JIM LEHRER: The White House Chief of Staff is returning to California, the state he represented in Congress for 16 years. He left Capitol Hill to become President Clinton's first director of the Office of Management & Budget. Within 18 months he was named chief of staff. Margaret (Warner) talked to him in his office earlier today before the Gingrich hearing began.
MARGARET WARNER: Well, thanks for being with us, Mr. Panetta.
LEON PANETTA, White House Chief of Staff: Nice to be with you.
MARGARET WARNER: Let's talk about what's happening on the Hill first. Are we just seeing a partisan meltdown, breakdown in Congress?
LEON PANETTA: It's unfortunate that the Congress has to start off on this foot because I think when you have this kind of issue before the Congress that involves an ethics issue, and particularly where it involves the Speaker, and it starts to break down into partisan attacks and counter attacks, that what happens is a lot of feelings get bruised in the process. And it's going to take a while for those feelings to heal no matter what happens. So instead of I think the real hope that we could have a bipartisan coalition come together quickly to work with the President and to try to move his agenda forward, I'm afraid it's going to--it's going to take a few months to try to get past the divisiveness of this whole ethics issue.
MARGARET WARNER: Why do you think there is so much acrimony and bitterness?
LEON PANETTA: You know, I think--I think part of the problem is that in the time that I've been in Washington politics has gotten meaner, and it's become more involved in personal attacks, more involved in just attack politics overall, where instead of kind of spending time talking about the broader issues, on education, welfare reform, health care, and what have you, trying to work for solutions, it's become much, much more of a political temptation in order to grab that 30-second spot on the evening news to engage in this kind of attack politics.
And I think we pay a price for that. But members also think that when they're doing this, when they're using this, one party against the other, when you're basically pinning an individual down on some kind of personality or ethics issue, that you're making points with the American public. I honestly think they're losing points with the American public, but I think there's still a mentality that if they can score the first punch, that somehow that benefits them. And I think that's what you're still seeing play out.
MARGARET WARNER: However this ethics--these charges against Gingrich play out in the end, what effect do you think this is going to have on his ability to lead the Republicans and lead them into compromising with the White House?
LEON PANETTA: It is--it's difficult to really determine where this is going to lead us. And the reason I say that, you almost have to see how this plays out. First of all, you have to see what happens to him, you know, what ultimately the Congress does decide with regards to the Speaker, but assuming that the Speaker remains, then the question is, does he feel strong enough as a result of that, that he can truly engage with the President and with Democrats to try to find compromises on key issues, and move that forward, or has he made so many commitments to his own members in order to save his position and is so indebted to them that he finds it difficult to not move away from gridlock?
That is really a question mark right now. I don't know because none of us know how many commitments he's had to make as a result of this. I think one thing is clear; that this will continue to remain a cloud over him and over this session. And the real key is whether or not he has the courage to move beyond it. And I don't know the answer to that.
MARGARET WARNER: All right. Now, let's turn around and look at the President too who has various ethics and investigations hanging over him, whether it's Paula Jones, Whitewater, this money-raising business. What effect do all those have on his ability to lead?
LEON PANETTA: The best way for the President to deal with the next two years is to carry forward the lesson that he learned in the last two years. And the lesson of the last two years is basically the following: No. 1, don't get trapped by the Congress; don't become a prime minister who has to spend every day worried about what happens in the Congress. Take your message to the American people. Use the bully pulpit. Use executive actions. And if you can work with Congress to get something done, fine, but don't get trapped by the Congress in that process. Take your message to the American people because ultimately that's the most effective way to get anything done.
MARGARET WARNER: Now one of this group of problems did happen on your watch, and that is the DNC, Democratic National Committee fund-raising, and let me just ask you whether you think, in retrospect, you all put too much pressure on the DNC to raise these millions and millions for the presidential year and that there was also maybe something a little unseemly about the way you involved the President in all these special things for the donors or the night in the Lincoln Bedroom or the coffees here at the White House. I mean, in retrospect, do you think the White House was at fault here?
LEON PANETTA: Well, obviously, I think the President and all of us were disappointed at what happened with regards to how the DNC checked the contributions and the fact that they had a check system in place and then ignored it or put it aside, because that's not what we did with the re-elect; that's not what we did with regards to the other campaign finance that involved Democrats. And frankly, we just assumed that the DNC was, in fact, implementing that same kind of check system, and that wasn't happening, so that's unfortunate, and I guess all of us accept some responsibility for assuming that that's what they were doing. I think the fundamental problem is that there really is just too much money involved in politics these days and too much responsibility to raise that money in order to, in fact, compete party to party, candidate to candidate.
The one lesson that comes out of all of this is the need for campaign reform. I think unless campaign reform is enacted by this Congress that sets limits, that tries to provide some reforms in this area, I think you're going to see the same kind of--the same kind of over-emphasis on fund-raising that we've seen before. And it's not just Democrats. It's not just the President. It's Republicans and Democrats together. It's candidate after candidate. It's got to stop.
MARGARET WARNER: So you're saying, though, that within the present system you don't have any regrets about the way you handled raising all this money.
LEON PANETTA: Obviously, with regards to what happened at the DNC, all of us, obviously, would have preferred that they had their check system in place. As to whether or not there was a need to raise funds in order to compete with Republicans who were raising significant amounts of money, don't forget, in the end, they raised almost twice as much as what the Democrats raised, using very much the same tactics, fund-raising dinners, fund-raising luncheons, fund-raising breakfasts, meetings here, meetings there. I mean, that's the way you raise money in our system. I mean, to that extent, no, we had to basically compete in order to raise those funds, but do we--do we feel it's the right thing that we ought to be doing? No. I think there's too much time, too much emphasis on fund-raising, and it's got to stop.
MARGARET WARNER: Coming in here four years ago and leaving today, how is the President, if at all, a different man or different in his role as President from the close range that you see him?
LEON PANETTA: Well, you know, the President came in the first two years a governor of a small state. He had a large agenda he wanted to put in place. I think he had very high hopes. I think he did not know Washington that well when he first came here and took a lot for granted in terms of how both the Congress and the country would respond to an aggressive agenda. And what happened in the last two years I think were several important things. First of all, he did learn the lesson that his ability to use the bully pulpit and go to the American people was extremely important. No. 2, that if you want to get anything done, you've got to get the message to the American people about how it affects their families. He did a lot in his first two years, but he never got the message across as to how it related to their families, and they never quite understood what it meant for them.
He captured that in the second two years. Thirdly, he's become much more disciplined and focused in terms of his own time and spending, spending the time to think about what he wants to do, doing phone and office time but more importantly focusing on a particular message, rather than running to several different events, and lastly, implementing the kind of discipline we put in place. I think all those things indicate a change for the better as far as the President.
MARGARET WARNER: And as you leave government service after what, nearly 30 years, are you still as enthusiastic about government service as you were when you came in?
LEON PANETTA: Very much. I think--I think there is no better way to, in fact, serve the American people than to be in positions like chief of staff or elected positions in our government where, in fact, you can affect the daily lives of people in this country. There is no better way to try to improve people's lives than in these positions, despite all the problems, despite all the temptation, despite all of the challenges that you face day in and day out. The greatest satisfaction you can have is when you help people.
MARGARET WARNER: And what are your plans?
LEON PANETTA: I want to go back to California, my home, back to Carmel Valley in the Monterey area, which I was born in Monterey, and represented that are in the Congress, so that's home. I want to go back. I want to frankly take some time to decompress. These jobs run 24 hours a day, and take some time, look at other opportunities, but most importantly be able to be home with my family.
MARGARET WARNER: And are you exploring the prospect of running for governor of California next year?
LEON PANETTA: When I go home, I think obviously one of the things I'm going to look at is that possibility and talk with friends and talk with supporters about that possibility, but I've made no decision, and frankly I shouldn't make any decision until I get a chance to go back home.
MARGARET WARNER: There was a report that you and Diane Feinstein, the Democratic--a Democratic Senator from California, met and essentially made a deal that you would not run against each other for governor, is that true?
LEON PANETTA: No, we haven't made any deals, but we're good friends, and we talk to each other, and I think we'll continue to talk to each other about, you know, the future of the state of California. I think both of us are very concerned about what's happened with the state over the last few years, and both of us want to make sure that whoever runs for that position is in--has a good chance to win and to change the direction of the state.
MARGARET WARNER: And if you don't do that, are you going to stay in public service?
LEON PANETTA: I will--you can't spend 30 years of life I public service, which is about what I've spent, and not continue to stay involved. I will continue to stay involved in some capacity on issues that affect people.
MARGARET WARNER: Well, thanks, Mr. Panetta, and good luck to you.
LEON PANETTA: Thank you very much.