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What the election results mean: Elizabeth Farnsworth interviews Henry Cisneros, and Margaret Warner takes on Senator Don Nickles.

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ELIZABETH FARNSWORTH: And joining us now for a Newsmaker interview is Henry Cisneros, the Secretary of Housing & Urban Development, and a key member of the White House political and strategic team during this campaign. Welcome, Mr. Secretary, and congratulations.

HENRY CISNEROS, Secretary, Housing & Urban Development: Thank you very much.

ELIZABETH FARNSWORTH: Were you surprised that the Democrats didn't take control of the House? Had you expected that to happen?

SEC. CISNEROS: I certainly had hoped that the Democrats would be able to win the House and expected that we would. I told the President a week or so ago from being out on the road that I thought we would win the House. The surge of the President's popularity about a week ago was strong enough that I thought he would bring a Democratic House. I think the Republicans used some of these finance issues effectively toward the end, effectively I say politically because they have some of the same issues affecting their party, uh, but they were able to use the issue in a way that I think flattened some of the Democratic surge in the last say week to ten days and was enough to prevent Democrats from winning the House of Representatives.

ELIZABETH FARNSWORTH: And now that the election has provided this divided result, how would you characterize the message that was sent by voters?

SEC. CISNEROS: Well, I think the American people said that they wanted Bill Clinton to be the President but that they also were concerned that there be sufficient checks on some of these questions. Um, I think that on the question of the presidency, there was a core truth about this election. I've discovered over the years that elections have a kind of a truth about them. There's a core of truth there that no amount of campaigning is going to change, no amount of sort of message massaging is going to change, and the core truth in this election was that Bill Clinton had a record that was sound and defensible and plausible and acceptable, as well as a sense of the future. And nothing that Bob Dole could do could break into that record because jobs were being created and inflation was low and interest rates were low, and crime is--coming down, and nothing that they could do could alter the sense that Bill Clinton had a better sense of the future. And as long as the President stayed on that ground--his record and his future--and the future of the country, there's not much that the Republicans could do about it. So the people really bought that properly but then we had these other issues related to the House and Senate.

ELIZABETH FARNSWORTH: And do you think they were hedging their bets essentially--they were--they wanted to make sure that there were checks on both sides--they were--

SEC. CISNEROS: I suspect that that was a big part of it. I always felt--and I was talking to House members and Senators as I was out around the country the last couple of weeks--and many of them were--Democrats--were really worried that--that message that the Republicans hit on about two weeks ago--that suggested that although the President probably was going to be re-elected, the American people ought to hedge their bets with respect to the House and the Senate--I suspect it was a message that actually had some effect, and, and worked to the Republicans' advantage in the end.

ELIZABETH FARNSWORTH: Well, you heard what, uh--the various leaders of Congress are saying about what's likely to happen. What do you think will happen? Do you think that there will be a cooperative spirit more like the last few months before Congress left this year, or--

SEC. CISNEROS: I certainly hope so.

ELIZABETH FARNSWORTH: --will it be like it was before that?

SEC. CISNEROS: I certainly hope it will be cooperative, and I expect this maybe a naive expectation--but I expect that it will be--and my reason for saying that is first and foremost that this election has kind of had a centralizing effect. The President for the last several years has been working very hard to define the vision that he had identified to the country in 1992, and it's a vision of focusing on jobs, the concerns really right at the heart of Americans and children, families, schools, education, safety in the communities, and that's been a centralizing dynamic, uh, and the Republicans, I think, have been chastened. They have--they came very close to a major disaster this election--and it was the fact that they abandoned some of their wilder extremist sort of notions, and toward the end of the session, built a record for themselves on welfare reform, on the pension portability, insurance portability, and so forth, that they could campaign in the center. So having seen both sides come to the center, the hope is that there is sufficient momentum to govern from the center for both sides. I think the closeness of the House, uh, assures that the blue dog Democrats and, and some of the moderate Republicans probably command the, the central momentum, and my sense is that that's good for the country. The President certainly has reached out in his comments last night. I thought he was very gracious, not only to Sen. Dole but also to the winning House and the Republican leadership, and one other thing I think will be a centralizing influence. I've been very impressed with the role that Sen. Lott has played. You notice that after Sen. Dole left the Senate and Lott became the majority leader. Uh, a lot of things got done because presidential politics was removed from the agenda, and he saw the need to produce. It strikes me that Sen. Lott, by personality--and this is just a personal observation--is a person who if he is the leader instead of Newt Gingrich, which was the case in 1994 and ‘5, if Lott's temperament is the dominant temperament, you heard him a moment ago say the President ought to have a chance to put his initiatives on the table--that can be a very positive thing. So for a lot of reasons I think this could be a productive working relationship.

ELIZABETH FARNSWORTH: And what will be at the top of the President's agenda?

SEC. CISNEROS: Well, the President has said over and over again that his focus will be to do those things with respect to budget and the economy that keep jobs growing, keep inflation low, interest rates low, maybe avoid the recession that otherwise would be typical at some point of the end of this economic expansion cycle. So that'll be very important to focus on jobs and prosperity for folks. I've heard the President say many times in small groups that he believes the single most thing an American President can do for the people in a time of change is to truly empower them with education and training and the access to colleges and universities, good quality starts for children, child care and Head Start, and so I think that will be a major priority for him. And then I think another that we didn't see as much the last term will be the focus on people who have been left behind in the cities and distressed areas, and the impetus for that is going to be that welfare reform is going to start in the next several years taking welfare checks away from people. And the President feels very strongly they need to be replaced with paychecks. But paychecks means corporations and businesses need to be drawn to the creation of jobs, and sometimes the public sector, and so I think you'll see a good deal of emphasis on that on the part of the President.

ELIZABETH FARNSWORTH: Now at the same time as you're celebrating the White House is going through some upheaval as cabinet changes are discussed and made. Um--a few questions about that. Are you planning to leave?

SEC. CISNEROS: Well, I wouldn't call it upheaval because it is normal at the end of an exhausting four-year cycle that folks would have personal plans and personal obligations and so forth. I've made no final personal decision. It's always a balancing between what the President wants and his desires for the cabinet and then what personal obligations people may have. That's something that's not sorted out in my case. But--but I noticed that there are today rumors about individuals and, and I would just say the President will take all of those under advisement over the next several days, and I think that sometime over the next week or so he'll make some definitive statement about the makeup of the cabinet. This has been an unusually collegial group. It's fascinating to have been part of a cabinet that has been very effective. Part of the President's success in this election was the fact that Sec. Christopher has kept us as peace in the world, and Sec. Perry has managed the Defense Department so soundly, and Sec. Rubin has done such a good job in managing the economy, along with others, and you haven't seen the sharp elbows and sort of the competitiveness of egos that has characterized past cabinets--lots of fodder for the news media. You haven't had it out of this group because of the collegiality, and I think that's a characteristic that the President will want to build into the next term as well.

ELIZABETH FARNSWORTH: Well, Mr. Secretary, thank you very much for being with us. Congratulations, again.

SEC. CISNEROS: Thank you, Elizabeth.

JIM LEHRER: The second vision is that of the Republican leadership of the Congress, and Margaret Warner has that.

MARGARET WARNER: And that Republican vision comes from the No. 2 Republican in the Senate, Don Nickles of Oklahoma, the Majority Whip. Welcome, Sen. Nickles.

SEN. DON NICKLES, Majority Whip: Hi, Margaret. Thank you.

MARGARET WARNER: What do you think was the message that voters were sending in terms of what they--how they want the Congress to operate?

SEN. NICKLES: Well, I think they want Congress to do its job. They want us to be responsible. Some of the things the President said resonated, but frankly, some of his things don't really match up with the rhetoric of some of his actions, but we look forward to what the President proposes, but we're still serious about balancing the budget. We're still very serious about offering, uh, some, uh, tax relief for American families. The President talked about that. We plan on working with the President to make sure that it gets done.

MARGARET WARNER: Now, the President said today that he wanted to try to recreate in the next four years the same spirit between himself and the Congress that prevailed in the last few months, as opposed to say 1995. My question to you is: Are the more conservative members of your party in the Senate ready for the kind of--continuing the kind of real compromises that, in fact, they did make in order to get some of this legislation in the last few months?

SEN. NICKLES: Well, we made some compromises, but frankly, a lot of it was the President moving towards us. The President finally signed the welfare reform bill. I'm pleased that he did. He vetoed it twice. He finally signed the third one, but what a lot of people don't know is he also signed a ten-year waiver and exemption for the District of Columbia. We caught him on it, and finally he rescinded that waiver, but it just showed you he was trying to undermine the welfare reform bill the same time he signed it.

MARGARET WARNER: Let me try the question a different way--not looking to the past--and that's my mistake. We just heard Sec. Cisneros say that he thought this election would have a centralizing effect. And speaking of the Republicans, he said he thinks that centrist Democrats and moderate Republicans will command the central momentum.

SEN. NICKLES: Well, I don't know if I'd characterize it like that. I think you will find us very willing to receive the President's proposals and those that we think that are good for America, we will be happy to move forward on them, but we're still very dedicated and committed to balancing the budget. I think you'll see us early next year try to pass, for example, a constitutional amendment to balance the budget. The President doesn't agree with that, but we're still committed to do it, and we're still going to try and do it. And I think, uh, you know, some people say what difference does a vote make? We failed passing the balanced budget amendment in the Senate by one vote. We picked up one or two votes, I think, last night. We have to check everybody and on the Republican side, I think we're in good shape. If we don't lose any Democrats, uh, I think we can pass a constitutional amendment to balance the budget. And so that will be up pretty quick, plus then we still have to put the whole budget package together, uh, and that includes saving Medicare. You know, the President and the Democrats maybe really scored some political points in scaring senior citizens, not totally successfully, but they did scare some senior citizens, but it doesn't change the facts. We have to save Medicare, and it's spending a lot more money than it's taking in, and so he needs to put a proposal on the table that's going to help do that to keep the fund solvent, and he hasn't done that yet.

MARGARET WARNER: So are you saying that on the matter of entitlement reform, particularly Medicare and Medicaid, that you are expecting the President to take the first step?

SEN. NICKLES: Well, he should. You know, he blasted us and frankly, in my opinion, he wasn't responsible--certainly wasn't fiscally responsible, nor do I think their charges were even truthful. You know, when they say they're cutting Medicare and you and I know that it was growing over 7 percent under our proposal, his proposal doesn't have Medicare growing much more than 7 percent, but, uh, you know, they're score political points. But the facts are we have to save it, and you either increase payroll taxes, or you reduce the rate of growth of outlays. I think with a Republican Congress we don't want to increase payroll taxes, and so they're going to have to have--we're going to have to work together. It's going to take Republicans and Democrats working together to make it happen, but we're going to have to pass Medicare reforms to have it grow at about 7 percent per year to keep it solvent for some period of time.

MARGARET WARNER: Okay.

SEN. NICKLES: And we have to look at those--those problems, and to ignore ‘em for political purposes, uh, I think would be very irresponsible.

MARGARET WARNER: All right. You mentioned that the President had managed to score political points on Medicare during the--during the campaign. The reason your savings--or he would argue the reason your savings in Medicare were higher than the Republicans was that you wanted to give a very large or larger tax cut than he did, and that's my question. Where are you now? Don't--if you would look ahead, where are you now in the kind of tax cuts you all will be pushing? Are you going to go for across-the-board tax cuts such as Sen. Dole wanted, or are you going to be content with much smaller, targeted tax cuts of the kind the President was talking about?

SEN. NICKLES: First, let me just mention that the demagoguery on, hey, they want to cut Medicare so they can pay for tax cuts is totally false, and they know it. We had a provision in our Medicare provision--proposal that said all the savings stayed in the Medicare trust fund, all the Medicare savings. It was my proposal, and it passed. It was part of our package, and we wanted to do that because we know Medicare was having financial problems.

MARGARET WARNER: But what about in the year to come?

SEN. NICKLES: Well, in the year to come, the President needs to put his proposal up. Now as far as the size of the tax cut, we haven't made the final decision on that, but the President campaigned for giving American families tax cuts--tax credit for children. What he doesn't say is his--his children tax cut stops at age 12--ours stopped at age 18. I still like age 18. We're going to try and pass it hopefully with the larger age so that it benefits more kids. Um, his proposal stops at a much lower income level. Some of us like to have it apply really to more taxpayers, so we'll have to, uh, debate that, and we also want to have a capital gains reduction. We want to make some changes that would help the economy. He has very targeted tax cuts that are very limited and also what he didn't tell a lot of people, it's his tax cuts--he has an equal amount of tax increases during those years, plus he has tax increases in the last year. The President's proposal on budget has a $107 billion deficit this year, and then in five years, it only goes to $87 billion--almost no deficit reduction--and then he has automatic tax increases the last year. That's not acceptable to us, and we're not going to have automatic tax increases in the sixth year to come up with a balanced budget. We should be reducing the deficit every year and provide some tax relief at the same time.

MARGARET WARNER: Okay. Let's turn to another issue--campaign finance reform. Before I think you got--um--in your place--uh--we ran a little clip from Chris Dodd, Sen. Dodd, saying that he though the two parties should agree now at least to (a) ban all soft money contributions to parties and (b) ban all--agree to ban all contributions from non-citizens. Is that something Republicans in the Senate could endorse?

SEN. NICKLES: We might be able to do that, but we also have to look at one other big source of, I think, really almost corruption in the system, and that is a lot of people--millions of Americans--are finding themselves coerced or compelled to contribute to political campaigns and organizations they don't agree with. And that's organized labor. They're compelling members to contribute to campaigns, and many of them don't want to. And so a lot of us feel like a very essential part of campaign reform is that we need to make sure that no American is compelled to contribute to--to political organizations or individuals if they don't want to.

MARGARET WARNER: Are you--

SEN. NICKLES: Everybody should have the freedom to give or not to give. No one should be compelled.

MARGARET WARNER: All right. And are you saying Republicans would be unwilling to make other changes unless they got that?

SEN. NICKLES: Well, I think that's a fundamental--you know, when you look at organized labor is putting in hundreds of millions of dollars in these campaigns, we need to eliminate a lot of the San Francisco. We certainly need to eliminate a lot of the foreign money--if not at all of it. They have no business, and frankly, this administration I think is--is guilty of some real serious corruption with international money, primarily Indonesia and other places, coming into their campaign that we need to review, we need to find out what did happen. It looked like they laundered money. They had Gardner contributing a bunch of money. This is wrong. That needs to be stopped, but that's already illegal. I think they've already broken the law. You need at least to enforce--

MARGARET WARNER: All right.

SEN. NICKLES: --the law as it's written today.

MARGARET WARNER: Let's look a t that final issue very briefly in terms of investigations by the Republican Congress of this administration on all kinds of issues. Today, Sen. D'Amato said he thought at this point it was time for Congress to forget about further investigations of the President. He said, it seems to me we should leave that in the hands of a special prosecutor. Do you agree with that, or do you see these investigations as a continuing priority for, uh, Senate Republicans?

SEN. NICKLES: Well, Margaret, I think the Senate needs and the Congress needs to do its business, and that is passing a budget, uh, saving Medicare, passing some other legislation like highway reauthorization, superfund reauthorization, we need to do all of our business. But likewise, we still have a responsibility to make sure that the laws are carried out. Now, Kenneth Starr has his job, he should compete that job, and I hope that the White House is not foolish enough to start throwing a bunch of pardons around because if they do that, I think there'll be some real serious repercussions. But Kenneth Starr needs to do his work, but likewise, Congress has a real responsibility. Some of the election law violations that have, have allegations been made, we need to investigate that, and some people have made allegations against Republicans. We need to investigate both sides. We don't want to find out that you've had individuals inside the Department of Commerce raising millions of dollars illegally from, from foreign persons--

MARGARET WARNER: All right.

SEN. NICKLES: --and others. We need to--we need to investigate that.

MARGARET WARNER: Thanks, Sen. Nickles. We have to leave it there, but thanks very much.

SEN. NICKLES: Thank you.

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