottheimer/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Guy Smith ( CN=Guy Smith/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Justin Coleman ( CN=Justin Coleman/OU=WHO/O=EOP @ EOP [ WHO ].)
READ:UNKNOWN
TO: Melissa J. Prober ( CN=Melissa J. Prober/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Steve Ricchetti ( CN=Steve Ricchetti/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Susanna B. McGuire ( CN=Susanna B. McGuire/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Julie B. Goldberg ( CN=Julie B. Goldberg/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Rachael E. Sullivan ( CN=Rachael E. Sullivan/O=OVP @ OVP [ UNKNOWN ])
READ:UNKNOWN
TO: Jeffrey A. Shesol (CN=Jeffrey A. Shesol/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Mark A. Kitchens ( CN=Mark A. Kitchens/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Gordon Li ( CN=Gordon Li/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Daniel J. Gunia ( CN=Daniel J. Gunia/OU=OA/O=EOP @ EOP [OA])
READ:UNKNOWN
TO: Julie E. Mason ( [CN=Julie E. Mason/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Laura D. Schwartz ( (CN=Laura D. Schwartz/OU=WHO/O=EOP @ EOP [ WHO D
READ:UNKNOWN
TO: Gene B. Sperling ( CN=Gene B. Sperling/OU=OPD/O=EOP @ EOP [ OPD )
READ:UNKNOWN
TO: Anne M. Edwards ( CN=Anne M. Edwards/OU=WHO/O=EOP @ EOP. WHO ])
READ:UNKNOWN
TO: Jonathan E. Smith ( CN=Jonathan E. Smith/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Sara M. Latham ( CN=Sara M. Latham/OU=WHO/O=EOP @ EOP [ WHO )
READ:UNKNOWN
TO: Eli G. Attie ( CN=Eli G. Attie/O=OVP @ OVP [ UNKNOWN
READ:UNKNOWN
TO: Peter A. Weissman ( CN=Peter A. Weissman/OU=OPD/O=EOP @ EOP [ OPD ])
READ:UNKNOWN
TO: David S. Beaubaire ( CN=David S. Beaubaire/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Nanda Chitre ( CN=Nanda Chitre/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Matthew I. Fraidin ( CN=Matthew I. Fraidin/O=OVP @ OVP [ UNKNOWN ])
READ:UNKNOWN
TO: Jennifer Ferguson ( CN=Jennifer Ferguson/OU=OMB/O=EOP @ EOP [ OMB D
READ:UNKNOWN
TO: Jonathan Orszag ( CN=Jonathan Orszag/OU=OPD/O=EOP @ EOP [ OPD ])
READ:UNKNOWN
TO: Lowell A. Weiss ( CN=Lowell A. Weiss/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Julianne B. Corbett ( CN=Julianne B. Corbett/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Elizabeth R. Newman ( CN=Elizabeth R. Newman/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Jordan Tamagni ( CN=Jordan Tamagni/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Megan C. Moloney ( CN=Megan C. Moloney/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Brenda M. Anders ( CN=Brenda M. Anders/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Dominique L. Cano ( CN=Dominique L. Cano/OU=WHO/O=EOP @ EOP [ WHO )
READ:UNKNOWN
TO: Maya Seiden (CN=Maya Seiden/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Leslie Bernstein (CN=Leslie Bernstein/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TO: Anthony R. Bernal ( CN=Anthony R. Bernal/O=OVP @ OVP [ UNKNOWN 1)
READ:UNKNOWN
TO: Jennifer M. Palmieri ( CN=Jennifer M. Palmieri/OU=WHO/O=EOP @ EOP [ WHO ])
READ:UNKNOWN
TEXT:
Moneyline News Hour with Lou Dobbs
Aired February 17, 1999 - 6:30 p.m. ET
President's Attorneys Will Not Ask Judge Wright to
Remove Herself; Selling of Technology Stocks Sends Dow
Industrials and Nasdaq Tumbling
ANNOUNCER: From CNN's New York headquarters, the
MONEYLINE
NEWS HOUR WITH LOU DOBBS.
LOU DOBBS, HOST: Good evening.
If 1999 is to be the year the powerhouse economy
falters, there is no sign of it
yet -- at least in one key sector, the housing market,
which is simply booming.
Builders last month broke ground on new homes at a
breakneck pace, the
highest level, in fact, in 12 years, barreling past any
expectations.
As Charles Molineaux now reports, January's boom may
signal strong
economic growth throughout the year.
(BEGIN VIDEOTAPE)
CHARLES MOLINEAUX, CNN CORRESPONDENT (voice-over): Even
January's blast of normal wintry weather couldn't keep
home construction
from blowing past the forecasts. Economists say
continued strength in housing
is yet another sign the outlook for the overall economy
remains strong.
GARY THAYER, A.G. EDWARDS: Housing tends to lead the
economy by
about a year. The strength in housing we're seeing today
suggests that the
economy should continue to enjoy sustainable growth
throughout this year.
MOLINEAUX: Most of the surge came in the South where
housing starts
jumped more than 22 percent. The number of
ground-breakings rose slightly in
the West but fell more than 25 percent in the Midwest whi
ch was slammed by
snowstorms. Building also dipped in the Northeast.
Nationwide, construction
of single-family homes hit its strongest level in 15
years as the job market
remains strong and consumers enjoyed low mortgage rates,
in part because of
problems overseas.
GARY LEAHY, PRIMARK DECISION ECONOMICS: Investors seeking
safety have tended to buy U.S. assets. That's helped
Treasuries. If more
people buy Treasuries, rates fall, and that helps the
housing market. So
anybody that's wanted to buy a house in the last year
and a half, anybody
that's wanted to refinance a mortgage, in some ironic
sense, can be thankful
that there was this mess in Asia. MOLINEAUX: And there's
no sign the
building boom will slow down. Housing permits, a key
sign of future
construction, were issued at their fastest rate in
almost 13 years.
(on camera): Most economists do still expect some kind
of slowdown in the
U.S. economy later this year but also say the robust
housing numbers suggest
that, if one does occur, it won't be severe.
Charles Molineaux, CNN Financial News, New York.
(END VIDEOTAPE)
DOBBS: That strong housing report, however, did not fuel
a rally on Wall
Street. In fact, the Dow sunk 101 points, closing at
9, 191, on deep concerns
about the future of technology stocks. Not surprisingly,
investors hit the
tech-heavy Nasdaq even harder, which fell 64 points,
losing almost 3 percent,
tonight at 2,248. The root of all these concerns, the
troubling report on revenue
growth at Dell Computer. Dell stock today tumbled
7-3/16. We'll have
complete coverage of today's market action later here on
the MONEYLINE
NEWS HOUR.
American Airlines today put a price tag on its 10-day
pilot sick- out. The
airlines told a federal court in Texas today that it
lost nearly $60 million and at
least $150 million in overall revenue. The pilots' union
claimed the figures to be
inflated. The judge put off any fine against the union
for another two months,
however. Negotiations continued today in the labor
dispute, and while the two
sides are said to be moving closer to agreement, the
airline stressed it won't
give in to all the union's demands.
(BEGIN VIDEO CLIP)
CHRIS CHIAMES, AMERICA AIRLINES SPOKESMAN: You've got to
recognize, if we were to simply give in to the demands
of APA on this case,
we've got other labor groups who would see that as a way
to exert influence
over the company, and we can't manage the company where
we're just giving
in to demands of labor unions every time we turn around.
(END VIDEO CLIP)
DOBBS: American isn't the only airline facing labor
troubles. Eight of the
nation's 10 major airlines are in the midst of contract
negotiations, and tensions
could flare at the smaller commuter airlines.
As Fred Katayama reports, this might not be a pleasant
year for passengers.
(BEGIN VIDEOTAPE)
FRED KATAYAMA, CNN CORRESPONDENT (voice-over): This could
be the year of flying discontentedly for airline workers
and travelers. The
American pilots' sick-out that forced thousands of
flight cancellations could
provoke unionized employees at other airlines to act
militantly.
JOHN PINCAVAGE, WARBURG DILLON READ: It's going to
embolden
the unions at some of these other airlines to use a
similar tactic, and they may
use it in a more refined form, but they clearly have
every opportunity to disrupt
operations at an airline, and I think you're going to
see more of that.
KATAYAMA: Signs of militancy are already on the rise.
Last year, flight
attendants at TWA staged a sick-out, and mechanics at
Northwest staged a
work slowdown. And now confrontation is brewing at Americ
a West. Its
flight attendants are bracing for a possible strike
after turning down arbitration
last week. The issues that America West and the other
major airlines face
range from job security to pay. In addition to American,
pilots are in the midst
of negotiations at Delta. Flight attendants are in
contract talks at Alaska and
five other airlines. Mechanics are negotiating or about
to enter talks at Alaska,
Northwest, TWA, and U.S. Airways, and they have
bargaining power
because, like pilots, these federally-licensed workers
are not easily replaced.
GEORGE HOPKINS, WESTERN ILLINOIS UNIVERSITY: Now good
times have returned, and this is the first cycle of
contracts coming up in the
airline industry, which are wholly within this time when
the airlines have been
quite profitable, and so naturally these employees
expect to share in the
largess.
(END VIDEOTAPE)
KATAYAMA: The focus is on the big airlines now, but
experts say tensions
could flare at computer airlines. As these smaller
airlines grow larger, pilots
who earn as little as $25,000 a year are getting
militant. Two years ago, pilots
for Skyway Airlines (ph), a Midwest carrier, struck for
less than two hours.
They got their contract.
Lou.
DOBBS: Militancy, at least in that case, working.
KATAYAMA: That's right.
DOBBS: Fred, thanks.
Well, labor unrest at TWA helped drive down the
airline's fourth- quarter
earnings, down almost 40 percent. As a result, the
airline plans to cut 1,000
jobs, or almost 5 percent of its work force. TWA hasn't
been profitable since
1988.
Coming up next on the MONEYLINE NEWS HOUR, the ghost of
Paula
Jones. The impeachment trial is ended. The contempt may
have only just
begun. Plus, Hillary's ambition. Can the Clintons afford
it?
(COMMERCIAL BREAK)
DOBBS: His political crisis may be over, but President
Clinton's legal troubles
are clearly not. Tonight, word of the decision by the
president's legal team
apparently throwing him at the mercy of Judge Susan
Webber Wright.
Wolf Blitzer is live at the White House and has the
latest for us.
Wolf.
WOLF BLITZER, CNN CORRESPONDENT: Lou, CNN has learned
that
President Clinton's private attorneys have decided they
will not ask the federal
judge who oversaw his deposition in the Paula Jones
sexual-harassment
lawsuit to remove herself from the case.
Judge Susan Webber Wright had given that option to the
president's attorneys
and to the Jones attorneys only yesterday, saying that
there could potentially
be a conflict because last month House Republican
Manager Asa Hutchinson
did ask her to testify about the deposition in the
Senate trial. Judge Wright
declined but did allow her law clerk to provide a sworn
affidavit. Because of
that potential conflict, she asked both sides if they
still want her to continue on
and oversee this case.
The case, of course, has been settled by $850,000 that
the president provided
to Paula Jones, but, still, there is this lingering
matter of whether or not Mr.
Clinton should be held in contempt of court because of
his misleading
testimony during that January 17th, 1998, deposition.
Even Mr. Clinton's own
lawyers have said that he did not provide the whole
truth during that
deposition.
Now the White House lawyers, the president's private
attorneys have decided
to allow Judge Wright to oversee this matter of a
contempt citation potentially
because, at this point, they assume she will be
responsible and fair and they're
worried about the unknown more than they're worried
about her.
Lou.
DOBBS: That she would be responsible and fair, but also
for them to ask her
to step aside from this case would have had terrific
political overtones, would
it not?
BLITZER: It would have been a huge uproar, something
that the president is
anxiously trying to avoid now as he tries to regain his
political footing.
DOBBS: Wolf Blitzer, thank you very much. Wolf Blitzer
reporting from the
White House.
If President Clinton is fined for contempt of court, it
would merely add to the
enormous legal expenses the Clintons have incurred
during years of scandal,
surely a factor for Mrs. Clinton as she weighs a race
for the Senate that
would be incredibly expensive.
Bill Dorman has the details on the cost of the race and
the family's financial
resources. Bill Dorman with the story.
(BEGIN VIDEOTAPE) BILL DORMAN, CNN CORRESPONDENT
(voice-over): Hillary Clinton is an old pro when it
comes to raising money, at
least for other people. According to the first lady's
office, she took part in 55
fund-raising events in the last 54 days of the 1998
campaign, including seven
for New York's newest senator, Charles Schumer.
According to Federal
Election documents, Schumer spent $16-1/2 million to win
his seat. Loser Al
D'Amato spent $24 million. That makes Hillary's
fund-raising ability for herself
into a critical issue.
SHEILA KRUMHOLZ, CENTER FOR RESPONSIVE POLITICS: That's
not proven, that she will be able to raise money for
herself as well as she's
done for others, because she has no legislative track
record that she can point
to and say, "Look what I've done for your industry, for
your company, for your
community."
DORMAN: She also has no vast personal fortune. The
Clintons' tax filings
show an income of roughly $570,000 in 1997, including
royalties from her book
which they gave to charity. Supporters of the first lady
say a personal fortune
is not a prerequisite for a Senate run.
ELLEN MALCOM, PRESIDENT, EMILY'S LIST: I don't think
there's any
connection with her personal finances and her political
support that she's going
to tap into when she -- if she decides to run for the Se
nate. I think that a lot of
people are very excited about her Senate race and will
respond with their
contributions.
DORMAN: The first lady also faces what could be called
family obligations:
legal bills. According to the president's legal expense
trust, the Clintons have
already spent more than $2 million on attorneys and
still face nearly $4 million
in further legal bills, and that openly covers the
period up to this past August.
(on camera): Next week, we'll hear updated figures on
the president's legal
bills, which some estimate could top $10 million by the
time he leaves office
and which could complicate the future career plans of
his wife.
Bill Dorman, CNN Financial News, Washington.
(END VIDEOTAPE)
DOBBS: The question remains can Hillary Clinton, who
doesn't live in New
York and who never did, run in New York? The MONEYLINE
Briefing
Book shows that the state is a carpetbagger's delight.
The first lady -- or
anyone else for that matter -- need only have purchased
or rented a residence
somewhere in New York by election day. If Mrs. Clinton
did wait until
November 7th, 2000, an unlikely prospect, she qualifies
for the race but could
not vote in it. New York requires voters to reside in
the state for at least 30
days before an election to qualify. Mrs. Clinton would
not be New York's first
well-known carpetbagger. Bobby Kennedy captured a Senate
seat in 1964
after establishing residence just months previous.
And there will be one more vacant seat in the Senate in
the Northeast.
Senator Frank Lautenberg of New Jersey today said he
would not run for
reelection because he did not want to spend the next two
years fund-raising.
New Jersey Governor Christie Whitman, often mentioned as
a possible
Republican candidate for the Senate, today insisted that
Lautenberg's decision
would have no bearing on her own.
Around the world tonight, Israeli diplomatic missions
worldwide are on alert
for possible attacks by Kurds who believe Israel played
a part in the arrest of
their leader, Abdullah Ocalan. In Berlin today, Israeli
security guards shot and
killed three Kurdish protesters who forced their way
into the Israeli consulate.
Prime Minister Benjamin Netanyahu says they fired in
self defense and
reiterated Israel had no role in Ocalan's arrest. The
Kurdish rebel leader was
captured yesterday at the Greek embassy in Kenya. Today,
Turkish
authorities released videotape of Ocalan following his
capture. It shows him
blindfolded and handcuffed to his seat on the aircraft.
The Kurdish violence
prompted the State Department to issue a global travel
warning to Americans.
The statement urged Americans to take special security
precautions while
traveling or living abroad.
Saturday is the deadline for both sides of the Kosovo
conflict to sign a peace
deal. NATO sources say the United States is pushing for
almost immediate air
strikes if Yugoslav President Slobodan Milosevic blocks
a peace deal.
Jamie McIntyre is live at the Pentagon and has the
latest for us.
Jamie.
JAMIE MCINTYRE, CNN CORRESPONDENT: Well, that's right,
Lou.
NATO sources tell CNN that the United States is pushing
for almost
immediate air strikes if Yugoslav President Milosevic
stands in the way of a
peace agreement with ethnic Albanian separatists in
Kosovo by this Saturday
deadline.
To underscore the threat, Pentagon sources say the U.S.
is preparing to move
a dozen F-117 Stealth fighters to Italy as soon as this
week, and sources say
the U.S. also has six B-52 bombers with air launch
cruise missiles on
heightened alert at their base at Barksdale (ph),
Louisiana. That's in addition to
some 220 planes NATO already has standing by in Europe
and on the U.S.
aircraft carrier Enterprise in the Mediterranean Sea.
The United States wants Mr. Milosevic to know that NATO
is serious.
(BEGIN VIDEO CLIP)
JAMES FOLEY, STATE DEPARTMENT SPOKESMAN: The deadline on
Saturday is a real deadline in that time is of the
essence, and President
Milosevic has just a few days to see the light, to see
that it's in his country's
interest as well as in the interest of the people of
Kosovo to not only agree to
the peace -- to the political settlements but to agree
to a peace implementation
force.
(END VIDEO CLIP)
MCINTYRE: NATO Secretary-General Javier Solana could
order the strikes
without further consultations with the 16 NATO nations
if he's persuaded that
Misolevic is the roadblock to peace. Pentagon sources
say the U.S. is
prepared to launch a limited attack of some 80 cruise
missiles from four U.S.
warships in the Adriatic, but NATO planners say such an
attack would have
to be carefully calibrated so that it doesn't drive
Yugoslavia away from the
peace table or, on the hand, prompt Kosovo Albanians to
make a quick grab
for independence.
Lou.
DOBBS: A fine balancing act, Jamie. Thank you very much.
Jamie McIntyre
reporting live from the Pentagon.
When the MONEYLINE NEWS HOUR continues, our coverage of
the Y2K
computer bug. Tonight, fear, greed, and futures, of all
things.
(COMMERCIAL BREAK)
DOBBS: Around the nation tonight, if you don't eat
tomatoes, you probably
should. This week's "Journal of the National Cancer
Institute" reports
convincing evidence that a diet of fresh and processed to
matoes can lower the
risk of cancer, with the most compelling impact on
prostate, lung, and stomach
cancers.
In North Carolina, the Marine pilot charged with the
deaths of 20 people in last
year's cable-car accident in Italy is expected to take
the stand next week in
his court martial. Captain Richard Ashby is accused of
flying his jet too low
and too fast when it cut through the gondola cable.
Day two at the murder trial of an alleged white
supremacist in Jasper, Texas.
John William King is accused of beating and dragging a
black man to his death
last year. Today, King's former girlfriend took the
stand and linked him to the
crime scene. If convicted, the 24-year-old man could
receive the death
penalty.
In our countdown to Y2K and the possible computer
nightmare that could
ensue in 316 days, we turn to Chicago's futures pits
where they have
nicknamed the problem the Millennium Butterfly, and
they're betting that Y2K
fears will send people scrambling for cash on the eve of
the millennium.
Ceci Rodgers has the story from Chicago.
(BEGIN VIDEOTAPE)
CECI RODGERS, CNN CORRESPONDENT (voice-over): The year
2000
computer problem. The mere mention of it instills fear.
JAMES ANNABLE, ECONOMIST, BANK ONE: Y2K is like a meteor
out
there, you know, that we know is out there, and we're
not sure whether it's
going to hit the earth.
RODGERS: But in the low-technology, open-outcry trading
pits of Chicago,
they're betting the Y2K fixes may be too little too
late.
(on camera): Here, where futures are traded on
short-term interest rates in a
huge but little-known market called euro dollars,
traders are speculating on
Y2K. Their bet: The bug will bring the financial system
to its knees as 1999
draws to a close.
(voice-over): How so?
JIM BIANCO, BIANCO RESEARCH: If a hundred million
households go
running to their ATM machines in the last half of
December to take out a
couple of hundred dollars to buy groceries just in case
there's a glitch, it will
cause a problem in the money markets.
RODGERS: Banks will be scrambling in the overnight
market for money to
make sure they have enough cash on hand to cover the
withdrawals. That, in
turn, could send short-term interest rates soaring, perh
aps only for a few days,
but the impact would be felt. Already some futures
contracts traded at the
Chicago Merc have fallen as traders bet on an expected
spike in interest
rates.
PETER YASTROW, VICE PRESIDENT, CANTOR FITZGERALD:
Maybe the chances are very small, but they're real, and
people are scared of
it.
RODGERS: Individuals wouldn't be the only ones hoarding
funds for a
possible Y2K rainy day.
PAUL KASRIEL, ECONOMIST, NORTHERN TRUST: We could see
corporations building up their inventories towards the
end of 1999 through fear
that they won't be able to get goods in. They'll borrow
to do that, and that will
put upward pressure on interest rates as well.
RODGERS: The Federal Reserve says the banking system
will be ready for
any Y2K liquidity crunch.
ANNABLE: It really is a question of how will the public
respond to this. If
everybody wants to convert all their deposits into cash,
there's going to be a
big demand for cash during that period. It is u
nnecessary.
RODGERS: Still, the Fed plans to have an extra $50
billion on hand just in
case.
Ceci Rodgers, CNN Financial News, Chicago.
(END VIDEOTAPE)
DOBBS: Up next on the MONEYLINE NEWS HOUR, meet the new
big
fish in South Florida baseball.
(COMMERCIAL BREAK)
DOBBS: In the business of sports, we'd like to introduce
you tonight to a
multimillionaire you've probably never heard of. That's
because John Henry
has spent much of his career staying out of the media's
glare. No longer. John
Henry is the new owner of the Florida Marlins, an
expansion-baseball team
that won and then quickly lost the trust of its fans.
John Zarrella reports on the new owner in town.
(BEGIN VIDEOTAPE)
JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): You won't
find the multimillionaire owner of a professional sports
team breaking bread
with grade school kids very often.
UNIDENTIFIED STUDENT: Are you one of the players?
JOHN HENRY, MARLINS OWNER: No, I'm the owner. Sorry.
ZARRELLA: But John Henry who recently purchased the
floundering Florida
Marlins baseball franchise is not typical. He won't
reveal his worth, he gives
anonymously to charities, and he's shy.
HENRY: I have avoided the media in my 20 years on Wall
Street. You've
never seen me on MONEYLINE. You've never seen me on
"Wall Street
Week." I've done everything I can to maintain a low
profile and have privacy
in my life.
ZARRELLA: After spending $150 million for the team,
Henry says he had to
step forward, going so far as opening the team's
financial books to the public.
After winning a World Series, the team was gutted and
put up for sale. Henry,
who made his millions as a commodities trader on Wall
Street, says he decided
to step up to the plate and bid for the team simply
because it was the right
thing to do.
HENRY: I've been an investor most of my adult life, and
you -- when you
make an investment, you're always more interested in the
future than the past.
ZARRELLA: In the present, Henry says, he's having a lot
of fun.
UNIDENTIFIED STUDENT: How does it feel to coach a team?
HENRY: Well, actually, I was a first-base coach in a
charity game the other
night, and I felt a little foolish because I didn't know
what I was doing. I'm just
a rookie. I just bought the team.
ZARRELLA: And the headaches to go with it.
John Zarrella, CNN, Miami.
(END VIDEOTAPE)
DOBBS: Coming up next on MONEYLINE, a sharp drop for
Wall Street as
technology stocks tumble yet again. We'll have a full
report, and I'll be talking
with two influential strategists about where a nervous
market from here.
Anxious investors today punished Dell Computer shares.
We'll tell you what
Michael Dell plans to do about that. Plus, J. Peterman's
desperate search for a
buyer. This time not even Jerry Seinfeld can help.
(COMMERCIAL BREAK) DOBBS: Another punishing session for
stocks on
Wall Street. The Dow Jones industrials tumbled 101
points, losing 1 percent,
erasing an earlier 68-point gain. And the Nasdaq lost
nearly 3 percent. The
culprit -- another sharp sell-off in technology stocks.
Dell shares, today, fell 7
3/16 and accounted for 12 percent of today's loss for
the Nasdaq composite
index.
Rhonda Schaffler reports.
(BEGIN VIDEOTAPE)
RHONDA SCHAFFLER, CNN CORRESPONDENT (voice-over): The day
started off pretty bleak. Traders ditched technology
stocks right at the opening
bell, disappointed revenue growth at Dell and Hewlett-
Packard. The Dow
industrials held on to modest gains through most of the
trading day, only to hit
a wall of selling in the last hour, prompting one trader
to say, we're coming
unglued. The Dow Jones industrial average spiraled 101
points on the day, a
loss of just over one percent. Much of that selling on
the Big Board and
Nasdaq was concentrated in technology issues.
JOHN MANLEY, SALOMAN SMITHBARNEY: What drove the S&P in
the first month of the year was technology. We looked at
the sectors, there
are 12 sectors, two of them are technology related,
those two sectors
outperformed the other 10, were under-performers. So
it's been all technology
on the way up, and they're sort of giving it back a bit
here, right now.
SCHAFFLER: Lucent's two-for-one stock split failed to
spark investor
interest, as Big Board tech issues added to the selling
pressure. And that
pressure was even more intense on the Nasdaq. The
composite sliding just
under 65 points, a near three percent decline, one
market watcher says the
selling may not be over.
PETER CANELO, MORGAN STANLEY DEAN WITTER: You broke a
very important shelf of support on the Nasdaq, and
you're beginning to see an
inability of the market to rally. In the past week we've
rallied strongly a
number of times, and each time the market has unable to
hold a rally. And that
suggests to me that we have to go lower.
SCHAFFLER: A range of technology companies from Dell to
Sun
Microsystems to Prodigy fell sharply.
(on camera): Today's slide was enough to leave the Dow
industrials flat on the
year, the S&P 500 is now down slightly, and the Nasdaq
composite, which
surged better than 14 percent in January, has given most
of that back. It's up
only 2.5 percent since the start of 1999.
Rhonda Schaffler, CNN Financial News, New York.
(END VIDEOTAPE)
DOBBS: Dell stock, today, the most actively traded by
far on the Nasdaq; a
whopping 112 million shares. That is the third-largest
volume ever traded on a
Nasdaq stock, and almost six times Dell's average daily
volume of 18.5 million
shares. Dell's sharp decline, today, caps a
two-week-long slump for what is
one of Wall Street's best-performing stocks. The
sell-off has erased more than
$30 billion of Dell's market value since the stock hit
an all-time high two
weeks ago.
Bruce Francis has our report.
(BEGIN VIDEOTAPE)
BRUCE FRANCIS, CNN CORRESPONDENT (voice-over): For
Michael
Dell, Hell hath no fury like a market scorned. Dell has
seen his personal
fortune whither by $4.2 billion in three trading
sessions, a paper loss 14 times
the revenue shortfall that caused the disappointment.
But when the market
gets tough on Dell, Dell gets tough on prices, hinting
in an interview with CNN
Financial News that more aggressive price cutting is a
weapon that the
company might use to recharge growth, instead of
focusing on profit margins.
MICHAEL DELL, CHAIRMAN & CEO, DELL COMPUTERS: If we'd
taken our margins down, we might have had a little bit
more growth, and that
is certainly the sort of outlook we see going forward.
But certainly, you can
expect that Dell will be very aggressive in pursuit of
growth and share.
FRANCIS: That might not be that easy. Last year at this
time, overbuilding at
Compaq forced an industry wide fire sale that, in turn,
decimated profits for
just about everyone but Dell. But this year, Dell's
rivals have fixed those
problems, according to analyst Dan Niles, whose warning
last Friday helped
knock 12 percent off Dell's stock in one day.
DAN NILES, BANCBOSTON ROBERTSON STEPHENS: I think you're
going to see them priced more competitively. I think
you're going to see IBM,
and Compaq, and HP, now that they've solved a lot of
their issues, price much.
more competitively, to make, you know, to keep share on
their side. And, so I
think it's going to be a much more tough environment for
Dell to compete in
going forward.
FRANCIS: While Niles doesn't recommend buying Dell until
it falls about
another 12 percent, Internet message boards on Yahoo!
and Motley Fool had
plenty of investors saying that they were eager to pick
up Dell at prices far
below the recent peak. That enthusiasm was fueled by
encouragement from
some analysts.
ART RUSSEL, TECHNOLOGY ANALYST, EDWARD JONES: We have
a buy rating on Dell shares, and if you're investing in
the long term, you take
advantage of these pullbacks to add to your positions.
(END VIDEOTAPE)
FRANCIS: The bottom line: It's going to be hard to fix
Dell, since most
analysts agree with Dell himself, that the business is
far from broken. It's just
that rivals are getting better, and some trends, like
rapidly falling prices for
computer parts, are no longer on Dell's side -- Lou.
DOBBS: And this against Intel's report that PC demand
remains strong. How
does one square all this up?
FRANCIS: You see Compaq and other rivals doing better.
Last year, they
were really not going well
DOBBS: And moving into Dell's space?
FRANCIS: Exactly, and moving into Dell's space. The
industry, as a whole,
seems to be doing better. Dell's still growing, just not
quite as fast.
DOBBS: OK, Bruce, thank you.
We'll have much more on today's technology rout, later
here in
MONEYLINE.
And in Washington today, at the Microsoft antitrust
trial: Compaq coming to
Microsoft's defense. A Compaq executive said Microsoft
threatened to cancel
the PC maker's Windows license, but not because of fear
of competition from
Netscape.
Steve Young reports.
(BEGIN VIDEOTAPE)
STEVE YOUNG, CNN CORRESPONDENT (voice-over): Compaq
executive John Rose told the court Microsoft was within
its rights when it
threatened to pull Compaq's Windows license in May 1996.
The government
says Microsoft made that ultimate threat because Compaq
put Netscape's
web browser on the Windows desktop of Compaq's consumer
PCs.
Rose said Compaq agreed verbally to keep icons for
Microsoft's web browser
and Microsoft Network on the Compaq desktop, just a few
weeks before
Compaq signed a written contract with America Online to
feature AOL. Rose
said Microsoft threatened his company, not because it
installed the Netscape
icon, but because it deleted the Microsoft icons as part
of the AOL
agreement.
Government lawyer David Boies attacked Rose's testimony
as revisionist
history. He showed e-mails indicating many key Compaq
executives didn't
know about the verbal deal, even though several of them
were involved in both
negotiations. Rose said the conflict occurred because of
"bad communication"
inside Compaq. Earlier, Microsoft executive Brad Chase
charged that AOL,
which is buying Netscape, has delayed dropping
Microsoft's web browser to
bolster the government's case.
Chase said, based on a recent Netscape filing with the
government, he
expects AOL will switch back to Netscape, giving it
nearly 70 percent of the
browser market, leaving Microsoft with the rest.
DAVID BOIES, LEAD GOVERNMENT ATTORNEY: What it does say
is
that AOL may make Netscape a stronger competitor, and if
that is true, that's
good. WILLIAM NEUKOM, MICROSOFT GENERAL COUNSEL: What
we've got is a battle royal on the technology of giving
users access to he
Internet, so they can get content, and they can do
commerce out there, and
communicate out there.
(END VIDEOTAPE)
YOUNG: The government says Microsoft is just trying to
change the subject.
It says the case is still about how Microsoft uses the
monopoly power of
Windows to keep other companies from competing on the
merits of their
technology.
Lou.
DOBBS: Steve, thank you. Steve Young reporting tonight
from Washington.
Coming up next here on MONEYLINE: plunging technology,
nervous
investors. I'll be talking with two leading market
strategists about Wall Street's
uncertain future. They will tell us, with certainty, wha
t it's all about.
(COMMERCIAL BREAK)
DOBBS: In tonight's MONEYLINE Focus: Technology stocks.
Today's big
losses knocked the Nasdaq composite into a correction.
Tonight, it is down 10
percent from the record high set just 11 sessions ago. J
oining me now to talk
about this technology retreat: from Boston, Ned Riley of
BancBoston, and
here in our studios in New York, Brian Finnerty of C.E.
Unterberg Towbin.
Gentlemen, good to have you here.
NED RILEY, BANCBOSTON: Good evening, Lou.
BRIAN FINNERTY, C.E. UNTERBERG TOWBIN: Hi, Lou.
DOBBS: Let me begin with you, if I may, Ned. Is this
correction something
that you see bottoming out quickly in terms of the
Nasdaq, or are we in the
midst of the something?
RILEY: I think we're in the midst of the something. It's
been a long time
coming. But clearly, with the technology leadership
contributing in a lot of the
performance in 1998 -- excuse me -- I think we've got a
way to go in this one
yet. There's a domino effect that I think will
eventually hit the rest of them.
DOBBS: A domino effect. That has ominous overtones.
RILEY: When you look at what Mr. Dell had said about
undercutting the
market and doing some price-cutting, I think you've got
to look at more trouble
ahead.
DOBBS: Brian.
BRIAN FINNERTY, C.E. UNTERBERG TOWBIN: Well, Lou, I
think when
you get breaks in great companies, like you had in Dell,
and you seem to have
had -- Micron and Intel, per se, it's usually a good
time to buying them for the
long run. We may be in the midst of the something. We
may have a little more
to go. I think the 10 percent pullback in the Nasdaq is
probably pretty much
the most of what you're going to see.
DOBBS: Now you called it a pullback, Brian. I
constructed it as a correction
following a somewhat more conventional, traditional
definition. Would you
agree that this is a correction?
FINNERTY: Well, I guess 10. percent is certainly a
correction. When we had
that 20 percent one last summer and into the Fall, it
got pretty scary and if
we're only halfway through this one, then it's going to
get a lot more scary. I
don't think that's going to be the case. I think you're
going to see some bottoms
in here because, Lou, one thing I've been noticing: it
seems to me the money is
not really leaving the market. It's sort of rolling
around, that group rotation
thing, and searching for new places to make money and in
my mind here, the
name of the game is still earnings and it's still
growth. I think the money will
have to come back to that momentum, growth earnings
which is the large-cap
tech stocks.
DOBBS: Ned, your view?
RILEY: Well I think part of that is right, but it's a
question of growth at what
price. These stocks are still selling at between 55 and
70 times earnings.
Clearly, this has been a pyramidal leadership type
environment where -- I call
them the magnificent seven -- the seven big technology
companies have
contributed over a third of the performance. I have to
say going back to
October lows, we've seen these stocks still appreciate
at 50 or 100 percent,
and even though we've had a pullback, it's not a major
pullback, considering
the kind of move we've had since the October lows.
DOBBS: Yes, Brian.
FINNERTY: And on top of that, to actually agree with Ned
to a certain
extent, the small caps, the Russell 2000 is down
seven-plus percent for this
year after a miserable under-performance for the last t
wo years. So again, the
advance has been narrow and the magnificent seven is a
good term. So again
that's true, but I do think the money will come back
here because of the
liquidity.
DOBBS: The liquidity -- and you would advise investors
to be in here buying,
Brian?
FINNERTY: I would in here, yes.
DOBBS: Ned, how about you?
RILEY: I think there's still more risk. Clearly, we saw
some broadening of
leadership today which encouraged me. Financial stocks
did receive some of
the moneys. But this has been a money flow into two or
three groups. It's
been health care, technology and Internet. We've asked
so few to carry so
many so far for a long period of time. I'd like to see
them digest a little bit
further.
DOBBS: Ned Riley, Brian Finnerty, thank you both,
gentlemen for being with
us here on MONEYLINE.
FINNERTY: Thank you, Lou.
RILEY: Thanks.
DOBBS: Coming up next on MONEYLINE, the greatest
transformation in
the history of Heinz, unless you happen to be a Heinz
employee. A food
company remakes itself, next.
(COMMERCIAL BREAK)
DOBBS: Three major hurdles cleared today by the $48
billion merger of
AT&T and TCI. The FCC approved the deal, as did
shareholders of both
companies. It took Wall Street months to warm up to this
deal.
And as Katharine Barrett reports, it may take even
longer for investors to see
a payoff.
(BEGIN VIDEOTAPE)
C. MICHAEL ARMSTRONG, CHAIRMAN & CEO, AT&T: The merger
proposal has carried.
(APPLAUSE)
KATHARINE BARRETT, CNN CORRESPONDENT (voice-over): With
that, AT&T and TCI's goal of bringing soup-to-nuts
communications services,
through one line into American homes, is a nano-step
closer to reality. The
two companies want to bring one brand of telephone
calling, Internet access,
and entertainment to consumers ahead of the competition.
UNIDENTIFIED MALE: AT&T does have plans in place to be
able to offer
that combined test package in 10 test markets by the end
of this year. Then
they plan to have most of the other markets rolled out by
the end of 2000.
BARRETT: AT&T still must spend two billion dollars this
year alone to
up-grade TCI's cable system to handle the kind of
high-tech data and voice
traffic it envisions. Some think it will cost much more.
BRUCE ROBERTS, DRESDNER KLEINWORT BESNO: It's going to
take
a least three to four years for AT&T to take that cable
network and make it
as robust and reliable as people want it to be. I mean
most people today, if you
ask them, would they want to have local telephone
service over the cable line,
given the experience they've had with cable outages are
probably going to say
no. Think about that challenge. The telephone network --
there's no issue
about that. People know when they pick up their phones
more or less they're
going to get a dial tone.
BARRETT: AT&T stock sagged after the TCI merger was
announced in late
June, but since September, telephone has rung up gains
of almost 70 percent.
But Roberts calls AT&T stock a risky bet at this price.
Instead, he favors
regional Bell competitors like Bell Atlantic, Ameritech
and GTE.
(END VIDEOTAPE)
BARRETT: Some consumer groups are concerned about TCI's
lock on cable
lines into one out of three U.S. households. Add that to
AT&T's partnership
with CNN's parent, Time Warner, and you have what one an
alyst calls a
"competitive gorilla." But federal regulators approved
this deal today because
of what they call its "competitive benefits to
consumers," especially in local
phone service. Still the Consumer Federation of America
calls that "wishful
thinking" -- Lou.
DOBBS: And it's a done deal.
BARRETT: All but.
DOBBS: All right. Katherine, thanks.
Topping tonight's "MONEYLINE Movers": the stock that's
replacing TCI on
the S&P 500 index, AmSouth. Shares of the Alabama-based
bank climbed
3-13/16. Medtronic, the third most active stock on the
big board today losing
six dollars a share. The medical devices maker warned
Wall Street
third-quarter earnings will fall short of expectations.
The company blames
weak revenues at its heart division. And Public Service
company of North
Carolina, the biggest point gainer on the big board
today, jumping 6-11/16.
Scana, an electric, gas utility, is buying the company
for nearly $700 million in
cash and stock.
A rare glimpse today inside the portfolio of Warren
Buffett. The Nebraska
billionaire, known for discovering undervalued
companies, says he owns a
seven percent of Great Lakes Chemical. The company makes
specialty
chemicals; has a market cap of more than two billion
dollars. Buffett also
holds an eight percent stake in TCA cable, which
operates cable systems in
the west and Midwest. Its market cap, just under two
billion. Shares of Great
Lakes surged 4-5/8; TCA Cable up 6-3/8 -- profitable
look inside the portfolio
of Warren Buffett today.
H.J. Heinz calls today's restructuring the greatest
transformation in its history.
The maker of some of the most popular food brands in the
world is closing
several of its factories, laying off up to 10 percent of
its work force. The stock
today up only slightly.
Peter Viles has the report.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT (voice-over): The company
that
made Weight Watchers a national brand is going on a
serious diet. H.J. Heinz
plans to close 15 to 20 factories, lay off up to 4,000
workers worldwide, and
sell off the Weight Watcher classroom program.
Wall Street barely blinked because a brutal business
climate has made
cost-cutting the norm in the food business. BILL MAGUIRE,
WASSERSTEIN PERELLA SECURITIES: It forces companies
large and
small, even companies $9 billion in sales size, like
Heinz, to continue
restructuring programs. I don't know of a company in the
food industry that
isn't currently participating in a restructuring story
of one kind or another.
VILES: Quaker Oats, General Mills, Kellogg and Campbell
Soup have all
restructured or cut jobs in the past year. The problems
are industry-wide:
Investors expect double-digit profit growth, but overseas
expansion has stalled
and the domestic industry is mature, which means weak
revenue growth. And
powerful retail outlets and picky consumers have kept
prices low.
Heinz hopes to save $200 million a year and use it to
rebuild an advertising
budget that was cut back sharply in the early '90s.
WILLIAM LEACH, DONALDSON LUFKIN & JENRETTE: The legacy of
Heinz's previous CEO, Tony O'Reilly (ph), was one to
some extent of
reducing marketing spending. If you look at the last
decade, when you look at
domestic media spending, Heinz pretty much decimated
their budget. Famous
campaigns they had like Charlie the Tuna and Morris the
Cat basically just
disappeared.
VILES: The company didn't say whether those campaigns
will be back, but it
did hint that it may soon be singing the praises of
ketchup on eggs and even
ketchup on potato chips.
Peter Viles, CNN Financial News, New York.
(END VIDEOTAPE)
Coming up next on MONEYLINE, J. Peterman, Seinfeld
satirized him, but
there is nothing funny about the problems now facing the
catalog retailer. That
story is next.
(COMMERCIAL BREAK)
DOBBS: Finally tonight, the company made famous on a
sitcom has nothing to
laugh about tonight. A bankruptcy judge has given the
upscale retailer J.
Peterman, made famous on the "Seinfeld" show, less than
a week to find a
buyer or liquidate.
Tony Guida has more.
(BEGIN VIDEOTAPE)
TONY GUIDA, CNN CORRESPONDENT (voice-over): John
Peterman is
in trouble because his financial reality doesn't match
his marketing dreams.
JULIA LOUIS-DREYFUS, ACTRESS, "SEINFELD": You mean?
JOHN O'HURLEY, ACTOR, "SEINFELD": Yes, I'm J. Peterman.
GUIDA: The "Seinfeld" show's J. Peterman, eccentric and
irrational, probably
didn't know enough to come in out of the rain. The real
J. Peterman walked
right into a business storm he could not weather.
Peterman's catalog sales collapsed, dropping from about
$67 million in 1997 to
around 35 million last year. At the same time, he began
an ambitious and
expensive expansion into retailing with sales proj
ections that were, according
to two sources with access to the numbers, outlandish.
RICK GALLAGHER, PUBLISHER, "STORES" MAGAZINE: One of the
things that happened with J. Peterman is that they took
themselves too
seriously. Maybe they watched too many "Seinfeld"
episodes. They got a lot
of multimillion-dollar advertising, expanded too fast.
And the problem is their
merchandise was always quirky, always high-priced.
GUIDA: According to the sources, Peterman's projection
for sales in his New
York store were more than $1,100 a square foot. For San
Francisco, the
projection was even higher -- $500 a square foot is con
sidered excellent in the
retail business.
Peterman confirmed his catalog sales were -- quote --
"soft," but he blamed
his company's peril on his principal lender. Peterman
said his banker panicked
and cut its line of credit.
Despite all this, Peterman is unwilling to surrender,
which is consistent with his
reputation as a maverick. He spoke of it in an interview
two years ago with
CNN Financial News.
JOHN PETERMAN, CO-FOUNDER, THE J. PETERMAN CO.: I don't
listen a great deal to experts because they always have
all the reasons why
you can't do things.
GUIDA (on camera): Peterman faces next Tuesday's
deadline still optimistic.
"We're in the bottom of the 9th inning, trailing by six
runs," he told me, "but
sometimes you win those games."
Tony Guida, CNN Financial News, New York.
(END VIDEOTAPE)
DOBBS: Well, that's the bottom line for tonight. We
thank you for being with
us.
Be sure to start your business day tomorrow morning with
"BUSINESS
DAY." Tomorrow's guest the chief financial officer of
Intimate Brands, the
company behind Victoria's Secret. That's 6:00 Eastern,
right here. on CNN.
Good-night from New York. "CROSSFIRE" is coming up next.
END
RECORD TYPE: PRESIDENTIAL (NOTES MAIL)
CREATOR: Mark A. Kitchens ( CN=Mark A. Kitchens/OU=WHO/O=EOP _WHO ])
CREATION DATE/TIME:19-FEB-1999 10:43:07.00
SUBJECT: FOX Special Report, February 18, 1999
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TEXT:
FOX SPECIAL REPORT WITH BRIT HUME
Aired on February 18, 1999
SNOW: As the Kosovo peace talks stumble along toward a Saturday
deadline, pressure is building for the parties to settle -- or else. Once
again, the U.S. is promising swift NATO action against the Serbs, a vow
that could place American and other pilots in harm's way. For the latest
on the situation, here's our senior White House correspondent, Jim Angle.
Jim?
(BEGIN VIDEOTAPE)
JIM ANGLE, FOX NEWS (voice-over): With the Saturday deadline fast
approaching, Serbian leaders are still resisting a Western peace plan for
Kosovo, but they try to sound upbeat anyway.
REPORTER: Are you fairly optimistic?
UNIDENTIFIED SERBIAN OFFICIAL: Of course. (INAUDIBLE) always do.
ANGLE: The Clinton administration and NATO say Serbs will either
agree or face NATO air strikes. And Secretary of State Madeleine Albright
says she personally warned Serbian leader Slobodan Milosevic.
MADELEINE ALBRIGHT, SECRETARY OF STATE: He should understand that if
air strikes occur, they will be -- he will be hit hard, and he will be
deprived of the things that he values.
ANGLE: The Clinton administration is now sending an additional 51
warplanes to an attack force in Europe, including F-117 stealth fighters,
bringing the total to 260 American aircraft, a little reminder to Mr.
Milosevic.
ALBRIGHT: I think he understands that this is a key moment in terms
of the future of the former republic of Yugoslavia.
ANGLE: The fighting in the region between ethnic Albanian guerrillas
and Serbian forces has destroyed villages and killed innocent civilians,
some in massacres documented by international observers. At talks in
Rambouillet, France, Western negotiators are pressing for two things:
self-rule for Kosovo and a NATO peacekeeping force to stop the bloodshed.
The Clinton administration has said it would send some 4,000 American
troops to participate in this peacekeeping force, similar to the one now
in Bosnia.
But Russia is vigorously opposed to that idea, and Russian president
Boris Yeltsin complained about the threat of force during
a meeting with two European leaders at the Kremlin.
BORIS YELTSIN, RUSSIAN PRESIDENT (through interpreter): I gave
Clinton my opinion on the phone and in writing that we won't allow that to
happen. We won't let Kosovo be touched.
ANGLE: Kremlin officials first said that call was made Wednesday,
but later changed it to ``recently."
(END VIDEOTAPE)
But American officials say there was no recent phone call, that the
two men haven't had a phone conversation since before New Year's, and no
conversation in detail about Kosovo since last fall. In fact, officials
say, Yeltsin and President Clinton haven't had any communication at all
since the funeral of King Hussein some 10 days ago. Nevertheless, they say
the do understand Yeltsin's long-standing position and opposition against
the use of force. Nevertheless, officials here say NATO will do what it
has to do to end the bloodshed in Kosovo.
Tony?
SNOW: OK, Jim. So we agree to disagree with Boris Yeltsin. Is there
any strategy for trying to calm him down?
ANGLE: Well, you know, what's odd about this, Tony, is that the
Russian government and other Russian officials have been pressuring the
Serbs to come to an agreement. They have indicated that they would even
participate in a peacekeeping force, which the Serb forces, of course, are
vigorously against. So it's odd that Yeltsin would take this position.
The funny thing about it is that no one can really figure out what
he was thinking. He did talk to the secretary of state a couple of weeks
ago and could have confused that, I suppose, with a conversation with the
president. But as experts look at this, they're wondering what was in
Yeltsin's mind, and figure there was one of two things. Either he thinks
he talked to the president, or he knows he didn't and just decided to say
it and say "What the heck. Maybe no one will say anything." Either way, o
ne expert said today, it is not a good commentary on Boris Yeltsin's state
of mind.
SNOW: OK, Jim.
ANGLE: Tony?
SNOW: Jim, thank you.
As you saw earlier in Wendell Goler's report from New Hampshire, the
largest newspaper in the Granite State, the ``Manchester Union Leader,"
was about as friendly with the president as Boris Yeltsin was. It greeted
Mr. Clinton with the headline, ``Mr. President, you're a disgrace!" Not
exactly the warmest welcome for the ``Comeback Kid," but neither was the
language in a front-page editorial by publisher Nacky Loeb. Quote, "There
is no reason to respect a man who's shown so little respect for the
people, the office and the country. He is a disgrace. The sooner he leaves
New Hampshire, the better."
Joining us now from WMUR-TV in Manchester is the editor-in-chief of
the "Union leader," Joe McQuaid.
Mr. McQuaid, welcome.
JOE MCQUAID, "MANCHESTER UNION LEADER": Hi, Tony.
SNOW: So friendly words for the president. Any response from the
White House?
MCQUAID: Nothing from the White House. Quite a bit of response from
readers and people around the country.
SNOW: And -- come on. You got to tell me what the response was.
MCQUAID: Well, unscientifically measured, we got over 100 phone
calls and emails today, got about a dozen cancellations of the paper. And
my executive editor estimated that the calls and emails were running about
60-40 favorable to the president and unfavorable to ourselves.
SNOW: That's interesting.
MCQUAID: We
SNOW: Go ahead.
MCQUAID: No, interesting comments. The ones in favor of the
president were really more that you should respect the office. And we
tried to point out in the editorial that this is the fellow who hasn't
respected the office. And those in favor of us were complimentary for
having the courage of our conviction.
SNOW: Well, let's talk about how all this impacts politics in the
year 2000. The conventional wisdom is impeachment hurts Republicans.
What's your sense?
MCQUAID: You know, I saw your set-up with President Clinton speaking
earlier today and how he wished that the political I think he used the
term ``energy" -- that he had felt up here seven years ago could be
transmitted to the country. I think the political energy has gone out of
the country in large measure because of what Clinton did in Washington and
the whole response to it. And I think it's going to be very interesting to
see if anybody
can relight the fire of the body politic. I think that's his legacy for
the year 2000.
SNOW: Carl Cameron hinted earlier in the broadcast that Bill Bradley
may have more support in the state, at least among political operatives,
than people would otherwise have expected. Do you think Bradley could
surprise people with his showing?
MCQUAID: I'm not sure. I think he could. He's got a couple of names,
which escape me at the moment, but they haven't all signed on with Al
Gore. Bradley is not a charismatic guy, but maybe they're not looking for
charisma this time. Maybe they're looking for candor and somebody who's
going to have some convictions and stick to them on both sides of the
fence.
SNOW: Joe, we're going to take a break in a minute. We're going to
talk to you on the other side of it. But as we get ready to go to the
break, I want to get a couple of quick summaries from you. Bob Smith --
how long is he going to last?
MCQUAID: Not long at all. I don't know if he'll make it out of lowa
to come back home to New Hampshire.
SNOW: Really? You think -- people there are not happy with Bob
Smith's running?
MCQUAID: They're -- before it was unhappiness that there might be
some jeopardy to the primary, and now it's more "What is he doing?" I
don't think he's going to have any effect one way or the other on the
primary. I think he should he should get out and help a candidate with
a stronger potential than he.
SNOW: John Kerry.
MCQUAID: The guy next door. I think they get him confused with Bob
Kerrey.
SNOW: OK.
MCQUAID: We do. I can't spell his name, Tony.
SNOW: It doesn't have an "E" in it
MCQUAID: Thank you.
SNOW: neither Bob nor Kerry -- I mean John nor Kerry.
MCQUAID: It's like scotch whiskey, right?
SNOW: That's right.
MCQUAID: OK.
SNOW: OK, Joe. Hang on. We're going to take a quick break for some
news. After the news, we'll be back with more of the editor of the
`Manchester Union Leader," Joe McQuaid.
(18:27)
(COMMERCIAL BREAK)
SNOW: Welcome back to SPECIAL REPORT. I'm Tony Snow, in for Brit Hume.
And I'm joined by Joe McQuaid, editor-in-chief of the ``Manchester
Union Leader," the largest and most influential newspaper in the state of
New Hampshire.
Joe, your newspaper's especially influential when it comes to the
GOP. You mentioned before the break you think that the sort of pop has
gone out of American politics. You see anybody in the Republican field
early on who could reinvigorate it?
MCQUAID: We're not making any endorsements, so don't take this the
wrong way. I think John McCain is going to be packaged and have the image
of somebody even though he's, in fact, a Washington insider, but I
think he's going to be packaged as somebody who is a little rough around
the edges and goes against the grain. He's got Warren Rudman working for
him, who's a pretty savvy operator. up here, and I think he'll be
interesting, and so will Forbes.
SNOW: Forbes will spend a lot of money. George Bush, the president,
never did all that well in New Hampshire. He won, but Pat Buchanan got 38
percent of the vote in 1992. The question, George W. Bush, one of the few
mentioned contenders who hasn't been to the state -- do you see any
excitement in the Granite State for him?
MCQUAID: I haven't seen any operational level in the Granite State
for him, which is kind of surprising, if he's, in fact, going to get into
the race. But I guess he's had a couple of people down to Texas to talk
about politics, and he's had this channel 9, a TV station, down there. I'm
not sure what his strategy is going to be. There was some concern early on
that if Bob Smith had some traction, that Bush might even bypass --
horrors New Hampshire and say that that's going to the favorite son. But
Smith has done so poorly in the poll that I don't think that's going to
be a problem.
Can George Bush, the younger, catch fire up here? Perhaps. Mrs. Dole
was up here last week, you know, and was, I thought, dreadfully dull in a
speech to a huge crowd, surprisingly dull for her.
SNOW: Well, let's talk about the issues that you think are going to
be necessary to not only generate excitement but maybe even get
a Republican to win the presidency in the year 2000. What do they need to
do? What do they need to talk about?
MCQUAID: Well, they have to have a pretty clear, coherent message
and stick to a couple of basic themes, which I think have to include, from
our perspective, at least, the moral ones. I think there's certainly been
a moral vacuum in Washington these days, and somebody's got to have the
courage to speak out on that, and they've got to not only talk the talk,
but really say how they're going to cut back on government. We've been
trying since, what, the '80s with Reagan and the Education Department and t
he National Endowment of the Arts, with no success. So if they're going to
get conservatives, they're going to have to do that.
SNOW: Joe, when you look at these candidates, do you ever despair at
how many of them seem to have pre-packaged messages? In all the time that
you've been looking at these, has it ever been any worse in terms of
politicians not taking any chances?
MCQUAID: There's there may be fire in their bellies, but there's
not a lot of fire in the body politic. A Reagan comes along once every
half century, but despair's not the word. I don't know. Dejected, I think,
is the word, that there's no real, great enthusiasm out there
SNOW: Is it
MCQUAID: for a candidate.
SNOW: Is it conceivable that the ``Manchester Union Leader" could
endorse ``none of the above" in the year 2000?
MCQUAID: I don't think we're going to retire, as Paul Weyrich
suggests. I think you've got to stay in there and keep fighting.
Interesting point on the Clinton side tonight, Tony. As late as this
afternoon, we had somebody call over to the Democratic Party headquarters
to inquire about tickets. And apparently, you could still get all you
wanted. So he may be the "Comeback Kid," but I don't know if everybody's
coming back to see him tonight.
SNOW: OK. Joe McQuaid, editor-in-chief of the ``Manchester Union
Leader," thanks for joining us tonight.
MCQUAID: Nice to talk to you.
SNOW: Are term limits
(18:36)
(COMMERCIAL BREAK)
Political Headlines
SNOW: Could voluntary term limits, a key part of the ``Contract with
America" in 1994, come back to haunt the GOP? Nine Republican House
members have pledged that the 1998 election would be their last, and some
now may be having second thoughts as the party fights to hold onto a slim
majority in the House of Representatives. FOX NEWS correspondent Julie
Kirtz reports.
(BEGIN VIDEOTAPE)
JULIE KIRTZ, FOX NEWS (voice-over): Congressional term limits
supporters consider Republican George Nethercutt their poster boy, and
this week they put up a billboard in his home state of Washington to make
sure he knows it. Nethercutt was elected to Congress by beating the
powerful Speaker of the House, Tom Foley. He promised voters he would only
serve in Congress for three terms. But with his self-imposed exit date
closing in, Nethercutt is reconsidering.
U.S. REPRESENTATIVE GEORGE NETHERCUTT (R-WA): I don't know what my
plans are going to be. I've -- I've been here in Chuwila (ph) and I've
been called on, people giving me their best advice, and telling me whether
they want me to continue to serve or not.
TELEVISION COMMERCIAL: It's time for term limits, time for leaders
we can respect.
KIRTZ: A group called U.S. Term Limits announced a $20 million
campaign aimed at making sure Nethercutt, eight other House Republicans
and one House Democrat keep their pledges to leave office in 2000.
PAUL JACOB, U.S. TERM LIMITS: Voters, we have found, are very, very
interested in whether the motivation for someone to come to Washington is
to cash in on a career and be a career politician or to come for a short
period of public service, and to serve as a citizen legislator.
KIRTZ: That viewpoint was one of the centerpieces of the GOP
Contract with America," which helped Republicans take control of
Congress. But now Republicans are anxious to hold onto their slim six-seat
majority in the House. A spokesperson for the National Republican
Congressional Committee says, If we hear even a rumor that a member is
not running for reelection, we're on their case. Obviously, it's in our
best interest to hold onto Republican incumbents, regardless of whether
they took the term limit pledge or not."
Still others say term limits for either party are a mistake.
VIC FINGERHUT, DEMOCRATIC STRATEGIST: I think it is foolish. First
of all, I think it's undemocratic. I think people have the right to elect,
to reelect and reelect again whoever they want.
KIRTZ (on camera): Only one House Democrat has promised not to run
again in 2000, but Republicans could lose up to nine members if they all
keep their pledge. Advocates of term limits accuse Republicans of paying
lip service to their cause now that it could be used against them.
In Washington, Julie Kirtz, FOX NEWS.
(END VIDEOTAPE)
SNOW: Across the country, prosecutors, defense attorneys and law
enforcement officials are taking notice of a recent appeals court ruling
from Virginia. A panel of judges declared that some confessions can be
used in court even if police didn't read the defendant his or her rights.
A likely next stop for this legal hot potato: the U.S. Supreme Court. FOX
NEWS correspondent David Shuster has the story.
(BEGIN VIDEOTAPE)
DAVID SHUSTER, FOX NEWS (voice-over): Almost every American and
every police officer knows what's going to happen when this purse-snatcher
is finally arrested.
LT. JOSEPH COX, U.S. PARK POLICE: You have the right to remain
silent. You are not required to say anything to us at any time or to
answer any questions. Anything you say can be used against you in court.
SHUSTER: The so-called ``Miranda warning" was first established by
the Supreme Court 33 years ago, but last week an appeals court in
Richmond, Virginia, placed the historic ruling in jeopardy. The panel
decided that a man's confession for robbing this First Virginia bank could
be used against him even though police had not yet read him his rights.
The court relied on an obscure law passed by Congress in the late 1960s.
SHAWN GUNNARSON, WASHINGTON LEGAL FOUNDATION: The 1968 law uses one
simple principle: Is it voluntary? And so long as the confession is
voluntary, it comes in, regardless of all these other technicalities that
have been used.
SHUSTER: Gunnarson and other conservative legal scholars believe the
Virginia ruling is long overdue and that criminals should not be able to
get a case overturned simply because police waited to tell them their
rights. Even a few Supreme Court justices, including Antonin Scalia, have
suggested that a Miranda warning is not always necessary.
But over the last 30 year, every administration, from President
Johnson to President Clinton, has refused to challenge the Miranda
requirement. And now most legal experts predict that police would continue
to use it even if the courts scale it back.
STEPHEN SALTZBURG, G.W. UNIVERSITY LAW PROFESSOR: If you don't give
Miranda warnings, and you go back to the old ways, then you get into
litigation about What did you really say? What did the suspect know?"
you know, ``What are the totality of the circumstances?" And I don't
think the police are anxious to get back there.
SHUSTER (on camera): The ruling from Virginia will affect five
states, but constitutional scholars across the country are taking notice
because the issue seems destined for the Supreme Court.
In Washington, David Shuster, FOX NEWS.
(END VIDEOTAPE)
SNOW: We're going to take a quick break now. We'll be back in just a
couple of minutes. Our panel of journalists will summarize the latest
political news.
(18:44)
(COMMERCIAL BREAK)
(Copy: Content and Programming Copyright 1999 Fox News Network, Inc.
ALL RIGHTS RESERVED. Transcription Copyright 1999 Federal Document
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transcript for purposes of litigation.)
Special Report Roundtable
SNOW: Welcome back. It's pundit time with Jeff Birnbaum, Washington
bureau chief of ``Fortune" magazine, Mort Kondracke, executive editor of
`Roll Call," and from frosty Manchester, New Hampshire, where she's.
traveling with the president, Mara Liasson, White House correspondent for
National Public Radio. All three are FOX NEWS contributors.
Mara, Joe McQuaid said just a couple of minutes ago that there are
still tickets available for the president's speech. Do you see any
MARA LIASSON, NATIONAL PUBLIC RADIO: Oh!
SNOW: lagging in the passions for the chief executive?
LIASSON: Well, actually, what I heard from the New Hampshire
Democrats they said the tickets were selling like hotcakes, so that's
-- they're putting a little different spin on it.
No, I would say that the reaction to Mr. Clinton up here has been
very mixed. He's met he has had a lot of cheering crowds, very warm
reception at the health care event he did earlier. But there was this
screaming headline in the ``Manchester Union Leader" today that says,
``Mr. President, you're a disgrace," and then the headline on the
editorial was, "Don't come back, kid." And there were, you know, the
usual protest signs, ``Liar," Jail to the chief."
But this is a place where President Clinton really invented himself
as "The Comeback Kid." He has a lot of affection for New Hampshire.
Certainly, New Hampshire Democrats have a tremendous amount of affection
for him. They feel they have a personal stake in his presidency, and they
are they will be celebrating tonight. They might be gloating, even if
the president won't.
SNOW: What exactly can he do for Al Gore on a trip like this?
LIASSON: Well, I think that he can just keep all those warm feelings
stoked up. I mean, Al Gore is already in pretty good shape in New
Hampshire right now, and Bill Clinton can do everything he can to help Al
Gore to make sure that the web of contacts and the network that helped him
in '92 and then again in '96 although he didn't need much help then
is there for the vice president.
SNOW: OK. Now to demonstrate our global reach, I want to get a quick
travel report from Jeff Birnbaum, who earlier today was in Austin, Texas,
visiting Governor George W. Bush. He's going to run, isn't he.
JEFF BIRNBAUM, "FORTUNE" MAGAZINE: I would not bet against his
running. In fact, I would bet that he would run, quite clearly. He
SNOW: So how do you think this is going to work out? Give us a sense
of what you think the timing will be.
BIRNBAUM: Well, no one's saying anything officially, and so this is
mostly a guess on my part, but
SNOW: OK, winks and nods, and unofficially, what do you know?
BIRNBAUM: My guess is that sometime before April, he'll give a very
firm ``maybe" to running, which would be to announce an exploratory
committee to run for president, and then soon thereafter, maybe by the end
of the 140-day session that the Texas legislature goes through, maybe May,
probably before June, we'll know for sure that he's running.
SNOW: Now, Joe McQuaid said that they don't have any kind of ground
operation in New Hampshire. When you were talking to the governor, people
around him today, are they trying to put together the people who can
organize states like New Hampshire and Iowa, or are they actually going to
stay hands-off until May?
BIRNBAUM: My guess is that once they give a ``maybe," they're going
to start working very diligently on the ground. They're working in all
sorts of other ways, that's for sure.
I can report to you that the financial support for Governor Bush,
well before he even gives his ``maybe," is very, very strong. He has al
sorts of networks of money people that are more than willing to help him.
He is a graduate of Harvard Business School, for example. The alumni
society there, I believe, has some cash to give. His brother is the
governor of Florida, a pretty big and big-giving state. His father was
president. There are big remnants of his financial network that are still
in existence.
And we shouldn't forget two other things. One is that the governor
is the governor of Texas, where there is known to be a few dollars lying
around. And he also was a general manager and owner of a baseball team,
and the baseball owners like him a lot, and they are not only rich
themselves, but know a lot of wealthy people to give some money
SNOW: And finally
BIRNBAUM: so there'll be some money.
SNOW:
he's a graduate of Harvard Business School. OK, now I'm
going to let Mort get a word in edgewise. He talked about an exploratory
committee. Have you ever known anybody to form an exploratory committee
and say, "Ah, never mind"?
MORT KONDRACKE, "ROLL CALL": Yeah, now, let me see. Did Pat
Schroeder she did get out. I mean, the question with George W. Bush is
can he translate the charm, the passion, the clear capability -- I mean,
he really has done things to reform the Texas educational system in quite
a profound way. Can he translate that into a national message? I mean,
that if he can, and he doesn't stumble, and there's nothing to stumble
over, then my guess is that the nomination is his, and we're -- then we'll
talk about who gets the number two spot.
SNOW: Mara, when you're visiting up there, is there any buzz going
on about the Republicans?
LIASSON: Well, there's a lot of buzz in Democratic circles about how
happy Democrats are about their position vis-a-vis the Republicans in the
year 2000. I mean, Democrats up here really smell -- I don't know if
`revenge" would be the word, but they think they're in great shape to
take the House back. Of course, the Senate is a different matter. We've
got one Democrat after another retiring, and that makes the situation much
more difficult for them there. But there's a lot of buzz about how good the
y feel about their situation post-impeachment.
SNOW: Mort, very good question there. What do you make of the
retirement in the last few days of two more Democratic senators?
KONDRACKE: Well, Senator Bryan of Nevada said essentially the same
thing, or gave off the same message that Senator Lautenberg gave
yesterday, that the ordeal of raising all this money and slogging through
is just not worth it, and he wants to go on and find another life. I mean,
in his case, he's 61, not 75, but still he found it more than he was
willing to stomach to do it all over again. But it it I think it
it almost scotches any hope that the that the Democrats had of getting
the Senate back, which means that you're going to have some sort of
divided government the next time around. I mean, if the Republicans
SNOW: Unless you get a Republican president (INAUDIBLE)
KONDRACKE: Well, and the Republicans somehow hold onto the House,
which is very dicey. If if conceivably, if the country is confident
enough in George W. Bush, he could -- he could get at least a two-year
shot at total control of the government, just to see how it goes, because
we've had divided government now ever since, you know, 1994, and it's
beginning to get a little old. I mean, we may -- we may not like the
gridlock that comes this year
SNOW: We've actually had it since 1986.
BIRNBAUM: One of the interesting things
LIASSON: Well, we had those two brief years for Clinton.
KONDRACKE: We had two years.
BIRNBAUM: Right. But one of the interesting things about George W.
Bush -- and I'm not sure that we need to -- we should elect him yet. We --
but -- is that he has worked very, very closely with the Democrats in the
Texas legislature. And one of the things that he will run on, looking for
a message, is an end to partisanship, and he really has the credentials to
run on that. Whether you could actually do that in the national scene
someplace other than Texas, which may be anomalous -- but it certainly is
an appealing message, and he really does state it persuasively. He is a
very charming and persuasive man.
SNOW: But this gets us to the issue of political passions. I want to
go back to Mara. We talked earlier in the broadcast about the fact that
the AFL-CIO now says it's going to raise $26 million. It seems right now
that Democratic activists are far more enthusiastic about what they're
doing than Republican activists. Is that what you're seeing in your
travels?
LIASSON: Well, I think that's -- I think that's true. I mean, one of
the many peculiar phenomena of the impeachment proceeding is that the
Democrats have ended up very unified, very optimistic, really united
behind whoever the candidate's going to be, and it sure looks like it's
going to be Al Gore. And the Republicans are having this incredible
soul-searching, you know, internal fight about what they stand for and
what they should do about the rubble of impeachment. And I think the
Democrats are in pretty good shape.
However, you know, you see these retirements in the Senate, and you
have to wonder. When someone says, ``I just don't want to raise the
money," that's a little bit like saying, ``I want to spend more time with
my family." I mean, it's one of those suspect excuses in Washington. You
know, you wonder, number one, do they not think they can be a majority
again soon in the Senate, or they really don't think they have a chance to
win. And I think you get back to that problem that the Democrats' bench nat
ionally is very shallow.
KONDRACKE: You know, one other interesting point on this -- on the
House. They face a kind of a retirement crisis. You had a report on George
Nethercutt, who's term-limited and is trying to -- may try to wriggle out
of that. But you've also got a lot of committee chairmen. I mean, when the
Republicans took control of the House, they term-limited all their
committee chairmen to six years. Those six years are up in the year 2000.
If you're not going to be chairman of a committee, it ain't much fun being
in -- being
a back-bencher again.
SNOW: OK, I'm term-limiting you, Mort. Mort, Jeff, Mara -- thank
you. That's it for this panel, but stay tuned. We've got a hot ad to show
you next.
(18:56)
(COMMERCIAL BREAK)
SNOW: From time to time, we like to show you witty or inventive
political campaign ads. Tonight we're going to give you a change of pace,
a regular old TV advertisement drenched with politics. Check out this
rather novel pitch for a high-tech talking device.
(BEGIN VIDEO CLIP - TELEVISION COMMERCIAL)
RICHARD M. NIXON, PRESIDENT OF THE UNITED STATES: People have got to
know whether or not their president's a crook. Well, I'm not
a crook. I've earned everything I've got.
GEORGE BUSH, PRESIDENT OF THE UNITED STATES: Read my lips! No new
taxes!
CLINTON: I did not have sexual relations with that woman, Ms.
Lewinsky.
ANNOUNCER: Talk is cheap. With Tracfone, one rate plan gets you
nationwide coverage. You control the cost with no add-ons or extras. Get
smart. Get Tracfone.
(END VIDEO CLIP)
SNOW: Let me stipulate that in showing this ad, we do not endorse
the product or any of the statements made by the featured speakers.
Another footnote. The White House asked Top (ph) Telecom to cut out the
clip featuring the president. The company said, What? I think we got a
bad cell."
That's it for this edition of SPECIAL REPORT. Come back for our next
installment. In the meantime, stay tuned. More news is next.
END
RECORD TYPE: PRESIDENTIAL (NOTES MAIL)
CREATOR: Mark A. Kitchens ( CN=Mark A. Kitchens/OU=WHO/O=EOP [ WHO ])
CREATION DATE/TIME:22-FEB-1999 11:11:34.00
SUBJECT: CNN Evans & Novak, February 21, 1999
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TEXT:
Evans, Novak, Hunt & Shields
Aired February 21, 1999 - 5:30 p.m. ET
Frank Keating Discusses the Governors' View of the
Republican Party
AL HUNT, CO-HOST: I'm Al Hunt. With the governors making
their annual
visit to Washington, Robert Novak and I will question
the chairman of the
Republican Governors Association.
ROBERT NOVAK, CO-HOST: He is Governor Frank Keating of
Oklahoma.
(BEGIN VIDEOTAPE)
(voice-over): A week after the end of President
Clinton's impeachment trial,
the nation's governors are here for their mid- winter
conference. Governors
consider themselves more conciliatory and less co
nfrontational than their
congressional counterparts.
GOV. HOWARD DEAN (D), VERMONT: If the Congress would
only listen
to us on a bipartisan basis, then the whole country
would be fine. Governors
have to do things that Congress doesn't have to do.
Governors have to govern
from the middle.
NOVAK: Many Republican governors never were enthusiastic
about
impeachment, and were especially eager to change the
subject after last
week's acquittal of President Clinton.
GOV. TOM RIDGE (R), PENNSYLVANIA: And I think we just
need to get
back to the business at the national level. Hopefully in
partnership with
republican governors to respond to those legitimate
concerns of the American
people.
NOVAK: But Frank Keating was one governor who advocated
the
president's impeachment. A former federal prosecutor and
lieutenant to Jack
Kemp at the Department of Housing and Urban Development
during the Bush
administration, he was re-elected to his second term as
governor of Oklahoma
last year.
(END VIDEO CLIP)
NOVAK: Governor Keating, there was a meeting in Miami of
moderate
Republicans, more or less moderate Republicans
GOV. FRANK KEATING (R-OK), CHAIRMAN, REPUBLICAN
GOVERNORS ASSOCIATION: And there are some.
NOVAK: And there are some. And one of your colleagues,
Governor
Whitman, Christine Whitman of New Jersey, said this
quote "The fact is that
many Americans right now have an impression of the
Republican Party that's
mean-spirited, vindictive, and was not attending to the
public's business. It's
not up to us to argue with these critics right now. It's
up to us to figure out
how we repair the damage and move on," end quote. Agree
with her?
KEATING: Yes, I think she's right. I think -- now that
is an incorrect
impression in my view. But the reality is that a lot of
people think the
Republican Party is the party of impeachment, the party
of get Clinton, and in
the short term that's not good. In the long-term I don't
think that's bad,
because we are a Paul Bunyan society. We admire an
Abraham Lincoln,
honest Abe, George Washington did nor cut down the
cherry tree and lie
about it. So I think in the long-term, to stand for
integrity and truth is right. But
I think Christie's right. Right now people think isn't
that the party that just
wanted to get Bill Clinton. We have to address that
NOVAK: So the formula would be then to move to the left,
to erase that
impression. Is that correct?
KEATING: No, I don't think we should move to the left. I
think it's ti stand for
principle and what you believe in. As you noted in the
introduction, I felt all
along the president should resign. To defile the oval
office, to embarrass the
country and himself. I mean, every chief executive of a
company, every
president of a university, every general or admiral, if
I enticed as governor of
my state an intern into my office, engaged in oral sex,
told my cabinet to go
out and lie about it, wag my finger in the face of the
people of Oklahoma, I'd
be out in a millisecond, civil and criminal actions
aside. So I think that's not
moving to the left. It's saying, OK, we did what the
right thing was, we stood
for principle. But now that is ancient history, let's
move on.
HUNT: Let's talk about what the Republican Party ought
to do though.
Another one of your gubernatorial colleagues, a
Republican also, John
Rowland of Connecticut, said that Republican policies
have alienated women,
union members, immigrants, minorities, the elderly,
teachers, homosexuals, and
environmentalists. Do you agree with that? And do you
want to get most of
those back?
KEATING: Who's left? I think everybody -- if we've
alienated all those
people we've got a problem. But look what the Republican
Party
HUNT: You don't agree with Governor Rowland?
KEATING: No, and John is a very bright guy and he's a
friend. But let's be
realistic. It was the Republican Party that advocated
tax.cuts to leave money
in the pockets of the people who earned it. The R
epublican Party advocated
not containment but to finish the Cold War, and we won.
The Republican
Party advocated -- and the president twice vetoed --
welfare reform, insisting
that people take responsibility for themselves. All
those are things -- good
things.
HUNT: Do you think he's making this up? You don't think
the Republican
Party has alienated any of these people?
KEATING: Well, maybe it came out of an especially
raucous town meeting. I
don't know. But I think
NOVAK: That was the Miami conference.
HUNT: It was the same conference. Well, let me ask you
this then.
KEATING: No I don't think that. I think we have not
alienated. I think that's a
perception problem about impeachment. But the Republican
Party stands for
individual responsibility, individual opportunity, the
right -- as opposed to a
group -- of an individual to make something of his life.
That's good. That's the
way the average American thinks. That's the right thing
to think.
HUNT: One group that you haven't alienated is the
leaders of the religious
right.
HUNT: Do you think there's a perception problem for
people like Jerry
Falwell, Pat Robertson, Jim Dobson -- have too much
influence in the
Republican Party?
KEATING: Well, Jerry Falwell, Dobson and Pat Robertson
have not been in
my state. But in my state of the state message, embraced
by the Democratic
legislative leadership, I said we had too many divorces
involving children and
that we needed to cut them in half by the year 2010. We
have too many
out-of-wedlock births. That is a long-term challenge.
Kids who are born out of
wedlock are abused, frequently neglected, frequently
drop out of school,
frequently drug abusers. That's bad.
We need to cut the number of out-of-wedlock births.
Current addictions --
alcohol addiction, those are moral issues that are
certainly religious issues. I
would assume Dobson and those people believe in that
agenda, but that's the
right agenda from the civic public policy standpoint, to
advance sand I'm happy
to do it.
And the Democrats in my state think it's the right thing
to do.
NOVAK: But this week Governor Paul Weyrich, who has been
an active
pioneer on the right wing of the Republican Party as a
political activist, wrote
a remarkable letter in which he said the political bat
tle has been lost and we'd
better go, you'd better go back to the fighting the
cultural war which you
mention.
Let's -- he explained this on CNN this week. Let's take
a look at what Mr.
Weyrich said.
(BEGIN VIDEO CLIP)
PAUL WEYRICH, FREE CONGRESS ASSOCIATION: I don't think we
can achieve what we ought to achieve through the
political process. I think we
ought to open a different front. I think we have to do
things that separate us
from the culture and the society and allow us to fight
and continue to maintain
our principles in an increasingly hostile society.
(END VIDEO CLIP) NOVAK: Do you think that the political
war is lost and
you better fight the cultural war?
KEATING: No, as a matter of fact, I think we won it. Why
do you think Bill
Clinton moved to the right
NOVAK: Won what, the political war?
KEATING: Many of the political wars. The fact is we had
welfare reform,
and we have dramatically in my state for example,
reduced the welfare
caseload by 58 percent. Talk to Wisconsin or talk to
Michigan voters about the
dramatic drop in welfare caseloads in their state. We
have cut taxes. We have
resisted the nationalization of 17 percent of the
economy when the Clinton
health care bill went down.
The Republicans were in charge of the House and Senate.
Certainly not every
battle has been won, not every war is over. I mean I'll
take one step forward,
two back, three, four, one back. This is a long process
of trying to make the
country a better place. And I think Paul is wrong.
NOVAK: But what Paul Weyrich is saying is that you look
at the attitude of
the American people toward President Clinton, saying
yes, I think he lied; I
think he obstructed justice, but that doesn't matter if
he can provide these
services that they want out of the government. That's
why he thinks they've
lost the political conflict.
KEATING: Well, ask people what they think of him as an
individual. That is a
-- that's a bad chapter in American history, a tawdry
chapter that I think will
not be repeated. In the year 2000, both parties will
nominate righteous people.
We are not going to repeat that mistake. I think that's
winning a culture war.
I mean obviously, we can disagree around the edges.
Maybe we can even
disagree with the fundamentals, but I think Paul is
making a mistake if he
thinks that we have not made enormous progress. We have.
Now by the same token, it's important for us to
concentrate on the churches
and the synagogues, to concentrate on families, to do a
better job of raising
children, a better job at providing the support and the
love and nourishment
that families need.
After the Oklahoma City tragedy, I noted after several
youngsters were
murdered, children that were very high visibility abuse
case, happen to show
the world how good people behave following an unantici
pated tragedy, and yet
at the same time tolerate this kind of viciousness and
violence.
Well, that issues has been joined. I think that's a
moral issue. It's a cultural
war, if you wish, that's properly fought. I think Paul
is frustrated. There are a
lot of explanations why President Clinton was not
convicted. But remember he
was impeached, and that is a blot on his record for all
history.
HUNT: Well, let's keep with that. You have said,
including on this program a
few minutes ago, that you think after some short term
hits, that impeachment
would be a plus for Republican over the long run.
According -- do you think that candidates, Republican
candidates for 2000
should raise the issue of impeachment?
KEATING: President Clinton is a former president in
2000, for all intents and
purposes
HUNT: No, but do you think
KEATING: No, no
HUNT: You don't?
KEATING: No. I mean, I think people know that this was
bad. It was bad for
the country. It was bad for the
HUNT: But you don't think it's something Republicans
ought to raise?
KEATING: No, but it's standing for principle in the
past. People are not going
to have to explain standing for principle in the past.
KEATING: I think the Democrats are going to have to
explain not standing
for principle.
HUNT: Well, you also said the Democrats will be known as
the party of
marital infidelity because of this. Do you think that
KEATING: Well, I didn't say that. But I'd say that
HUNT: That was a direct quote, I think. That's what the
Democrats have
been. Do you think
KEATING: Not about but, Al, what I am saying is
that, as far as the
democrats are concerned it was disappointing to me as a
citizen, that there
were none of them that crossed the line in the senate
and voted against this
kind of conduct. Even Robert Byrd admitted the president
lied under oath and
obstructed justice and yet we're not going to vote to
remove. That's puzzling
and troubling to me.
HUNT: I am going to ask you this question. Do you think
the issue of marital
fidelity ought to be a legitimate issue for Republican
presidential in the year
2000?
KEATING: Yes.
HUNT: You do. Should it be a litmus test?
KEATING: No. It certainly is an issue. But there is
simply no way
HUNT: Do you think that every candidate ought to say
whether they have
been -- whether they've engaged in marital fidelity or
not? KEATING: Well,
they're going to be asked that question. They better be
able to answer in the
affirmative.
HUNT: You think we ought to answer it?
KEATING: Yes.
HUNT: Well, all right.
On that note we will be back to talk with Governor
Keating about the
Republican agenda, or if there is one.
(COMMERCIAL BREAK)
NOVAK: Governor Frank Keating, the last time I saw you
was at the
Republican governors' meeting in New Orleans right after
the election. And
the Republican governors were very upset that there was
not an agenda by
the congressional Republicans in this previous campaign.
Now I'm not asking you about the governors' agenda, not
the governors'
agenda, but do you think in the four months since then
there has been any sign
of a congressional Republican agenda that's coherent.
KEATING: Well, remember there has been a real problem
finding leadership.
Not in the Senate particularly, Trent Lott is firmly in
charge and I think does a
very fine job as leader. But in the House, we've gone
through one and a half
speakers, and now we have a new speaker. I think to have
someone as
wholesome as the new speaker, representing middle
America, that's a good
start. And I think the agenda will develop.
But the fact is, reducing taxes, reducing the size of
government, fixing Social
Security, providing the assurance that every citizen has
access to medical
care, improving the quality of education, and yes, a
strong national defense.
That's a pretty good agenda now to pick and choose the
various portions.
NOVAK: But what you're telling me is in the four months
since the election --
there's been plenty of time, really. There's been no
agenda annunciated by the
congressional Republican Party. That's what I interpret
you to say.
KEATING: Well, no, I mean, I think that there have been
bits and pieces of it.
Has there been a press conference, an opportunity for
the leadership
NOVAK: Like the Contract with America?
KEATING: Yes, Contract for America. No, but remember the
entire country
has been focused on impeachment. The impeachment
process, the trial
process, the House managers are the most famous people.
The House
managers are probably better known than the new speaker.
So, I mean, that is
to be expected. Now that that's over, for the Republican
Party to be in the
game and in the game significantly, we need to address
at the congressional
level those things that matter most to the American
people and don't be afraid
and don't run from Bill Clinton.
He is a wounded president. He certainly is a factor. The
presidency is
important in this whole process. But the Republicans
should stand on the
mountaintop, blow the bugle, and charge, advance the
agenda that they believe
in and don't apologize or anything.
HUNT: Governor, with all due respect, that agenda that
you cited just a
moment ago is something that probably 95 percent of
politicians in this town
can embrace.
KEATING: That's why Weyrich is wrong. See, that's our
agenda and the
Democrats accept it.
HUNT: I would like to be more -- that's also the
Democrats agenda. I would
like you to tell us what should be the priority of these
Republican leaders in
Congress. Should it be preserving Social Security?
Should it be tax cuts?
Should it be more money for education? Should it be
paying down the national
debt? Or should it be defense? You can't have all. Which
are two or three
more important priorities?
KEATING: I think, obviously, saving Social Security is
extremely important.
To the average person that's very important. But also
the average person
would like to have some of his money back. I don't think
that those are two
inconsistent things to do. You can save Social Security
and you can get an
opportunity for people to enjoy and spend and save their
own money.
This issue of what's going on in Kosovo, the issue of
foreign policy, the
presence
HUNT: But those two are more important than paying down
the debt or
KEATING: Well, mean, all of them are factors. And I
just think what's very
important -- and I'm sure it's going on, I'm not in the
Congress, but I'm sure it's
going on -- the leadership needs to come together and
advance a Republican
growth and opportunity agenda in spite of the president.
The party should
never be reactive
HUNT: All right, on tax cuts
KEATING: The party should be offensive. And do the
things that the
American public wants.
HUNT: On this growth agenda, let's talk about tax cuts.
Would you prefer to
see across the board tax cut or would you like to see a
more targeted tax cut
towards things like the marriage penalty?
KEATING: In my state, and the state of thirty Republican
governors other
than I, even with overwhelmingly Democrat legislatures,
we present what we
think is the right thing to do. In my case broad based
tax cuts. I'm not going to
get all of it. If we present a broad based tax cut that
balances the budget but
also addresses Social Security, and all we get is
elimination of the marriage
penalty, that's something we didn't have last week.
So, I would advance an aggressive agenda of growth and
if we have to
compromise at the end and get something that otherwise
we would not have
gotten because we have a Democratic president who can
veto it, and a
Democratic Congress that's almost a majority. Then let's
do that. But don't sit
on your hands.
NOVAK: Governor Keating, you are an anti-abortion
Catholic. Do you think
that abortion should be somewhere out there on the
Republican agenda? You
didn't mention it.
KEATING: Well, I mean, obviously, it is a matter of
enormous personal
struggle and conscience. I think the president said it
right. He hasn't done a
whole lot to do anything about it. But to say that ab
ortion can be safe and rare.
KEATING: Abortion is apparently safe but it isn't very
rare and to veto the
partial birth abortion ban which, in my opinion is just
saying yes to infanticide.
That's wrong.
We can find a consensus here to discourage abortion. In
my state for
example, we can discourage abortion by advancing agendas
for example,
parental notification, or waiting periods, or that
abortions have to be in medical
facilities. That isn't embracing abortion. It's saying,
look the Constitution, as
interpreted by the Supreme Court says we're to have
abortions so let's make
them safe and rare.
And this president has not done that.
NOVAK: So you would like for the Republican majority in
Congress, to
include on its agenda, the kind of things you just
mentioned against partial birth
abortions, waiting periods, other restrictions on
abortion.
KEATING: Well, I think the waiting periods and the
parental consent, those
things can be handled most appropriately at the state
level and they are.
Even
NOVAK: But the partial -- but the partial birth
abortion
Even states that are moderate if not liberal on social
issues. The partial birth
abortion ban is think is appropriate. And this isn't
throwing a gauntlet down in
front of the president. This is doing what's right. And
to limit abortion, make it
safe and rare, as the president has said, I think is
good public policy. It's not
the only issue. It's perhaps not even one of the top
three or four issues. But to
people who care very, very deeply about human rights,
and we all should, it is
important.
HUNT: Governor, one of the first issues that will
confront the Congress, is the
question of the so-called patients' bill of rights, HMO
reform. Last year your
party blocked a bill on the issue of whether patients
should be able to sue
HMOs. What would you like to see the Congress do this
year as far as HMO
reform?
KEATING: Well, I had a personal experience, my own life
-- our daughter is
a young woman with a congenital heart defect and her
gatekeeper would not
let her go to a cardiologist in her job. I think that
was wrong. I had to call all
the way up the ladder to get somebody to let her have
access to a heart
specialist.
If there is gross negligence, gross negligence, and it's
a risk of life and health, I
think there should be an opportunity to sue. Now does
that mean that there is
an opportunity for a compromise? Yes.
To say that under no circumstances ever, ever should
there be an opportunity
to access the courts, I think is going too far. But
obviously Democrats have
staked out a pro-trial lawyer position. The Republicans
have staked out -- we
don't have to see the trial lawyer's position
HUNT: But you'd would like to see your party move a
little bit?
KEATING: Yes. I think there will have to be some sort of
compromise. In our
state for example, we limited punitive damages in civil
lawsuits to double
actual damages, and we said the only way you could break
the cap is if there
was such gross negligence and a death occurred that the
cap should be
broken.
Something like that
HUNT: Governor, we have about 30 seconds left. Let me
ask you a question
about Ken Starr, the independent counsel. I would for
you to comment -- you
are a former prosecutor -- I would like you to comment
on what you think of
his competence, and specifically the fact that he as the
chief prosecutor never
met his star witness Monica Lewinsky.
Did you ever not meet your star witness?
KEATING: I -- I didn't know that. But let me say this,
Ken Starr is a person
of enormous good will and decency and honor and
intelligence. I like Ken
Starr. But the independent counsel law should never have
been passed. It's a
bad law. To say that I'm going to make you my subject,
and I was a former
U.S. attorney, former FBI agent, supervised all the
federal prosecutions at one
time when I was the associate attorney general under
Ronald Reagan. But I'm
going make you my target, and I'm going to put 15 FBI
agents on you and 15
IRS agents and 15 Secret Service agents, I will get you
eventually. That's not
prosecution.
HUNT: All right. We will be back with "The Big Question"
for Governor
Frank Keating.
(COMMERCIAL BREAK)
HUNT: Governor, "The Big Question": With character and
foreign policy in
the forefront, we suspect you're not going to tell us
who you're going to
endorse in the year 2000, but which of the Republican c
andidates do you think
is most qualified to lead the country in those areas?
KEATING: Well, I will tell who I'm going to endorse in
the year 2000 is
George Bush. He and I are very good friends and I
consider him a
wonderful
HUNT: So you think on foreign policy and character he's
the best.
KEATING: Well, yes, I mean, we have a lot of very good
people running. But
George has been elected and re-elected the governor of a
country. Texas is a
country. He's done an excellent job as governor. He's
been able to appeal to a
cross-section of the people. He is a very, very good
governor. Very effective.
Matter of fact, sometimes I've asked him how do you do
it. In my state I'm
always vetoing bills, having a real struggle. And he's
successful in terms of tax
cuts and changing education for the better, making
schools tougher.
So George is a good guy. I think we have a lot of good
people. The
Democrats will too. I think the vice president clearly
is the leader. He is
certainly more skillful and knowledgable in foreign
policy, but you can catch up
quickly.
NOVAK: Governor, since you've been so forthcoming in
telling who you're
endorsing for president, tell me about the running mate.
Do you believe that
Elizabeth Dole, first woman on a Republican national
ticket, would be a good
running mate?
KEATING: I think she'd be a very good running mate. I
think a lot of people
would be very good running mates. Elizabeth Dole is very
bright, very
knowledgable, has a lot of national and international ex
perience. But
fortunately we have a lot of good people. And that's why
when everyone is
wringing their hands and their crying about the
Republican Party, remember
we have the House and Senate and 31 governors
representing two thirds of
the American people. We do speak to the American public.
And well.
NOVAK: Governor Frank Keating, thank you very much.
KEATING: Thanks, Bob.
NOVAK: Al Hunt and I will be back with a comment after
these messages.
(COMMERCIAL BREAK)
HUNT: Bob, you know Frank Keating is a smart politician
and he says he's
going to be with George W. Bush in the year 2000. George
W. is the flavor of
the month. But he also said, well he may not know as
much about foreign
policy, but he can learn. It would be interesting to see
that on the job learning
curve.
NOVAK: You know Christie Whitman of New Jersey is a
liberal Republican.
Frank Keating is a very conservative Republican. So I
was very interested, he
agreed with her on the public image of the Republican
Party as mean-spirited
and vindictive. I was surprised he did agree with her
and he said it needs
changing. HUNT: Well, Bob, he also said that impeachment
will be a plus for
Republicans in the long run. But don't talk about it in
the year 2000.
NOVAK: You know, back in New Orleans after the election,
Frank Keating
was out there with the other governors saying to the
Republican leaders,
you've got to have an agenda, you've got to have an
agenda. What he told us
on this program today was, there's still no Republican
agenda and he put it off
on the delay on naming a speaker. I'm not sure that's
accurate. I'm Robert
Novak.
HUNT: I'm Al Hunt.
NOVAK: Today in one half hour on "RELIABLE SOURCES" is
the media
going too far in speculating about Hillary Clinton's
possible senate run? And 30
minutes from now at noon Eastern on "LATE EDITION WITH W
OLF
BLITZER" a special interview with House Budget Chairman
and White
House hopeful, John Kasich.
HUNT: For now. thanks for watching.
END
RECORD TYPE: PRESIDENTIAL (NOTES MAIL)
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CBS FACE THE NATION
Aired on JUNE 13, 1999
SPEAKERS: BOB SCHIEFFER, HOST, CBS FACE THE NATION
GLORIA BORGER, U.S. NEWS AND WORLD REPORT
CORRESPONDENT
U.S. REPRESENTATIVE ASA HUTCHINSON, (R-AR)
CAROLYN MCCARTHY, (D-NY)
JOHN HARWOOD, POLITICAL EDITOR, THE WALL STREET
JOURNAL
GEN. WESLEY CLARK, NATO SUPREME ALLIED COMMANDER
FRANK KEATING, OKLAHOMA GOVERNOR
BORGER: Today on FACE THE NATION, NATO troops enter Kosovo, but
Russians occupy the airport. George W. Bush invades Iowa, and a debate on
gun control.
As thousands of NATO troops with armored vehicles moved into Kosovo
today, Russian troops took control of the Pristina airport. What's going
on? We'll ask NATO Supreme Allied Commander General Wesley Clark.
How did George W. Bush, the Republican front-runner in campaign 2000,
fare in his first trip to Iowa? We'll ask John Harwood, political editor
of The Wall Street Journal;" and Governor Frank Keating, Republican of
Oklahoma.
Then we'll turn to the controversial issue before the House next week:
gun control. We'll have a debate between Republican Congressman Asa
Hutchinson of Arkansas and Carolyn McCarthy, Democrat of New York.
But first, the problems in Kosovo on FACE THE NATION.
ANNOUNCER: FACE THE NATION with chief Washington correspondent Bob
Schieffer. And now, from Washington, substituting for Bob Schieffer, CBS
NEWS Special Correspondent, Gloria Borger.
BORGER: And joining us now from Skopje, Macedonia, General Wesley
Clark. Thank you for being with us, General Clark. Over the weekend, as
you know, about 200 Russian troops left Bosnia and moved in to occupy the
airport at Pristina, which is supposed to be NATO headquarters, and they
are still there. Can you update us on this situation?
CLARK: Well, they are still there. We're in the area with a sizable
number of troops. This is and has been a political issue, first and
foremost. There's no desire to have any confrontation, and we're doing
everything we can, in fact, to avoid such an unfortunate event. Instead,
we're going to resolve this through political means. And that's really
about all there is, except to say that we really had no plans at this
point to make any substantial use of that facility anyway, so our move in
is not affected. We're continuing to move right in. We've got several
thousand troops inside Kosovo right now, and in fact, we're ahead of
schedule in terms of our deployment.
BORGER: When you say this is a political issue, what do you mean by
that?
CLARK: Well, what I mean is this is not the kind of issue that military
commanders on the ground or that troops are going to be able to resolve.
This has to do with much broader issues, and it has to be resolved by the
authorities who deal in those issues.
BORGER: Do you consider this a dangerous situation at all?
CLARK: No, I don't, because we don't have a confrontation here. What we
have is a set of political dialogue that's been going on in various
bilateral and multilateral fora for several weeks about the mission and
the shape and the nature of the force that will be in Kosovo to implement
this agreement. And this is just one more part of that dialogue.
BORGER: As a military commander, can you figure out what their mission
was?
CLARK: Well, they were to be an advance party in the event that Russian
troops were flowed into the airfield.
BORGER: And what happened then? And so why won't they leave?
CLARK: Well, the Russian troops, the Russian troops haven't flowed, and
there are probably a number of reasons for that. And really, we're not
going to be able to explain all of that at the military level. That's part
of why this is a political issue, because you're dealing with the actions
and the intent of some very high level people in that capital, and really
they have to account for what happened. All we know is we have a very
small number of Russian troops there. They're not impacting on our move.
We have several thousand troops inside Kosovo already. The movement in is
going well. The Serb withdrawal is going well, and we'll leave that issue
at the airport to be resolved by the political authorities, because that's
the nature of the issue.
BORGER: So you are saying to us that you cannot go into the airport,
right?
CLARK: I'm just telling you that at this point, it's really sort of a
non-military issue. It's a political issue. There's plenty of forces,
we're moving into the area, and it needs to be resolved at the political
level.
BORGER: Do you believe that it is possible that the Russians were
trying to stake claim to a piece of land in Kosovo?
CLARK: Well, I'm not going to speculate on what all of their motives
might have been. In any event like this, there are bound to be a lot of
perceptions about what's going on, and it would depend on who you talk to.
So I couldn't begin to speculate on that. What
I do know is that they are there. We're also there. If their mission was
to be an advance guard or an enabling force or some kind of a quartering
party, it certainly hasn't worked out that way. We're continuing our
mission in Bosnia. That hasn't been affected by the fact that they pulled
these 200 troops out of there. And so I think it's a sort of a bizarre
incident at this point.
BORGER: What happens if they don't retreat, though, General? Would you
take them on?
CLARK: Well, I think this issue is going to have to be worked out and
resolved at the political level. As I said, this is a political issue.
BORGER: Could you live with some sort of independent Russian command in
Kosovo?
CLARK: Well, what we've said, what we've said on that issue is that we
have to follow the terms of the peace agreement that was endorsed by the
Serb parliament, and that was in fact presented and received, accepted by
Mr. Milosevic. It's enshrined in the UN Security Council resolution. It
calls for an effective international security presence, and a unified
chain of command. So there is no independent chain of command.
CLARK: And it says no independent chain of command.
BORGER: A unified command under NATO, and the Russians are clearly
saying to you this is not something they can live with. You're now in
Skopje to try and work this out. What do you see as the solution here?
CLARK: Well, I think, as I said, it's a political issue, not a military
issue. I think everyone is very clear on what the military requirements
are, and it has to be resolved as a political issue. The solution is not
here in Skopje. The solution is wherever this problem originated, Moscow,
perhaps. But it's not here. We're continuing with what we're doing, we
have a unified chain of command right now. We have General Mike Jackson
here. He's doing an absolutely superb job with these troops, and
everything is going well.
BORGER: A question now on the Serbian forces. Are they moving out
according to schedule?
CLARK: We have about 11,000 that have moved out. We have a substantial
proportion of all of his arms. We've seen some of the combat units pulling
back and moving out. I don't know if they're going to make the schedule on
an hour-by-hour basis. I will tell you yesterday that the Serbs called me
to complain that we weren't moving in fast enough. And so there's every
indication that they're doing their best to pull out on schedule.
BORGER: So you're satisfied with their withdrawal at this point?
CLARK: Well, thus far I am, and we're watching it very closely. We have
a number of means of watching it, but they are complying, so far as we can
determine right now.
BORGER: Is there a date certain that you expect their withdrawal to be
complete?
CLARK: Well, we've given them entry in force plus 11 days. That's one
week from today. We're at entry and force plus four days today. So we
expect them to follow through and comply in full.
BORGER: And when do you expect all the Albanians to be able to return
to their homes, General, by the winter?
CLARK: Well, I think that's something that's going to have to be looked
at very closely. Clearly, we want to get them back in as soon as it's
practicable. On the other hand, first reports coming out from various
areas around Orahovac, up the road there toward Pristina, indicate very
substantial destruction, not only of individual homes, but of
infrastructure. We know there's a lot of demolitions and mine fields in
there. There's booby traps, no doubt, that have been placed, and we want
to make sure that we've done what we can do to ensure their security
before we have a flood of people coming back in, and a number of injuries
that could be prevented with a little patience. But I don't have an exact
timetable. We are going to have to do an assessment as we get in there on
the ground and take a look at this. We are going to do that assessment
very quickly, and then we'll be working with the UN high commissioner on
refugees, who's really the responsible authority for organizing and
developing the return.
BORGER: Thank you very much, General, for being with us. We've got to
take a short break here. When we come back, we're going to turn our
attention to the political story of the week, and that's George W. Bush's
campaign for the White House.
(COMMERCIAL BREAK)
BORGER: George W. Bush went to Iowa yesterday, and he told us that he
intended to be the next president, and that he was going to be a
compassionate one. Let's listen for a minute to a few of the things he
said:
(BEGIN VIDEO CLIP)
GOV. GEORGE BUSH: Is compassion beneath us? Is mercy below us? Should
our party be led by someone who boasts of a hard heart? I know Republicans
all across America. We're generous of heart. I am confident that Americans
view compassion as a noble goal, the calling of a nation, where the strong
are just and the weak are valued.
(END VIDEO CLIP)
BORGER: Joining us now from Kennebunkeport, Maine, we've got John
Harwood of the Wall Street Journal, and from Oklahoma City, Governor Frank
Keating. Let's go first to you, John. You were on the scene there with the
governor. Can you tell us a little bit about how he was received?
HARWOOD: He was received very well, Gloria. It was a very unusual
situation for the beginning of an lowa presidential campaign. Usually,
candidates come out at this stage in small groups, a couple of reporters
in people's living rooms. This was a huge media throng, a couple of
hundred reporters and photographers, more like a general election
campaign. But he gave a good speech in
a couple of different Republican fund raisers. People liked the message.
You did hear some questions from the crowd about when are we going to hear
a little more specifics, but on the whole, the day went very well for him.
BORGER: So you think this message of compassionate conservatism is
something that the governor can take with him around country?
HARWOOD: Yes, this is, ever since the Contract with America and the
problems with the Republican revolution, the party has had to deal with
the charge from Democrats that they're mean-spirited. This has been a
problem with suburban voters, particularly women, and the governor is
going right at that problem.
BORGER: Governor Keating, let me turn to you for a moment, because
you're one of the two-thirds of Republican governors who have already come
out and endorsed George W. Bush's candidacy. Aren't you guys anointing him
a little bit too early?
KEATING: It's a good majority, though, Gloria. No, actually, we
governors understand what governance is all about and how very successful
George Bush has been. Remember, here's a very good man who loves his wife,
and his children and his country. He's been a very successful businessman.
He's been a very successful governor of a country. It grieves my Oklahoma
heart to say that, but Texas is a country. Metropolitan Houston is larger
than Oklahoma. Arkansas is about the size of a Dallas suburb, and he's
been very, very effective. And I think he will be a very excellent
candidate, and I think he will be a superb president.
BORGER: Governor Keating, do I hear a little bit of that character
issue popping into what you're telling me? He loves his wife, his family,
his country?
KEATING: Well, I think character is a very significant issue. I think
the American public wants a president that they can look up to, who will
symbolize the good things of the United States, honor and virtue,
tenacity, toughness, flint, independence. Midland, Texas, it grieves me to
say that, too, but that's George Bush, and
I think he'll be very effective as a candidate. And I think the experience
he's had with the compassionate conservative message, quite truthfully,
that's quintessentially Lincoln, the government should only help those who
can't help themselves. Obviously, George is somebody who has thought a lot
of about these things. I've had a lot of conversations with him, and I'm
very confident that he'll be
a very focused and very successful candidate.
BORGER: Is compassionate conservatism now the new theme song of the
Republican party, Governor?
KEATING: Well, obviously, all of us in public life, especially those
who are governors, appreciate the fact that not everybody is not in the
position to take care of himself, the frail elderly, those who are
mentally deficient. But there's an element of tough love here, too,
Gloria. Taxes need to come down, and George Bush in Texas reduced them.
Welfare rolls need to come down, and George Bush in Texas reduced them.
And crime, especially violent crime needed to come down and George Bush
did that as well. So tough love, compassion, all of it I think is a
focused agenda for prosperity, hope and success, and George is the man to
do it. I'm very confident that he can.
BORGER: I know you're a big supporter of the governor, but can you tell
us a little bit about what you honestly think his vulnerabilities might be
at this point?
KEATING: Oh, I think the fact that he's been governor of Texas for five
and a half years will be raised as an argument that he doesn't have
sufficient government executive experience.
BORGER: As opposed to Al Gore?
KEATING: But as I said, Arkansas, when President Clinton was elected,
Arkansas is about the size of a Dallas suburb. No offense to Arkansas,
it's a wonderful state, but the reality is that George has been successful
in business, he's been very successful in a bipartisan way in government.
Remember, he got 69 percent of the vote -- blacks, Hispanics, minorities
-- Democrats and Republicans alike. That's a tremendous plurality for
somebody.
BORGER: Governor, foreign policy is obviously an issue. Vice President
Al Gore is somebody who's been tested on that issue. Isn't Governor Bush
untested in terms of foreign policy? He didn't come out and talk about
Kosovo, for example, very quickly.
KEATING: Well, President Clinton was untested in foreign policy as
well. There are a lot of presidents -- President Kennedy was untested in
foreign policy -- in both parties who did not have extensive foreign
policy experience. George Bush has traveled extensively.
KEATING: He has a tremendously gifted group of advisers, George Shultz,
Dick Cheney, people who wrote the book on foreign and domestic, and really
defense policy. I think he'll handle it very well. What's important is to
have the independence of judgment, the toughness, the tenacity, the
brightness in order to make decisions like this and others that need to be
made in the interests of the United States. I have every confidence George
can do it.
BORGER: Well, thank you very much, Governor. Now I'm going to go back
to John Harwood in Kennebunkport, Maine, because John, you're there
because the governor is in Kennebunkport to celebrate his dad's 75th
birthday, I gather. But he's going on to New Hampshire tomorrow, which is,
of course, a very conservative state. And there are some questions among
Republicans about whether this notion of compassionate conservatism is
going to fly in a state like New Hampshire. What do you think?
HARWOOD: Well, he's going to try to make it fly tomorrow. He's going to
read to a group of schoolchildren to drive home his education message.
He's already a little bit ahead of schedule, last week, put out the word
that he's in essence taking the pledge not to raise taxes, which is always
an important issue in New Hampshire. So he's put that part of his message
out there, too, and
I think he'll probably be fine up here.
BORGER: Do you think he's going to get those big crowds in New
Hampshire? Is all the hordes of the media going to follow him to New
Hampshire, too?
HARWOOD: Most of them are, and I think the fever will break a little
bit after this trip. I don't think they're going to sustain this size of a
media contingent for the rest of the summer. But there's no going back to
a situation when you have a front runner of this kind where you have small
crowds. He's going to be watched very closely everywhere he goes, and I'm
sure he's going to have pretty substantial crowds.
BORGER: Thank you very much, John. Thank you very much, Governor
Keating. We're going to have to take a break. And when we come back, we're
going to talk about the coming showdown in Congress over gun control.
(COMMERCIAL BREAK)
BORGER: Now we turn from presidential politics to the politics of gun
control. Joining us from New York City, Representative Carolyn Mccarthy,
and with us here in the studio, Representative Asa Hutchinson. Thank you
both for being with us. Congressman Hutchinson, there's now a bill
pending in the House that includes mandatory background checks at gun
shows and also child safety locks. Some House Republicans, as you well
know, want to ease up on these restrictions. This past week, House
Republican leaders said well, we're not going to force anybody to vote one
way or another on this bill. Does this mean that the House is not going to
be able to pass a gun control measure?
HUTCHINSON: Well, I don't believe the bill in its present form will
pass the House, nor will the Senate bill in its present form pass the
House. But I believe a common sense bill can pass. It will be much broader
than what you just outlined. It will touch upon those things, but it will
also go to the enforcement aspect, to make sure we have the resources to
enforce our current laws in regards to guns. It will deal with the culture
of violence. So I think a broader bill will pass. But in those areas that
you mentioned, it's going to have to be common sense. You don't want to
have to put a 72-hour waiting period for a sale at a gun show whenever the
gun show only lasts two days. That's a problem that you have to deal with.
It's not common sense. It's going to penalize a lot of citizens. You want
to keep the guns out of the hands of criminals, that's a legitimate
objective we want to achieve, and I think it's also legitimate that we try
to increase or encourage the use of safety devices for parents, for anyone
who has guns around young children. Those are legitimate objectives. I
hope we can pass a common sense bill that will address that.
BORGER: Congresswoman McCarthy, maybe you can tell me why these two
sides seem unable to reach some kind of an agreement here.
MCCARTHY: Well, I think it's a shame because we didn't go through
committee, because I think an awful lot of this could have been ironed
out. But I certainly agree with my colleague that child safety locks, but
with standards, is something that's extremely important. And again, it's a
shame that we're having a debate when we talk about how many hours it is
for an instant check or whether we go through the Brady bill. But I think
it's important, even though it's going to be an inconvenience for some of
our gun owners, who basically agree that they don't mind that
inconvenience so that the criminals cannot get the guns. And I happen to
agree with my colleague also, we have to make sure we have more resources,
certainly for our police officers and the ATF so they can do their job.
And I hope it's something that we can work on together in the future.
BORGER: Well, if you guys are agreeing so much, what's the issue here
then, Congresswoman?
MCCARTHY: Well, I think there are different parts, certainly in
Congressman Hyde's bill. He is going for the 72 hours. But most gun shows
are on the weekend. That means that the federal, the FBI cannot do a
complete check because the courts are closed. Our local police, which have
better records on some cases, because the instant check has not been in
force that long. So I think we have to work with our local police, they
know their customers. I think what people, they're losing the whole thing.
Everyone is going back to Littleton, which was a horrible, horrible
experience, but we have to see that gun shows, which are over 5,000 a
year, are attracting criminals more and more because they know they can
come into the gun show, buy the guns and then go out and do the crimes.
Those are the people that we have to stop. And unfortunately, that will
mean an inconvenience for honest citizens. But they're willing to do that.
BORGER: Congressman Hutchinson, what's wrong with a three day
background check, three business days for people who purchase guns at gun
shows? So if there's a difference, two days, three days, what's the
problem?
HUTCHINSON: Well, the problem is that the gun show starts on a Saturday
and a Sunday and it's over with, and some innocent citizen who wants to
obtain a gun, say, will come back, they can't get their background check
completed in time, it's a confusing day, and so it's over with. And so, in
essence, I think it will shut down gun shows. Now some people would say
well, maybe that's a good idea. But a lot of good citizens enjoy those,
and it's a means in which we can participate. I think that here you're
talking about a definition of gun show is also one of the differences.
HUTCHINSON: In the Senate bill, if it's 50 guns are sold, then it becomes
a gun show. Well, we can debate what constitutes a gun show. The fact is
that if somebody wants to bypass that, they'll say well, call me at home
and we'll carry out the sale later. There's always a means to bypass the
sale at the gun show. So we just have to do the best we can to keep it out
of hands of the criminals.
BORGER: Congresswoman, are we having sort of a debate of how many
angels you can fit on the head of a pin here? Seventy percent of Americans
say they are for some form of gun control. If the House of
Representatives this coming week doesn't agree on a bill, how do you go
home to your constituents? What do you tell them?
MCCARTHY: Well, going home to my constituents, they know that I've been
on the forefront of this for years. This is why I came to Congress. I am
actually hoping that when we start debating the bill on Wednesday that we
can have a good, fair, open debate. No matter what happens on Wednesday,
if we don't get anything that's good that's legislatively passed, I
certainly will continue to fight to reduce gun violence in this country.
BORGER: Congressman Hutchinson, let me let you have the last word here.
HUTCHINSON: Well, I do believe we can pass a common sense bill, but
we've got to understand that it goes to the heart of individuals, there's
a problem in America and not just simply access to guns. Criminals are out
there. We want to able to prevent them from having them, but we can't
avoid average citizens being able to protect themselves. That's the
balance, and I think we can do something good this week.
BORGER: Thank you very much, both of you. I'm sure we will continue
this debate in Congress next week. Just a final note now. Bob Schieffer is
not here today because he's the proud father of a beautiful new bride.
He's going to be back in his chair next Sunday. In the meantime, thank you
for watching FACE THE NATION.
END
Clinton Presidential Records
Automated Records Management System
[EMAIL] and Tape Restoration Project [Email]
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies a responsive email, already made available
within another collection.
Collection: 2019-0146-F
Bucket: OPD
Creation Date: 2000-05-22
Subject: CNN, Late Edition, May 21, 2000
Creator: Gilbert S. Gonzalez CN=Gilbert S.
Gonzalez/OU=WHO/O=EOP [ WHO ]
RECORD TYPE: PRESIDENTIAL (NOTES MAIL)
CREATOR: James R. Kvaal (CN=James R. Kvaal/OU=OPD/O=EOP [ OPD
CREATION DATE/TIME:11-DEC-2000 09:43:45.00
SUBJECT: chronicle of higher ed -- clinton legacy
TO: Gene B. Sperling ( CN=Gene B. Sperling/OU=OPD/O=EOP@EOP OPD
READ:UNKNOWN
TO: Patrick M. Dorton (CN=Patrick M. Dorton/OU=OPD/O=EOP@EOP [ OPD )
READ:UNKNOWN
TO: Amy Mall (CN=Amy Mall/OU=OPD/O=EOP@EOP OPD
READ:UNKNOWN
TO: Sylvia M. Vellino (CN=Sylvia M. Vellino/OU=OPD/O=EOP@EOP OPD
READ:UNKNOWN
TEXT:
The Chronicle of Higher Education
From the issue dated December 15, 2000
The Clinton Legacy in Higher Education
By JEFFREY BRAINARD, STEPHEN BURD, and BEN GOSE
Washington
As Bill Clinton prepared to become president eight years ago, most college
officials glowed with excitement. During 12 years of Republican control of
the White House, they had endured countless proposed budget cuts and
plenty of biting ideological attacks.
At last, they felt, they would have a real "education president." After
all, Mr. Clinton was a Rhodes scholar, had pushed far-reaching education
reforms as Arkansas's governor, surrounded himself with wonkish friends
from academe (and actually read their books), and talked constantly about
education. In October of 1992, more than 200 college presidents,
administrators, and trustees took the unusual step of endorsing Mr.
Clinton in an advertisement published in The Chronicle.
Today, many of those educators are again singing his praises, grateful for
new programs, huge infusions of money for student aid and research, and
the attention he showered on higher education during the past eight years.
But a close look at the Clinton record in the White House reveals a more
complicated picture.
Although college lobbyists may be feeling nostalgic for Mr. Clinton a year
from now, many of them felt betrayed during his first two years in office.
Many of his education achievements came about because of one of his worst
political defeats: the Republican takeover of Congress in the 1994
elections. And educators remain divided over some of Mr. Clinton's
priorities.
The first two years of Mr. Clinton's tenure in Washington set the stage
for his higher-education record in a way none at the time would have
predicted. During that time, Mr. Clinton focused on health care
(disastrously) and deficit reduction (successfully), and the results
weren't good for student aid.
After two years of working with a Democratic Congress, President Clinton
had raised the maximum Pell Grant by only $40, to $2,340, and had not
added any new money to the three campus-based student-aid programs. And
while he expressed support for affirmative action, he kept college leaders
waiting for more than a year before overturning a Bush-administration ban
on minority scholarships.
This is "what we are used to seeing from Reagan and Bush," Julianne Still
Thrift, president of Salem College and a strong supporter of Mr. Clinton,
complained to The Chronicle in 1993. "But a kick in the teeth hurts a lot
more from a friend."
When Republicans in Congress, armed with the "Contract With America,"
swept into power in January 1995, college leaders figured things would
only get worse. The Republicans threatened to cut the budgets of the
student-aid programs and close down the National Endowments for the Arts
and Humanities. In addition, they introduced legislation that would have
made college loans more expensive and dismantled federal
affirmative-action programs.
But in the end, the G.O.P. victory was a blessing in disguise for higher
education: Mr. Clinton was forced to focus his agenda, and turn his
rhetoric on education into action. While he agreed with the Republicans on
the importance of balancing the budget, he drew the line on cutting
education programs, including those important to colleges. And he stood
firmly behind affirmative action during the bleakest moments for
racial-preference policies.
In 1996, the public sided with the president, sending Mr. Clinton on to a
second term and taking seats away from the Republicans in the House of
Representatives.
Stung by the election fallout, Republican lawmakers changed their tone.
Today, affirmative action faces an uncertain future in the courts, but it
has faded as a campaign issue, and no significant legislation has been
introduced on the topic since 1998. And instead of fighting Mr. Clinton's
proposals on student aid, Republicans now seek to outbid him.
While in office, President Clinton has created a slew of higher-education
programs -- including AmeriCorps, direct lending, the Hope and Lifetime
Learning tax credits, and GEAR UP -- to try to cement his legacy as a
champion of education.
Yet his real legacy, many educators and lobbyists agree, is in reshaping
the nature of the debate on higher education in Washington. One need look
no further, they say, than the presidential campaign run by Gov. George W.
Bush of Texas: Absent were the familiar Republican refrains of shutting
down the Education Department, closing the arts and humanities endowments,
and banning racial preferences. Instead, Mr. Bush vowed to put another
$6-billion into Pell Grants and spend more money on historically black
colleges.
"President Clinton helped make higher education a bipartisan issue," says
Corye Barbour, legislative director for the United States Student
Association. "Both parties are clamoring to take credit for helping
students pay for college. That is a fundamental change that will make
things better for all of us."
Gene B. Sperling, the president's economic adviser, says Mr. Clinton has
put a priority on higher education because he knows from his own
experience how important it is to obtain a college degree.
"This is a president who was born fatherless, in a small town, with very
few role models to push him to go to college," Mr. Sperling says. "And
yet, education transformed his possibilities, allowing him to become a
Rhodes scholar and ultimately president of the United States.
"With each initiative he has introduced, he has tried to send the signal
that college is necessary and can be universal for everyone."
But as President Clinton prepares to depart the White House next month, it
would be wrong to suggest that the early jeers have turned to all-out
cheers.
On student aid, for example, he takes hits from both the right and the
left.
Some fiscal conservatives criticize the tuition tax credits, which provide
up to $1,500 per year, and the president's rhetoric about making two years
of college a universal entitlement. Ultimately, all citizens are
subsidizing the college-goers -- to the tune of billions of dollars per
year.
Moreover, colleges may be swiping some of the benefits of the tax credits
from students, by continuing to raise tuition at a rate that exceeds
inflation. "The more feed you put in the trough, the fatter the pig gets,"
says Jay A. Diskey, a former Republican spokesman for the House Committee
on Education and the Workforce.
The tax credits are also disliked by liberals in Mr. Clinton's own party.
They say the tax credits do little to increase access to college for
students from low-income families, which typically do not earn enough to
owe taxes. President Clinton should have focused on getting more money for
the need-based Pell Grants, they say.
"Under Clinton, there has been a massive expansion of assistance to
middle-income students," says Gary Orfield, a professor of education and
social policy at Harvard University. "But in terms of helping those with
the greatest need, there has been a real failure of leadership."
On affirmative action, some educators praise Mr. Clinton for effectively
defending the policy while preventing conservative Republicans from
turning it into a wedge issue. But others say the president missed a
chance to engage the country in a candid discussion about the differences
between racial preferences and other methods of creating diverse campuses,
such as outreach to low-income communities.
On science, Mr. Clinton's record is less controversial. He leaves office
with strong support from academic scientists, largely because of an
unprecedented spurt in financing for the National Institutes of Health in
the last two years. Scientists give equal credit to the
Republican-controlled Congress, which saw and raised Mr. Clinton's bids
for increased spending on science in almost every year of his tenure.
"This has been one of the few areas where it has been possible for genuine
bipartisanship in what has really been a horribly polarized time," says
Lewis M. Branscomb, a professor emeritus of public policy and corporate
management at Harvard, who has specialized in federal science policy.
In education policy, much of the debate during the Clinton administration
has been about priorities. Facing a $300-billion deficit, President
Clinton's first budget proposal called for cutting the campus-based
student-aid programs by $200-million and leaving the maximum Pell Grant at
its 1992 level of $2,300. At the same time, the president requested
$7.4-billion over four years for AmeriCorps, a new program that would
provide students with grants for college in exchange for one or two years
of community service.
Many student-aid administrators and lobbyists complained that the
administration was trying to shift money away from the federal need-based
aid programs to finance a pet program that would mostly benefit the middle
class. Their concerns were allayed when Congress scaled back AmeriCorps.
The program's budget has never exceeded $500-million.
Similar objections to other "legacy programs" have been voiced throughout
the Clinton era. In recent years, higher-education lobbyists have been
annoyed by GEAR UP, a Clinton program that helps disadvantaged
middle-school students prepare for college. Some believe that the hundreds
of millions of dollars allocated to GEAR UP would be better spent on the
federal TRIO programs, which have been helping disadvantaged students
enter and complete college since 1965.
"When this administration has been distracted by its own legacy
initiatives, we have had to publicly and noisily remind them to keep up
funding for the proven aid programs," says David L. Warren, president of
the National Association of Independent Colleges and Universities.
The greatest concern about Mr. Clinton's priorities arose in 1997, when he
pushed through his most significant college-related legislation. In a bill
to balance the federal budget, the president persuaded Republican
Congressional leaders to include about $35-billion over five years in
tuition tax credits.
The tax breaks had been a popular campaign promise during his bid for a
second term, but many people viewed the credits merely as pandering to the
middle class.
"There is always the temptation to do something to help the people who
vote," says Paul Simon, the former U.S. senator from Illinois who is now
director of the Public Policy Institute at Southern Illinois University at
Carbondale. "But it is the people who don't vote who often need the most
help."
Supporters of the tax credits say the critics are politically naive.
"Politics is the art of the possible," says Sen. Jack Reed, a Democrat
from Rhode Island. "The president was trying to find new sources of
support for colleges, and with the Republicans controlling Congress, the
only way to achieve his goal was through using the tax code."
Mr. Sperling, Mr. Clinton's economic adviser, says that the administration
never saw the tax credits as "a silver bullet" but as one component in a
larger strategy to make college more affordable. "We felt that we were
fighting for higher education on all fronts, and not as a tradeoff between
tax credits and Pell Grants."
The United States Student Association was among the vocal critics of the
tax credits. But Ms. Barbour, the group's legislative director, believes
it would be "unfortunate" to judge the president's higher-education legacy
simply on the basis of the tax credits. She especially praises the
president for introducing direct lending, which provides loans directly to
students through their colleges, eliminating the role of banks and
student-loan-guarantee agencies.
In 1993, the Clinton administration persuaded Congress to phase in direct
lending -- and phase out the guaranteed-loan program -- as a way to lower
costs to the government and to improve the delivery of loans to students.
But after the G.O.P. took control of Congress, in 1995, the administration
consented to demands from Republican lawmakers to allow the two loan
programs to coexist and compete.
The competition has sharply improved services for students and colleges,
as banks and guarantee agencies have slashed fees and streamlined loan
delivery in the hope of beating out direct lending. "Student loans are
much more affordable and a lot less scary now," Ms. Barbour says.
But many college leaders and lobbyists say that the administration's
greatest accomplishment has been to remove the federal student-aid
programs from the partisan fray by showing Republicans how damaging it is
to attack them. The G.O.P. won't soon forget the public furor that erupted
in 1995, when House Republicans threatened to cut student aid and raise
the cost of loans for students and their parents.
Indeed, in recent months Congressional Republicans have been trying to
one-up Democratic lawmakers on the 2001 budget for Pell Grants. As a
result, the Clinton administration and Congress have tentatively agreed to
increase the maximum Pell Grant by $500, to $3,800, the greatest
single-year raise the program has ever received.
"The student-aid programs are a lot safer now than they have been for a
long time," says Jack F. Jennings, director of the Center on Education
Policy and a former Democratic Congressional aide.
Affirmative action was already on the defensive in 1993, when Mr. Clinton
took office. Two years into his term, the floodgates broke. In 1995, the
Board of Regents of the University of California voted to eliminate the
use of racial preferences in hiring and admissions decisions. A year
later, California voters approved Proposition 209, taking the ban
statewide.
The policy fared no better in the courts. In 1994, a federal appeals court
shot down minority scholarships at the University of Maryland. A year
later, another federal appeals court barred the law school at the
University of Texas from considering race in admissions. The U.S. Supreme
Court declined to hear appeals of either case.
College leaders were stunned, and sought a rousing defense of affirmative
action from Mr. Clinton. While the Justice Department weighed in on the
court cases with briefs defending affirmative action, Mr. Clinton's own
comments were supportive but low key -- an apparent attempt to steer the
debate away from the combustible topic of racial preferences. In 1995, he
concluded a review of federal affirmative-action programs with a vow to
"mend, not end" them.
Advocates of affirmative action don't fault Mr. Clinton for that approach.
"If he had taken a strong stance, he probably would have turned even more
people off" to affirmative action, says Henry Ponder, the president of the
National Association for Equal Opportunity in Higher Education, which
represents historically black colleges and universities.
But in 1997, when flagship institutions in Georgia, Michigan, and
Washington were all hit with lawsuits over racial preferences, Mr. Clinton
turned up the rhetoric. In a speech at the University of California at San
Diego, he warned that minority enrollment would plummet without
affirmative action. "We will weaken our greatest universities, and it will
be more difficult to build the society we need in the 21st century," he
said.
As the challenges to affirmative action spread, Mr. Clinton ended most
talk of mending affirmative action. A panel that he appointed to study
racial issues released a report in 1998 that offered few novel ideas. It
recommended, for example, that educators more clearly explain the value of
diversity on college campuses. "The decision was made by the White House
staff that the report should be incremental rather than dramatic," says
Thomas H. Kean, president of Drew University and a member of the panel.
According to Mr. Kean, a former Republican governor of New Jersey, the
White House was reluctant to discuss alternatives to affirmative action,
given that its future is in the hands of the courts.
"There's nothing President Clinton believes in so strongly as civil rights
and affirmative action," Mr. Kean says. "He believes it to the core of his
being. I suspect in this area he did everything that he felt that he
could."
Even some critics of affirmative action, such as Ward Connerly, a
University of California regent, concede that Mr. Clinton was an able
advocate of the policy. The president's rhetoric "effectively derailed
that train coming down the track that was going to do away with
preferences," Mr. Connerly says.
But Mr. Connerly adds that Mr. Clinton's panel on race missed an
opportunity to educate people about the differences between racial
preferences and what he describes as "legitimate forms of affirmative
action," such as outreach.
With little leadership from Mr. Clinton, states in which racial
preferences have been banned have had to find alternatives on their own.
California, Florida, and Texas have turned to systems that admit some
students based solely on their class rank in high school. Mr. Connerly
contends that such scaled-down assessments of college preparation are
taking a toll on the quality of students entering those states' flagship
institutions.
"Some states are trying to find a way out of this morass on their own,"
Mr. Connerly says. "Other states are blithely waiting for the Supreme
Court to provide guidance. In short, we have paralysis, and Clinton has to
take some responsibility for that."
When the Clinton administration has tackled the question of race in
admissions, controversy has resulted. In 1999, for example, the Education
Department's Office for Civil Rights prepared a draft memorandum warning
that colleges might be violating federal anti-bias laws by relying heavily
on standardized-test scores in admissions decisions. The office cited as
evidence that minority students have lower average scores on such tests
than do white students. After college officials criticized the guidelines
as a federal intrusion into their own policymaking, the Education
Department toned down the document.
The head of the civil-rights office, Norma V. Cantu, also has been a key
player in the Clinton administration's efforts to ensure that women have
equal opportunities in athletics, to conform with a law known as Title IX.
The number of female college athletes has surged 46 percent during the
Clinton years, to 353,000, but some athletics officials say her strong-arm
approach has led many universities to cut men's teams.
"The Department of Education certainly was more active during the Clinton
years than during previous administrations in enforcing Title IX," says
Doris Dixon, director of federal relations for the National Collegiate
Athletic Association.
University scientists were optimistic when Mr. Clinton took office. They
hoped that his talk of the links between technological advancement and
economic development would translate into bigger budgets for research.
Eight years later, university scientists are largely pleased with his
efforts -- but do not uniformly call him their champion.
Throughout Mr. Clinton's tenure, Republican leaders in Congress have
approved larger budget increases for the N.I.H. -- the largest single
federal source of funds for university research -- than he has requested.
Lawmakers gave the agency unprecedented raises of 15 percent each year in
1999 and 2000, after Mr. Clinton had proposed increases of 8 percent and 2
percent.
University officials concede that Mr. Clinton's focus on deficit reduction
helped generate the surpluses that made the larger increases possible.
Some suspect that gamesmanship was at work in the budget numbers. Under
that view, Mr. Clinton deliberately proposed modest increases for the
N.I.H., knowing that the Republicans would add more. That practice allowed
Mr. Clinton to focus on other priorities in his budget proposals.
"The president has won on the budget by a very sophisticated strategy,"
says Donna E. Shalala, secretary of health and human services. "All of his
budget numbers are proposed with a full understanding that Republicans
have to take ownership of some programs, and get credit themselves. You
don't look at just the numbers he sent up [to Congress]; you have to look
at what we ended up with."
University leaders credit Mr. Clinton with taking other actions that
fostered a supportive climate for science. One of his first acts as
president, for example, was to lift a ban on the federal financing of
research using fetal tissue. And this year, he supported a policy allowing
federal research on embryonic stem cells. Both actions were opposed by
anti-abortion advocates and some religious leaders.
Scientists also praise Mr. Clinton for the quality of his science
appointments -- especially Harold E. Varmus, who served as N.I.H. director
from 1993 to 1999. The Nobel laureate brought top talent to work at the
agency, and is regarded as one of its most-effective ambassadors to
Congress ever.
Others argue that Mr. Clinton showed support for science by sparing it
from budget cuts as he sought to eliminate the deficit. But not all
scientific disciplines have thrived.
Budgets for federal agencies that support the physical sciences rose only
slightly faster than inflation, and more slowly than that of the
politically popular N.I.H., although they did keep pace with increases in
other civilian programs.
Somewhat belatedly to some researchers, Mr. Clinton this year attempted to
restore some parity by proposing a 17-percent budget increase for the
National Science Foundation for the 2001 fiscal year. The N.S.F. is the
federal agency most dedicated to financing all of the basic sciences.
Although the 1990's were hailed as an era of biological advances, many
scientists argue that further progress will be speeded by increased
financing of the physical sciences. For example, magnetic-resonance
imaging was developed with N.S.F. funds.
"History is not going to regard this as a president that advanced the
cause of science greatly," says Robert L. Park, director of the Washington
office of the American Physical Society. "There was no trip to the moon,
no really grand initiatives." Researchers do praise Mr. Clinton for
supporting the human-genome project, but Mr. Park contends that the effort
has been so popular and successful that no president would have opposed
it.
Scientists have split over Mr. Clinton's handling of two other expensive,
"big science" projects: the International Space Station, which the
administration has supported, and the Superconducting Supercollider, which
the president canceled in 1993. The supercollider was a giant, $10-billion
accelerator in Texas that researchers would have used to study the
fundamental nature of matter. Some scientists have called both projects
wasteful, while others describe them as essential tools to advance
science.
Nevertheless, researchers have praised Mr. Clinton for fostering the
development of information technology. His administration did that partly
by encouraging private telecommunications companies to take over key
segments of the Internet. During his tenure, the World Wide Web
transformed the Internet from a little-known tool for scholars into a
global communications utility in which fortunes are being made and lost.
At the same time, the Clinton administration turned its sights to advanced
network projects that may benefit scholars greatly. In 1996, the
administration started a multi-agency research project, called the Next
Generation Internet, which aims to develop networks that are 1,000 times
as fast as the current Internet.
Some scholars suggest that it has taken time for Mr. Clinton to come to
appreciate the importance of basic research.
Early in his administration, Mr. Clinton focused more on support for
applied research that could lead to commercially viable products. It was
part of his plan to pull the nation out of recession and to close trade
deficits with other nations, like Japan, that were seen as having a
technological edge.
The administration played down that approach after the recession ended and
criticism arose from Congressional Republicans. They argued that private
corporations were better suited than government officials to pick and
develop commercial spinoffs, and that the federal government should stick
to supporting basic research.
More recently, Mr. Clinton has given several speeches ardently backing
basic science. "As time went on, he got religion," says Mr. Branscomb, the
public-policy professor at Harvard.
With the end of Mr. Clinton's second term near, and the odds increasing
that Governor Bush will replace him, it is unclear which of the
president's legacy programs will survive.
AmeriCorps may still have life in it, as the program has picked up some
Republican support in recent years. Direct lending could be in trouble,
although it would be politically difficult for banks and guarantee
agencies to undo the changes they have made to help borrowers.
But even if Mr. Clinton's pet projects flounder, the programs that
colleges care about most should continue to thrive. In what will be an
almost evenly divided Congress, higher-education programs -- including
those that provide student aid and money for research -- could be among
the few areas in which Republicans and Democrats see eye to eye. And
President Clinton deserves no small measure of credit for that.
"Higher education seems to be an area in which an otherwise divided city
can come together," says Stanley O. Ikenberry, president of the American
Council on Education. "It wasn't like that in 1995, and it certainly was
not like that prior to Mr. Clinton's presidency."
Vincent Kiernan contributed to this article.
HIGHER EDUCATION'S WINNERS AND LOSERS DURING THE CLINTON ADMINISTRATION
Winners
MIDDLE-CLASS STUDENTS. College students and their families received the
biggest infusion of federal tuition aid in a generation. The bulk of the
aid came in the form of President Clinton's Hope and Lifetime Learning tax
credits, which tend to benefit students from middle-class rather than
low-income families.
STUDENT BORROWERS. Spurred on by competition from the Clinton
administration's direct-loan program, banks and student-loan guarantee
agencies were forced to cut their fees and improve their services.
COLLEGE COFFERS. The new tax credits, combined with growth in
knowledge-based industries, pushed enrollments -- and tuition revenue --
at many institutions to record levels. The booming stock market,
meanwhile, ushered in an era of unprecedented gains in the values of
endowments.
COLLEGES WITH LARGE MINORITY ENROLLMENTS. Historically black colleges and
colleges with large Hispanic enrollments saw federal programs for their
institutions increase substantially in the Clinton administration -- with
backing from both the White House and Congress.
BIOMEDICAL RESEARCH. The National Institutes of Health is on track to
double its budget in five years, due to a combination of factors,
including the political savvy of Harold E. Varmus, who served as director
from 1993 to 1999; strong bipartisan support from members of Congress; and
expectations that the agency is poised to promote an acceleration of
medical discovery.
TECHNOLOGY AND THE INTERNET. Vice President Al Gore was an influential
player in the development of the Internet, and the Clinton administration
has been a driving force behind Internet 2, a national computer network
that can carry even more data than its vaunted predecessor.
FEMALE ATHLETES. The Clinton administration's rigorous enforcement of
Title IX of the Education Amendments of 1972, the law banning gender
discrimination at institutions that receive federal funds, was a boon for
women's athletics. The number of female college athletes shot up 46
percent from 1992-93 to 1998-99, compared with an 11-percent gain for men.
Losers
AFFIRMATIVE ACTION. Clinton-administration officials strongly backed the
use of racial preferences in higher education, but federal courts, state
boards, and state referendums led to the most significant rollback of
affirmative action in its history.
NON-REVENUE MEN'S TEAMS. Big-money programs like football and basketball
thrived, but several universities cut men's teams in sports such as
swimming, track, and wrestling to comply with the Office for Civil Rights'
interpretation of Title IX.
SOCIAL CONSERVATIVES. Despite repeated efforts by conservative Republicans
to eliminate the National Endowments for the Arts and Humanities during
much of the Clinton administration, the cultural agencies survived, and
their budgets are now growing modestly. And, over the objections of
anti-abortion activists, Mr. Clinton approved federal financing for
medical research involving fetal tissue and stem cells.
Survivors
CLINTON'S PET PROJECTS. The Clinton administration championed new programs
that aimed to promote volunteerism (AmeriCorps), prepare students from
low-income families for college (GEAR UP), and improve the graduation
rates of disadvantaged college students (College Completion Challenge
Grants). College lobbyists worry that the administration's enthusiasm for
these "legacy programs" has come at the expense of support for the core
student-aid programs. Some of the pet projects may not survive for long
once the Clinton administration ends.
NEED-BASED FINANCIAL AID. Although some of the core student-aid programs,
like the Pell Grant and College Work-Study Programs, received significant
budget increases during the Clinton administration, most student-aid
experts agree that the budgets did not grow enough to boost the
college-going rates of students from the poorest families.
STUDENT-LOAN INDUSTRY. The creation of direct lending in 1993 threatened
to run banks and guarantee agencies out of the federal student-loan
program. Seven years later, these entities continue to control two-thirds
of student-loan volume. Now, the direct-loan program is facing an
uncertain future.
SOURCE: Chronicle reporting
http://chronicle.com
Section: Government & Politics
Page: A27
Copyright 2000 by The Chronicle of Higher Education
RECORD TYPE: PRESIDENTIAL (NOTES MAIL)
CREATOR: James R. Kvaal ( CN=James R. Kvaal/OU=OPD/O=EOP [ OPD ])
CREATION DATE/TIME: 3-JAN-2001 20:59:03.00
SUBJECT: outline for chronicle of higher ed
TO: Gene B. Sperling ( CN=Gene B. Sperling/OU=OPD/O=EOP@EOP. OPD
READ:UNKNOWN
TO: Amy Mall (CN=Amy Mall/OU=OPD/O=EOP@EOP [ OPD ])
READ:UNKNOWN
TO: Sylvia M. Vellino (CN=Sylvia M. Vellino/OU=OPD/O=EOP@EOP [ OPD )
READ:UNKNOWN
TO: Patrick M. Dorton ( CN=Patrick M. Dorton/OU=OPD/O=EOP@EOP [ OPD ])
READ:UNKNOWN
TEXT:
Gene -- attached is my suggested outline for the Chronicle piece. they
would welcome 2500 words and want us to use the space to engage on our
strategy and philosophy behind our accomplishments, so we have the
opportunity to do something cool here. would welcome your comments.
Forwarded by James R. Kvaal/OPD/EOP on 01/03/2001
08:56 PM
James R. Kvaal
12/11/2000 09:43:40 AM
Record Type: Record
To:
Gene B. Sperling/OPD/EOP@EOP, Patrick M. Dorton/OPD/EOP@EOP,
Amy Mall/OPD/EOP@EOP, Sylvia M. Vellino/OPD/EOP@EOP
cc:
Subject:
chronicle of higher ed -- clinton legacy
The Chronicle of Higher Education
From the issue dated December 15, 2000
The Clinton Legacy in Higher Education
By JEFFREY BRAINARD, STEPHEN BURD, and BEN GOSE
Washington
As Bill Clinton prepared to become president eight years ago, most college
officials glowed with excitement. During 12 years of Republican control of
the White House, they had endured countless proposed budget cuts and
plenty of biting ideological attacks.
At last, they felt, they would have a real "education president." After
all, Mr. Clinton was a Rhodes scholar, had pushed far-reaching education
reforms as Arkansas's governor, surrounded himself with wonkish friends
from academe (and actually read their books), and talked constantly about
education. In October of 1992, more than 200 college presidents,
administrators, and trustees took the unusual step of endorsing Mr.
Clinton in an advertisement published in The Chronicle.
Today, many of those educators are again singing his praises, grateful for
new programs, huge infusions of money for student aid and research, and
the attention he showered on higher education during the past eight years.
But a close look at the Clinton record in the White House reveals a more
complicated picture.
Although college lobbyists may be feeling nostalgic for Mr. Clinton a year
from now, many of them felt betrayed during his first two years in office.
Many of his education achievements came about because of one of his worst
political defeats: the Republican takeover of Congress in the 1994
elections. And educators remain divided over some of Mr. Clinton's
priorities.
The first two years of Mr. Clinton's tenure in Washington set the stage
for his higher-education record in a way none at the time would have
predicted. During that time, Mr. Clinton focused on health care
(disastrously) and deficit reduction (successfully), and the results
weren't good for student aid.
After two years of working with a Democratic Congress, President Clinton
had raised the maximum Pell Grant by only $40, to $2,340, and had not
added any new money to the three campus-based student-aid programs. And
while he expressed support for affirmative action, he kept college leaders
waiting for more than a year before overturning a Bush-administration ban
on minority scholarships.
This is "what we are used to seeing from Reagan and Bush," Julianne Still
Thrift, president of Salem College and a strong supporter of Mr. Clinton,
complained to The Chronicle in 1993. "But a kick in the teeth hurts a lot
more from a friend."
When Republicans in Congress, armed with the "Contract With America,"
swept into power in January 1995, college leaders figured things would
only get worse. The Republicans threatened to cut the budgets of the
student-aid programs and close down the National Endowments for the Arts
and Humanities. In addition, they introduced legislation that would have
made college loans more expensive and dismantled federal
affirmative-action programs.
But in the end, the G.O.P. victory was a blessing in disguise for higher
education: Mr. Clinton was forced to focus his agenda, and turn his
rhetoric on education into action. While he agreed with the Republicans on
the importance of balancing the budget, he drew the line on cutting
education programs, including those important to colleges. And he stood
firmly behind affirmative action during the bleakest moments for
racial-preference policies.
In 1996, the public sided with the president, sending Mr. Clinton on to a
second term and taking seats away from the Republicans in the House of
Representatives.
Stung by the election fallout, Republican lawmakers changed their tone.
Today, affirmative action faces an uncertain future in the courts, but it
has faded as a campaign issue, and no significant legislation has been
introduced on the topic since 1998. And instead of fighting Mr. Clinton's
proposals on student aid, Republicans now seek to outbid him.
While in office, President Clinton has created a slew of higher-education
programs -- including AmeriCorps, direct lending, the Hope and Lifetime
Learning tax credits, and GEAR UP -- to try to cement his legacy as a
champion of education.
Yet his real legacy, many educators and lobbyists agree, is in reshaping
the nature of the debate on higher education in Washington. One need look
no further, they say, than the presidential campaign run by Gov. George W.
Bush of Texas: Absent were the familiar Republican refrains of shutting
down the Education Department, closing the arts and humanities endowments,
and banning racial preferences. Instead, Mr. Bush vowed to put another
$6-billion into Pell Grants and spend more money on historically black
colleges.
"President Clinton helped make higher education a bipartisan issue," says
Corye Barbour, legislative director for the United States Student
Association. "Both parties are clamoring to take credit for helping
students pay for college. That is a fundamental change that will make
things better for all of us."
Gene B. Sperling, the president's economic adviser, says Mr. Clinton has
put a priority on higher education because he knows from his own
experience how important it is to obtain a college degree.
"This is a president who was born fatherless, in a small town, with very
few role models to push him to go to college," Mr. Sperling says. "And
yet, education transformed his possibilities, allowing him to become a
Rhodes scholar and ultimately president of the United States.
"With each initiative he has introduced, he has tried to send the signal
that college is necessary and can be universal for everyone."
But as President Clinton prepares to depart the White House next month, it
would be wrong to suggest that the early jeers have turned to all-out
cheers.
On student aid, for example, he takes hits from both the right and the
left.
Some fiscal conservatives criticize the tuition tax credits, which provide
up to $1,500 per year, and the president's rhetoric about making two years
of college a universal entitlement. Ultimately, all citizens are
subsidizing the college-goers -- to the tune of billions of dollars per
year.
Moreover, colleges may be swiping some of the benefits of the tax credits
from students, by continuing to raise tuition at a rate that exceeds
inflation. "The more feed you put in the trough, the fatter the pig gets,"
says Jay A. Diskey, a former Republican spokesman for the House Committee
on Education and the Workforce.
The tax credits are also disliked by liberals in Mr. Clinton's own party.
They say the tax credits do little to increase access to college for
students from low-income families, which typically do not earn enough to
owe taxes. President Clinton should have focused on getting more money for
the need-based Pell Grants, they say.
"Under Clinton, there has been a massive expansion of assistance to
middle-income students," says Gary Orfield, a professor of education and
social policy at Harvard University. "But in terms of helping those with
the greatest need, there has been a real failure of leadership."
On affirmative action, some educators praise Mr. Clinton for effectively
defending the policy while preventing conservative Republicans from
turning it into a wedge issue. But others say the president missed a
chance to engage the country in a candid discussion about the differences
between racial preferences and other methods of creating diverse campuses,
such as outreach to low-income communities.
On science, Mr. Clinton's record is less controversial. He leaves office
with strong support from academic scientists, largely because of an
unprecedented spurt in financing for the National Institutes of Health in
the last two years. Scientists give equal credit to the
Republican-controlled Congress, which saw and raised Mr. Clinton's bids
for increased spending on science in almost every year of his tenure.
"This has been one of the few areas where it has been possible for genuine
bipartisanship in what has really been a horribly polarized time," says
Lewis M. Branscomb, a professor emeritus of public policy and corporate
management at Harvard, who has specialized in federal science policy,
In education policy, much of the debate during the Clinton administration
has been about priorities. Facing a $300-billion deficit, President
Clinton's first budget proposal called for cutting the campus-based
student-aid programs by $200-million and leaving the maximum Pell Grant at
its 1992 level of $2,300. At the same time, the president requested
$7.4-billion over four years for AmeriCorps, a new program that would
provide students with grants for college in exchange for one or two years
of community service.
Many student-aid administrators and lobbyists complained that the
administration was trying to shift money away from the federal need-based
aid programs to finance a pet program that would mostly benefit the middle
class. Their concerns were allayed when Congress scaled back AmeriCorps.
The program's budget has never exceeded $500-million.
Similar objections to other "legacy programs" have been voiced throughout
the Clinton era. In recent years, higher-education lobbyists have been
annoyed by GEAR UP, a Clinton program that helps disadvantaged
middle-school students prepare for college. Some believe that the hundreds
of millions of dollars allocated to GEAR UP would be better spent on the
federal TRIO programs, which have been helping disadvantaged students
enter and complete college since 1965.
"When this administration has been distracted by its own legacy
initiatives, we have had to publicly and noisily remind them to keep up
funding for the proven aid programs," says David L. Warren, president of
the National Association of Independent Colleges and Universities.
The greatest concern about Mr. Clinton's priorities arose in 1997, when he
pushed through his most significant college-related legislation. In a bill
to balance the federal budget, the president persuaded Republican
Congressional leaders to include about $35-billion over five years in
tuition tax credits.
The tax breaks had been a popular campaign promise during his bid for a
second term, but many people viewed the credits merely as pandering to the
middle class.
"There is always the temptation to do something to help the people who
vote," says Paul Simon, the former U.S. senator from Illinois who is now
director of the Public Policy Institute at Southern Illinois University at
Carbondale. "But it is the people who don't vote who often need the most
help."
Supporters of the tax credits say the critics are politically naive.
"Politics is the art of the possible," says Sen. Jack Reed, a Democrat
from Rhode Island. "The president was trying to find new sources of
support for colleges, and with the Republicans controlling Congress, the
only way to achieve his goal was through using the tax code."
Mr. Sperling, Mr. Clinton's economic adviser, says that the administration
never saw the tax credits as "a silver bullet" but as one component in a
larger strategy to make college more affordable. "We felt that we were
fighting for higher education on all fronts, and not as a tradeoff between
tax credits and Pell Grants."
The United States Student Association was among the vocal critics of the
tax credits. But Ms. Barbour, the group's legislative director, believes
it would be "unfortunate" to judge the president's higher-education legacy
simply on the basis of the tax credits. She especially praises the
president for introducing direct lending, which provides loans directly to
students through their colleges, eliminating the role of banks and
student-loan-guarantee agencies.
In 1993, the Clinton administration persuaded Congress to phase in direct
lending -- and phase out the guaranteed-loan program -- as a way to lower
costs to the government and to improve the delivery of loans to students.
But after the G.O.P. took control of Congress, in 1995, the administration
consented to demands from Republican lawmakers to allow the two loan
programs to coexist and compete.
The competition has sharply improved services for students and colleges,
as banks and guarantee agencies have slashed fees and streamlined loan
delivery in the hope of beating out direct lending. "Student loans are
much more affordable and a lot less scary now," Ms. Barbour says.
But many college leaders and lobbyists say that the administration's
greatest accomplishment has been to remove the federal student-aid
programs from the partisan fray by showing Republicans how damaging it is
to attack them. The G.O.P. won't soon forget the public furor that erupted
in 1995, when House Republicans threatened to cut student aid and raise
the cost of loans for students and their parents.
Indeed, in recent months Congressional Republicans have been trying to
one-up Democratic lawmakers on the 2001 budget for Pell Grants. As a
result, the Clinton administration and Congress have tentatively agreed to
increase the maximum Pell Grant by $500, to $3,800, the greatest
single-year raise the program has ever received.
"The student-aid programs are a lot safer now than they have been for a
long time," says Jack F. Jennings, director of the Center on Education
Policy and a former Democratic Congressional aide.
Affirmative action was already on the defensive in 1993, when Mr. Clinton
took office. Two years into his term, the floodgates broke. In 1995, the
Board of Regents of the University of California voted to eliminate the
use of racial preferences in hiring and admissions decisions. A year
later, California voters approved Proposition 209, taking the ban
statewide.
The policy fared no better in the courts. In 1994, a federal appeals court
shot down minority scholarships at the University of Maryland. A year
later, another federal appeals court barred the law school at the
University of Texas from considering race in admissions. The U.S. Supreme
Court declined to hear appeals of either case.
College leaders were stunned, and sought a rousing defense of affirmative
action from Mr. Clinton. While the Justice Department weighed in on the
court cases with briefs defending affirmative action, Mr. Clinton's own
comments were supportive but low key -- an apparent attempt to steer the
debate away from the combustible topic of racial preferences. In 1995, he
concluded a review of federal affirmative-action programs with a vow to
"mend, not end" them.
Advocates of affirmative action don't fault Mr. Clinton for that approach.
"If he had taken a strong stance, he probably would have turned even more
people off" to affirmative action, says Henry Ponder, the president of the
National Association for Equal Opportunity in Higher Education, which
represents historically black colleges and universities.
But in 1997, when flagship institutions in Georgia, Michigan, and
Washington were all hit with lawsuits over racial preferences, Mr. Clinton
turned up the rhetoric. In a speech at the University of California at San
Diego, he warned that minority enrollment would plummet without
affirmative action. "We will weaken our greatest universities, and it will
be more difficult to build the society we need in the 21st century," he
said.
As the challenges to affirmative action spread, Mr. Clinton ended most
talk of mending affirmative action. A panel that he appointed to study
racial issues released a report in 1998 that offered few novel ideas. It
recommended, for example, that educators more clearly explain the value of
diversity on college campuses. "The decision was made by the White House
staff that the report should be incremental rather than dramatic," says
Thomas H. Kean, president of Drew University and a member of the panel.
According to Mr. Kean, a former Republican governor of New Jersey, the
White House was reluctant to discuss alternatives to affirmative action,
given that its future is in the hands of the courts.
"There's nothing President Clinton believes in so strongly as civil rights
and affirmative action," Mr. Kean says. "He believes it to the core of his
being. I suspect in this area he did everything that he felt that he
could."
Even some critics of affirmative action, such as Ward Connerly, a
University of California regent, concede that Mr. Clinton was an able
advocate of the policy. The president's rhetoric "effectively derailed
that train coming down the track that was going to do away with
preferences," Mr. Connerly says.
But Mr. Connerly adds that Mr. Clinton's panel on race missed an
opportunity to educate people about the differences between racial
preferences and what he describes as "legitimate forms of affirmative
action," such as outreach.
With little leadership from Mr. Clinton, states in which racial
preferences have been banned have had to find alternatives on their own.
California, Florida, and Texas have turned to systems that admit some
students based solely on their class rank in high school. Mr. Connerly
contends that such scaled-down assessments of college preparation are
taking a toll on the quality of students entering those states' flagship
institutions.
"Some states are trying to find a way out of this morass on their own,"
Mr. Connerly says. "Other states are blithely waiting for the Supreme
Court to provide guidance. In short, we have paralysis, and Clinton has to
take some responsibility for that."
When the Clinton administration has tackled the question of race in
admissions, controversy has resulted. In 1999, for example, the Education
Department's Office for Civil Rights prepared a draft memorandum warning
that colleges might be violating federal anti-bias laws by relying heavily
on standardized-test scores in admissions decisions. The office cited as
evidence that minority students have lower average scores on such tests
than do white students. After college officials criticized the guidelines
as a federal intrusion into their own policymaking, the Education
Department toned down the document.
The head of the civil-rights office, Norma V. Cantu, also has been a key
player in the Clinton administration's efforts to ensure that women have
equal opportunities in athletics, to conform with a law known as Title IX.
The number of female college athletes has surged 46 percent during the
Clinton years, to 353,000, but some athletics officials say her strong-arm
approach has led many universities to cut men's teams.
"The Department of Education certainly was more active during the Clinton
years than during previous administrations in enforcing Title IX," says
Doris Dixon, director of federal relations for the National Collegiate
Athletic Association.
University scientists were optimistic when Mr. Clinton took office. They
hoped that his talk of the links between technological advancement and
economic development would translate into bigger budgets for research.
Eight years later, university scientists are largely pleased with his
efforts -- but do not uniformly call him their champion.
Throughout Mr. Clinton's tenure, Republican leaders in Congress have
approved larger budget increases for the N.I.H. -- the largest single
federal source of funds for university research -- than he has requested.
Lawmakers gave the agency unprecedented raises of 15 percent each year in
1999 and 2000, after Mr. Clinton had proposed increases of 8 percent and 2
percent.
University officials concede that Mr. Clinton's focus on deficit reduction
helped generate the surpluses that made the larger increases possible.
Some suspect that gamesmanship was at work in the budget numbers. Under
that view, Mr. Clinton deliberately proposed modest increases for the
N.I.H., knowing that the Republicans would add more. That practice allowed
Mr. Clinton to focus on other priorities in his budget proposals.
"The president has won on the budget by a very sophisticated strategy,"
says Donna E. Shalala, secretary of health and human services. "All of his
budget numbers are proposed with a full understanding that Republicans
have to take ownership of some programs, and get credit themselves. You
don't look at just the numbers he sent up [to Congress]; you have to look
at what we ended up with."
University leaders credit Mr. Clinton with taking other actions that
fostered a supportive climate for science. One of his first acts as
president, for example, was to lift a ban on the federal financing of
research using fetal tissue. And this year, he supported a policy allowing
federal research on embryonic stem cells. Both actions were opposed by
anti-abortion advocates and some religious leaders:
Scientists also praise Mr. Clinton for the quality of his science
appointments -- especially Harold E. Varmus, who served as N.I.H. director
from 1993 to 1999. The Nobel laureate brought top talent to work at the
agency, and is regarded as one of its most-effective ambassadors to
Congress ever.
Others argue that Mr. Clinton showed support for science by sparing it
from budget cuts as he sought to eliminate the deficit. But not all
scientific disciplines have thrived.
Budgets for federal agencies that support the physical sciences rose only
slightly faster than inflation, and more slowly than that of the
politically popular N.I.H., although they did keep pace with increases in
other civilian programs.
Somewhat belatedly to some researchers, Mr. Clinton this year attempted to
restore some parity by proposing a 17-percent budget increase for the
National Science Foundation for the 2001 fiscal year. The N.S.F. is the
federal agency most dedicated to financing all of the basic sciences.
Although the 1990's were hailed as an era of biological advances, many
scientists argue that further progress will be speeded by increased
financing of the physical sciences. For example, magnetic-resonance
imaging was developed with N.S.F. funds.
"History is not going to regard this as a president that advanced the
cause of science greatly," says Robert L. Park, director of the Washington
office of the American Physical Society. "There was no trip to the moon,
no really grand initiatives." Researchers do praise Mr. Clinton for
supporting the human-genome project, but Mr. Park contends that the effort
has been so popular and successful that no president would have opposed
it.
Scientists have split over Mr. Clinton's handling of two other expensive,
"big science" projects: the International Space Station, which the
administration has supported, and the Superconducting Supercollider, which
the president canceled in 1993. The supercollider was a giant, $10-billion
accelerator in Texas that researchers would have used to study the
fundamental nature of matter. Some scientists have called both projects
wasteful, while others describe them as essential tools to advance
science.
Nevertheless, researchers have praised Mr. Clinton for fostering the
development of information technology. His administration did that partly
by encouraging private telecommunications companies to take over key
segments of the Internet. During his tenure, the World Wide Web
transformed the Internet from a little-known tool for scholars into a
global communications utility in which fortunes are being made and lost.
At the same time, the Clinton administration turned its sights to advanced
network projects that may benefit scholars greatly. In 1996, the
administration started a multi-agency research project, called the Next
Generation Internet, which aims to develop networks that are 1,000 times
as fast as the current Internet.
Some scholars suggest that it has taken time for Mr. Clinton to come to
appreciate the importance of basic research.
Early in his administration, Mr. Clinton focused more on support for
applied research that could lead to commercially viable products. It was
part of his plan to pull the nation out of recession and to close trade
deficits with other nations, like Japan, that were seen as having a
technological edge.
The administration played down that approach after the recession ended and
criticism arose from Congressional Republicans. They argued that private
corporations were better suited than government officials to pick and
develop commercial spinoffs, and that the federal government should stick
to supporting basic research.
More recently, Mr. Clinton has given several speeches ardently backing
basic science. "As time went on, he got religion," says Mr. Branscomb, the
public-policy professor at Harvard.
With the end of Mr. Clinton's second term near, and the odds increasing
that Governor Bush will replace him, it is unclear which of the
president's legacy programs will survive.
AmeriCorps may still have life in it, as the program has picked up some
Republican support in recent years. Direct lending could be in trouble,
although it would be politically difficult for banks and guarantee
agencies to undo the changes they have made to help borrowers.
But even if Mr. Clinton's pet projects flounder, the programs that
colleges care about most should continue to thrive. In what will be an
almost evenly divided Congress, higher-education programs -- including
those that provide student aid and money for research -- could be among
the few areas in which Republicans and Democrats see eye to eye. And
President Clinton deserves no small measure of credit for that.
"Higher education seems to be an area in which an otherwise divided city
can come together," says Stanley O. Ikenberry, president of the American
Council on Education. "It wasn't like that in 1995, and it certainly was
not like that prior to Mr. Clinton's presidency."
Vincent Kiernan contributed to this article.
HIGHER EDUCATION'S WINNERS AND LOSERS DURING THE CLINTON ADMINISTRATION
Winners
MIDDLE-CLASS STUDENTS. College students and their families received the
biggest infusion of federal tuition aid in a generation. The bulk of the
aid came in the form of President Clinton's Hope and Lifetime Learning tax
credits, which tend to benefit students from middle-class rather than
low-income families.
STUDENT BORROWERS. Spurred on by competition from the Clinton
administration's direct-loan program, banks and student-loan guarantee
agencies were forced to cut their fees and improve their services.
COLLEGE COFFERS. The new tax credits, combined with growth in
knowledge-based industries, pushed enrollments -- and tuition revenue --
at many institutions to record levels. The booming stock market,
meanwhile, ushered in an era of unprecedented gains in the values of
endowments.
COLLEGES WITH LARGE MINORITY ENROLLMENTS. Historically black colleges and
colleges with large Hispanic enrollments saw federal programs for their
institutions increase substantially in the Clinton administration -- with
backing from both the White House and Congress.
BIOMEDICAL RESEARCH. The National Institutes of Health is on track to
double its budget in five years, due to a combination of factors,
including the political savvy of Harold E. Varmus, who served as director
from 1993 to 1999; strong bipartisan support from members of Congress; and
expectations that the agency is poised to promote an acceleration of
medical discovery.
TECHNOLOGY AND THE INTERNET. Vice President Al Gore was an influential
player in the development of the Internet, and the Clinton administration
has been a driving force behind Internet 2, a national computer network
that can carry even more data than its vaunted predecessor.
FEMALE ATHLETES. The Clinton administration's rigorous enforcement of
Title IX of the Education Amendments of 1972, the law banning gender
discrimination at institutions that receive federal funds, was a boon for
women's athletics. The number of female college athletes shot up 46
percent from 1992-93 to 1998-99, compared with an 11-percent gain for men.
Losers
AFFIRMATIVE ACTION. Clinton-administration officials strongly backed the
use of racial preferences in higher education, but federal courts, state
boards, and state referendums led to the most significant rollback of
affirmative action in its history.
NON-REVENUE MEN'S TEAMS. Big-money programs like football and basketball
thrived, but several universities cut men's teams in sports such as
swimming, track, and wrestling to comply with the Office for Civil Rights'
interpretation of Title IX.
SOCIAL CONSERVATIVES. Despite repeated efforts by conservative Republicans
to eliminate the National Endowments for the Arts and Humanities during
much of the Clinton administration, the cultural agencies survived, and
their budgets are now growing modestly. And, over the objections of
anti-abortion activists, Mr. Clinton approved federal financing for
medical research involving fetal tissue and stem cells.
Survivors
CLINTON'S PET PROJECTS. The Clinton administration championed new programs
that aimed to promote volunteerism (AmeriCorps), prepare students from
low-income families for college (GEAR UP), and improve the graduation
rates of disadvantaged college students (College Completion Challenge
Grants). College lobbyists worry that the administration's enthusiasm for
these "legacy programs" has come at the expense of support for the core
student-aid programs. Some of the pet projects may not survive for long
once the Clinton administration ends.
NEED-BASED FINANCIAL AID. Although some of the core student-aid programs, like the Pell Grant and
College Work-Study Programs, received significant budget increases during
the Clinton administration, most student-aid experts agree that the
budgets did not grow enough to boost the college-going rates of students
from the poorest families.
STUDENT-LOAN INDUSTRY. The creation of direct lending in 1993 threatened
to run banks and guarantee agencies out of the federal student-loan
program. Seven years later, these entities continue to control two-thirds
of student-loan volume. Now, the direct-loan program is facing an
uncertain future.
SOURCE: Chronicle reporting
http://chronicle.com
Section: Government & Politics
Page: A27
Copyright , 2000 by The Chronicle of Higher Education
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Outline: Chronicle of Higher Education Piece
The Chronicle says we have up to 2,500 words, so we have space to do something interesting.
They stress that they are not interested in a rote recitation of our programs or anything repetitive
of their article, but the philosophy and strategy behind our choices and a roadmap for the future.
I. President Clinton Prioritized Education
Higher education was a major component of President Clinton's economic plan and a top
priority for his Administration.
He has overseen the largest expansion in federal support for higher education since the G.I.
Bill. Considers higher education one of his most important accomplishments. Has created a
new bipartisan consensus on higher education.
He understands the power of education to create opportunities. Credits student aid with
allowing him to earn his college and law degrees and become president.
II. The Clinton-Gore Philosophy on Higher Education (What We Did and Why)
A. More than Doubling Student Aid
Hope Scholarships and the Lifetime Learning Tax Credit
Landmark accomplishment. Now provide $7.5 billion a year in tax relief for
higher education to 10 million families, more than Pell was in 1993 ($6.5
billion)-and when Lifetime Learning phases-in in 2003, will be $9.1 billion.
Tax relief was inevitable in 1997; President Clinton seized the opportunity to
target it to meet middle class families' needs.
Critics say it is a windfall for colleges, but because they are not dollar-for-dollar
reimbursements, they discourage cost-shifting.
Critics say doesn't expand opportunity for low-income students but: (1) 50% of
the benefit goes to families with AGI under $50,000 and (2) middle-class families
are also struggling with rising tuition and student loan debts.
Accompanied by Record Investments in Pell
Max grant from $2,300 to $3,750-an increase of $2.3 billion per year.
Pell is accurately labeled the foundation of student aid. Proud that there is now a
bipartisan consensus and the parties try to outbid each other.
Also fought for one million work-study jobs.
B. New Paths to College.
Financial aid alone is not enough. Research shows that disadvantaged students
need higher expectations early on, stronger academic preparation, a strong adult
presence that encourages education.
In this era of dispute over affirmative action, this is a solution we should all come
together behind.
GEAR UP. Based on Eugene Lang and Project GRAD. Combine best of research
and experience. Early results are promising.
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TRIO.
AmeriCorps.
C. Student Loan Reform
Began with the Direct Student Loan Program.
The Direct Loan system applies free-market principles effectively: It raises capital
less expensively through U.S. Treasury bond sales and delivers and services loans
through competitively awarded, performance-based contracts with private firms. It
has helped more than 5 million students pay for college since it was founded in 1994.
Over 1,200 schools chose to leave the guaranteed loan program and join Direct
Lending during its first three years. Direct lending offers one set of procedures, fast
and reliable delivery of funds, less paperwork, electronic loan processing, and a
customer service emphasis.
A sliding scale allows graduates to adjust their monthly repayments depending on
their income, as well as other flexible repayment options, help them to undertake
public service careers without fear of being unable to repay their loans.
Direct student loans are much less expensive than guaranteed loans under current
interest rate projections. This year, for example, every $100 in guaranteed student
loans will cost taxpayers $15.22. But every $100 in direct loans will actually "earn"
taxpayers $2.70, because interest and fees paid by students are higher than federal
costs.
If all student loans were direct loans, taxpayers would save about $6 billion next year
alone-enough to increase the $9 billion Pell grant program by two-thirds.
The Direct Loan program created competition and federal savings, two tools to
improve the program for students, schools, and taxpayers.
Lower interest rates and fees. Students now save $1,300 in interest and fees over
the life of a typical $10,000 student loan, compared to the cost of that loan in 1993.
Partly as a result of direct loan legislation that mandated interest rate changes in 1993
and 1998. Also, competition between the programs has lowered costs for students.
Improved service. A 1999 independent assessment by Macro International
concluded, "Virtually no one disputes that the operation of an alternative loan-
program has produced a competition that inspired innovation and service-to the
benefit of all borrowers and schools."
Created a political dynamic that allowed us to trim lender subsidies. Federal
subsidies for banks and guaranty agencies have also been pared down, saving
taxpayers an additional $2 billion.
Fewer loan defaults. The cohort default rate has fallen from 22.4 percent to 6.9
percent. The decrease has saved taxpayers $7 billion so far. Collections on defaulted
loans have quadrupled, from $1 billion to $4 billion, under this Administration,
saving $7 billion so far.
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III.
Looking Forward (Maybe these should be worked into the relevant parts of section II
instead of being on its own?)
Sustain commitment to appropriations, especially Pell, GEAR UP, and TRIO.
Higher education should be on the agenda again for tax cuts. College Opportunity
Tax Cut, Sen. Schumer.
Focus on college completion. Too many students borrow and then drop out. Better
academic preparation is part of the answer, but also need to provide support services,
scholarship aid, welcoming environments for minorities. (Need to figure how to handle
TRIO on this subject.)
Continue student loan reform.
Lawsuit. The Bush Education Department should aggressively defend itself against
the lender lawsuit, which would raise costs to students in the direct loan program,
undermine competition and thereby threaten borrower discounts in the guaranteed
loan program, remove a tool that fights defaults, and raise federal costs. This lawsuit
is an attempt by special interests - lenders and their associations - to increase their
profits by making student loans more expensive for students and their families. The
fee reduction and repayment incentives are entirely consistent with the Department's
legal authority.
Guaranteed loan subsidies. Market mechanisms study group, coming out of the
1998 reauthorization, may point the way to more efficiently setting student loan
interest rates.
2003 Bug. The student loan interest rate is scheduled to change in 2003, saving
students (and costing lenders) billions. Should seek to use this opportunity reduce
costs to students and make lender subsidies more reasonable.
Maybe:
Experiment with Front-Loading Pell. (Bush has proposed. Unproven but probably
worth testing. However this idea is very unpopular with the community and
congressional Dems.)
Revamp Needs Analysis Formula. (Current formula is 100 questions, which is
unnecessarily burdensome to say the least. Some scholars (and I) think its lack of
transparency probably discourages low-income families from applying because it's
confusing and difficult, particularly if they are unsure whether they are going to college -
ironically the families who student aid is trying to reach.)
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