When she felt that the president, for whatever reason, was not being well served, she tried to fill that vacuum. She would try to then get involved with the staff, she would try to make sure that things were happening. . . .

So when I became chief of staff, I thought it was very important to brief her weekly as to what was going on, personnel-wise, and some of the issues that were being presented to the president. I did that on a regular basis for about six months, and interestingly enough, after that, I think largely because she trusted my relationship with the president, and that things were coming together and things were working better, that suddenly, for whatever reason, we didn't do it. . . . I would stay in touch with her. I'd continue to talk with her. If she had any questions, she'd call me. But it was interesting that after a period, when she felt that the president was comfortable with the relationship that we had with each other, she felt she could do other things.

Was foreign policy, to some extent in this administration, shunted aside? . . . Was the president not terribly interested in it?

Well, you have to understand that "It's the economy, stupid," was more than just a campaign statement. It reflected what the president wanted to focus on -- not only economic issues -- but domestic issues. He really cared about domestic issues. He was involved with domestic issues. As head of the Governors' Conference, he'd worked on education issues. That was where his energy and his compassion came from.

Foreign policy was not something he had done an awful lot with, and so foreign policy became almost a learning process for the president. It was a way to make sure we are doing the right things, but keeping it in place so that, in the end, it wouldn't blow up what he was trying to do domestically for this country. I think that, after a while, this president began to learn what foreign policy was all about. And he became much more effective in dealing with foreign policy issues as a result, but it took a while. In the interim, he relied a great deal on what the vice president said. He relied a great deal on the advisers that he had dealing with foreign policy. . . . I don't know that he ever properly defined what the role of the United States is in this post-Cold War era, where are our national interests, when should we intervene, when shouldn't we intervene, when should we use power, when shouldn't we use power? There's been no sense that that's ever come together. Yet, at the same time, even though it's been oftentimes responding to a crisis out there, you have to say that the president's done a pretty good job in responding to those crises. If peace is the determinative of whether or not your foreign policy has been successful, we have peace.

In that summer, when you're putting together the bill, was there a turning point? Was there some key moment that stands out in your mind? Or is there some particular story that you recall about where this administration is headed?

In putting together the elements of the economic plan, an awful lot of pieces were involved. And one of the things that the vice president was pushing for was to do some kind of fuel tax, some kind of tax on energy.

The BTU tax?

The BTU tax was obviously the one that everyone then focused on. There are a lot of different ways you can approach it. But he felt that the BTU tax was the best way to approach it, because it related to the use of energy and tried to reduce the amount of energy that people used.

There was a lot of debate about that, and what the politics of that was going to be like. I can remember Lloyd Bentsen, an old Texan, being very nervous about the BTU tax in terms of what it would impact. But at the same time, he also felt that when you're looking at the pieces, you need to try to reach a level of deficit reduction that will put you on a path towards balance; there are some big pieces you need. And the BTU was one of those pieces.

So we went through a long debate on that and looked at different versions of the BTU tax. Treasury was nervous about it. The vice president kept pushing for it. I think the president was clearly nervous about whether or not to put it in or not, but ultimately decided, with the vice president, that it ought to be a part of it.

So we proceed. We were pushing the House of Representatives to adopt this budget with the BTU tax. The votes that we're grabbing at that point are basically saying to us -- and these are some of the conservative votes -- "The last thing I want to vote for is that BTU tax. But if I vote for it, you damn well better stick with it in the Senate. Don't you dare sell out on that issue on the Senate side, because then you're going to screw us."

So we said, "No. No. If we're putting you to the wall, we're clearly going to fight this."

So we were able to do it. I think we passed it by a few votes. It goes over to the Senate. And it isn't very long before we find out that we just don't have the Democrats to support a BTU tax on the Senate side. And we're working just with Democrats. The Republicans have taken a walk on the issue a long time ago. So suddenly we're dealing with Democrats and they are saying, "We are not going to support a BTU tax." Before you know it, the president says, "I've got to take it out." And the vice president was angry about it, because he at least wanted to fight it until the end, but then agreed. And eventually, obviously, we took the BTU tax out. But the anger from that on the House was something that hung around for a long time.

InAugust of 1993, the stimulus bill was already lost. It was filibustered. You have a really critical vote on the rest of the economic budget. What did the president say to you?

We knew this was going to be the toughest vote of all. When you're voting, the budget process is broken into two pieces. One is that you vote on the budget, which is a set of targets. That's relatively easy to do because it's not specific legislation. Besides that, the president doesn't sign it. So we got the budget vote through. And now we're dealing with actually changing the law to implement that budget, which means you are actually raising taxes. You are actually making cuts. And, obviously, this is what counts. So we knew we were facing, obviously, a lot tougher vote, and again, without any Republican votes to support us. This had to all be done on the Democratic side. As usual -- and it's always been my experience in the Congress -- you have members who make votes based on the issue itself, about a legitimate concern about is this the right thing to do for the country. I didn't mind dealing with those members. But there are always a small group of members who see it basically as a buy-and-sell operation: "I'm thinking about this, but I really do need this particular project in my district."

I remember dealing with one congressman -- I'd rather not use the name. But I met and they said, "You know, Leon, I was thinking about my vote and God spoke to me." I said, "God spoke to you?" "God spoke to me. And God told me that if I could get this particular project in my district, that I should then vote for your budget." I said, "Well, I guess I have to become God for the moment and see what we can do." We delivered it and we got the vote. That was the House side. So there are a lot of those kinds of discussions. And as budget director, I was sitting in on every one of those things, trying to figure out what we could or could not do for members. But we were able to do that.

On the Senate side, the most interesting problem we had was going right to the last vote. Senator Bob Kerrey from Nebraska kept saying that he knew that it was important to get this done, but he just wasn't sure. He had some concerns about some of the pieces. So we said, "What are your concerns? We'll deal with those. We'll talk it through." We're getting close to the vote. We're trying to locate Kerrey. And somebody tells us that he's in a movie theater in downtown Washington someplace. And we're all going nuts, saying, "What the hell is he doing going to the show when we got this big vote coming up tomorrow?" And so we even went as far as to try to find out, well, what theater is he in? Where is he? Can we try to get him? We had no idea how he was going to vote until the very last moment, when his name was called. We had no idea. And for people that are careful vote counters, that scares the hell out of you, because you have no idea whether, ultimately, you are going to win or lose. You're rolling the dice at that point. And we were rolling the dice with Kerrey.

How did the president react?

The president was he was pacing and trying to figure out what's going to happen here. Everybody thought that when push comes to shove, the Democrats can't walk away from this issue. It's too important. But I think his whole experience in Arkansas was to have a much better sense about where our vote was going, because he had much more control over what the legislature would do. Congress is all these independent chiefdoms up there. It was the first time he had to deal with truly independent forces that could basically say, "Mr. President, to hell with you." He didn't like that.

In 1994, before you take office, there is a sense in Washington among many people that the White House is spiraling out of control in terms of its internal workings. What was it like at the White House? How were meetings held, how was access to the president handled? To what extent did it fail to resemble the White House that Washington veterans were familiar with?

As director of OMB and dealing with budget issues, I dealt directly with the president. And so, from my point of view -- working appropriations bills, working the budget, working the things that had to be done -- I would do a briefing paper, and then immediately go and talk to him and we would work out a strategy on it, and he was very supportive. In terms of my area, I felt that we had a good relationship and it was working well.

What I noticed, though, was that in some of the meetings that I was asked to attend as budget director, the meetings were often unstructured and would go on, literally, for an hour and a half, two hours, more than two hours. There'd be no presentation of "These are the issues, these are the options," kind of approach. Everybody had their say. And there were people from all over the White House that were in these meetings. There were kids sitting in on these meetings, who, frankly, had no business being there. You're dealing with the president of the United States. It's precious time, and he goes into these meetings and it becomes, frankly, almost a BS operation, in terms of everybody expressing different viewpoints. I think he kind of enjoyed the free discussion in those meetings. But it took an awful lot of time away from the president of the United States. So that was problem number one.

Problem number two was that, when you've got a president who's got to make a decision, there's got to be closure. In other words, the president makes a decision, and that's it, and you move on. . . . And there often wasn't a final firm decision, and no closure.

When you say "no closure," you're talking about indecision on the part of the president -- a decision that was never final?

Yes. He would say, "Gosh, did I make the right decision?" And he would start to really think about it and he would ponder it because his nature is not to bring closure. His nature is to constantly assess and reassess and assess again, depending on who's talking to him and depending on the thoughts that are presented. So he would sometimes go into a very torturous process, trying to come to closure on something. And the problem is that if you're trying to move legislation, you're trying to get something to the Hill, or if you're trying to tell a congressman or a senator what has to be done, or what the administration's position is, you could be floundering for awhile, trying to get a clear decision. So that was a problem.

Thirdly, the president was so anxious and so willing to different things, that oftentimes there was no focus as to what he was trying to do on that particular day. There would be a number of events scheduled and suddenly the whole power of the bully pulpit was lost because he was doing then things -- all of which he wanted to do, all of which were important -- but all of which, for some strange reason, were scheduled on the same day.

You have the sense that as a result, the president was not being clear to the American people what it was he was trying to get done. I think that later he understood that. But there were a number of months where the message to the American people was very confused.

In June of 1994, you become chief of staff. How did the president approach you, and what did he tell you it was that he wanted you to do?

Hints began to occur on various levels. . . . Then we were on a trip to Normandy for the fiftieth anniversary of the invasion of Normandy, and I had been asked to go along with the president on Air Force One. I was on Air Force One, and he called me out and he said, "Leon," he said, "if you were chief of staff, what would you do to improve the operation?"

. . . So I mentioned some of the things that I thought needed to be done, just based on my own experience, the kind of basic organization approach to getting things done.

And then it kind of faded away. There was no follow-up to that. Next thing I knew, the vice president approached me in the street, near the White House. "Leon," he said, "I think the president is going to ask you to become his chief of staff." I said to the vice president -- who I was elected with, and we had been friends for a long time -- "Look, I don't want the job. I'm very happy being director of OMB. I really feel that I serve the president better in that position. He needs to have somebody with my experience handling the budget issues."

The next thing I knew, I was being called up to Camp David with the vice president and Tipper. I go up to Camp David and it's the president, the first lady, the vice president and Tipper Gore. And they're all saying, "We need to have you become chief of staff." And I gave the same argument, which is, "Look, I'm much more valuable to you as director of OMB. I've got a good operation. We've passed the budget. You want to make the economic performance of this administration a centerpiece for the future. That's what I can do best."

And the president looked at me and I will never forget these words because it was typical of Bill Clinton. He said, "Leon, let me tell you something. You can be the greatest OMB director in history and nobody will ever remember you if the White House is falling apart." Pretty persuasive. So I said, "All right. I'll do this." And I told them that I wanted to make sure that there were conditions that he was willing to support -- basically, to support me on the decisions, reorganization, that type of thing -- that I would have his support, the first lady's support, and the vice president's support. And I said, "I'll do this. But I'll do it through the next election, and then I want to go home to California at that point." It was the smartest decision I ever made. I don't know if a guardian angel was watching over me at that point but it was the right thing to do.

George Stephanopolous writes in his book that right after you're named chief of staff, George comes in with a copy of Haldeman's book. And he reads a citation about a speech that Nixon gave to his cabinet, telling them the role that Haldeman would play is Lord High Executioner. Do you remember that story at all?

George and I had a relationship that went back to Capitol Hill. . . . I had a lot of respect for him and had worked pretty closely with him. He brought the Haldeman book in and read the quote. The message was, "You're going to have to be tough as hell to be able to handle this."

I said, "Look, my interest is just to make sure that this place is operating well for the president. That's what I'm after." But it was clear in George's message that, to some extent, that knives would be out, and that any time you come in as chief of staff in a staff that's already operating, everybody is pretty nervous about what the hell is going to happen. And yet, I think he thought it was in the interest of the president to be tough as hell to try to get it done.

So were you tough as hell? What did you do to clean up what sounded to you like a pretty loose shop?

The best thing I did was to really try to focus on three problems that I thought needed to be addressed. One was the problem of organization within the White House. There really was no organization chart, which is basic to any a staff operation, or a corporation, or business. You've got to have at least a chart that describes the basic stuff I learned in the army -- here is the boss, here's the second in command, and under them are certain people.

So I had to establish an organization chart that . . . that there was a chain of command in the White House, that it wasn't just a case of anybody wanting to wander in and talk to the president, but that they'd have to go through a chain of command. So that was number one.

Number two was better discipline within the place, because there was a tendency for people just to wander and walk into meetings. You'd suddenly wind up on Air Force One with a lot of people that had no business being on Air Force One going to different events. So we clearly limited that. I said, "I will approve who goes on Air Force One with the president. I will determine who sits in those meetings in the Oval Office, so that we don't have people coming out of the wall sitting there, and those meetings are tight and organized. If there is a briefing to be presented to the president, I want to go over that briefing first, to make sure that it's structured when it's presented to the president."

And then, thirdly, it was focus, because there were so many things happening that it was pretty clear that the president really needed to have clear focus. If there is an event, say, an education event, you don't combine it with an event on crime, or an event on research and development, or an event on something else on the same day. So we set up a scheduling operation with the help of my deputies, to set up a scheduling operation that looked at the next three months. I could not have done it alone. I had a lot of cooperation, obviously, from the president, as well as from my deputies and other members of the staff.

And the other thing that I had to look at was the staff itself. The president kind of said to me, "Look, you've got to just clean house with some of these people." I said, "Whoa. I'm just walking in. Let me get a few months to see what they're like and what they can do." And, frankly, I found that a lot of them were actually pretty good people with a lot of experience and a lot of commitment. But what they didn't have was the structure to work within. They just did not know what the process was like.

And so that helped a great deal. There were some personnel changes that we made as well to try to improve the operation, to bring a little more people of experience into the White House with a so-called "grownup factor," to make sure that we had more people that could basically provide the kind of experience that was needed in those jobs.

In August 1994, Kenneth Starr is appointed independent counsel. What did you tell the president about Starr?

I remember the legislation that continued the Independent Counsel Law. I had been on Capitol Hill when it was first developed and had voted for it.

Congress then enacted the legislation to continue it. And I remember going in and saying that the bill had been passed by the House and the Senate, and that the decision now was with the president and the White House as to whether or not to sign it. The president looked at me and he said, "You think I should sign this?"

"Well, Mr. President," I said, "Clearly there was overwhelming support in the House and the Senate. If you wind up vetoing this, you're going to be overridden by both the House and the Senate." And he said, "I know. I know. But why do I have this feeling I'm making a mistake?" or words to that effect. So we always had some qualms about establishing that kind of power and what it could possibly mean. And he always recollected that during the next few months.

Obviously, when Ken Starr was appointed, he was angry, because he really felt that the independent counsel prior to Ken Starr, Bob Fiske, had really been objective and tried to really seek the truth out. I think, ultimately, he had developed a lot of respect for Fiske. His feeling was that essentially a deal had been made to get rid of Fiske and put Starr in, and that that spelled trouble for him. There was no question in his mind that a political decision had been made. He wasn't sure who was involved, but there was no question in his mind that this was not just the court acting out of a sense of justice. He felt this was basically part of a political effort to go after him.

When James Carville hears about Starr, he is upset, because he shares the president's sentiments on that. At first Carville refrains from politicizing the issue and taking on Starr. But shortly thereafter, he does. There is some debate in the White House about whether Carville should do this. Do you remember where you came down and what your advice was?

I remember very clearly. My view was that you've got an independent counsel that's been appointed, and the last thing you ought to do is take on that counsel in a political way. You're asking for real trouble if you do that politically. But in terms of the view of the country, it will reflect that you really have something to hide if, in fact, you're trying to attack the independent counsel. I shared some of the suspicions, but at the same time I guess my tradition was one of respect for the institutions that are established.

And Ab Mikva, who was White House counsel, and others who knew Ken Starr, kept saying, " I have a lot of respect for him and I think he'll do a good job." . . . So at that point, it was clear that the last thing that the president should do is to attack the independent counsel in a political manner -- that it would be far better to let that person operate and do his job, the same way Fiske had done his job, with the hope that if there's nothing to be found out, ultimately that's what an independent counsel will find.

Yet Carville went out and started attacking Starr. Did you bring this to the president's attention or did you encourage the president to call off the dogs here?

Well, there were those of us who were concerned about that when he was doing that. Clearly, even though Jim Carville was acting out of his own concern for Starr, the relationship between the president and Carville was such that people immediately put their two and two together and figured that the president is clearly behind this. So even though he was speaking on his own, there was no question that the impression was that he was getting signals from the president to do this. And, again, when you're president of the United States, it was my view that the president has to be above that and that he can't just suddenly grovel and look like he's engaging in political warfare with somebody who, frankly, carries his fate in his hands.

In September of 1994, there is a growing problem with Haiti and there are atrocities committed under the Cedras regime. There is a threat of more refugees, and there is a decision made to send former President Carter and Colin Powell. What was the concern within the White House about that pretty risky delegation --"risky" not in terms of who they were, but in terms of what they had to do?

This was a moment when I think I really understood what it meant for the President of the United States to have to make a decision about whether to put our military at risk, and the tremendous burden and responsibility that that represents on one individual. The president had clearly decided early on that if they required military action, he was prepared to take that military action. And working with the chiefs of staff and the Defense Department, a very coordinated effort went into place to deploy the forces that had to be deployed if, in fact, we were going to go in.

The president, to his credit, always felt, "Have I exhausted every possible diplomatic course here to try to see if this can be resolved peacefully?" which I think is the responsibility of the president. Before you take that last step, you better be damn sure that you've tried to exercise and exhaust every possible effort to try to find a peaceful solution. So he viewed this as the last best effort to try to do it. He put former President Carter together with Sam Nunn and Colin Powell. There was interesting politics involved with that, because I think everybody was concerned about whether or not, ultimately, President Carter would bend over backwards to pacify the leaders in the effort to try to find peace, because of his relationship with some of those leaders there. And so there was concern about whether or not he would be tough in those negotiations. So the purpose of having both Nunn and Colin Powell as part of that delegation was to basically make sure that the United States would take a tough position here.

So they went down and the negotiations began. At the beginning, it was clearly the impression they were getting nowhere. We're getting nowhere. And pretty soon it's getting close to the point where a decision has to be made. We had set a time when, in fact, the invasion would take place and we would go in. But you have a time clock that basically goes from the invasion and back to when do you have to deploy the Navy Seals, when do you have to deploy other forces that would prepare the area for the invasion itself.

We were getting very close to those time deadlines. I can remember General Shalikashvili basically saying, "Mr. President, we're within ten minutes of having the Seals go in." At the same time, the phone connection wasn't that good. We're talking with the three. They're saying that there's a willingness for them to resign within a period of time, that they would resign as of a certain date. . . .

So in the Oval Office, the deadline is approaching fast. What's going on?

I'll never forget it, because in the Oval Office is every major player dealing with defense and foreign policy in the administration. It's Secretary of State Warren Christopher; it's Secretary of Defense Bill Perry; it's the Chairman of the Joint Chiefs of Staff; [National Security Advisor] Tony Lake; the Vice President of the United States; and other key players, all in the Oval Office, all around the president, who's sitting at the desk. People are just crowding in around the president, trying to see what ultimately happens here.

Finally the players in the office -- I think it was Colin Powell -- said, "If we're going to take their word for it, we want to get our troops on the ground." The message that was sent to the team was, "We'll accept their resignations, but we've got to be able to put our troops on the ground and make sure we control it." And there were still some in that room who said, "Why don't we go ahead and invade? If we're going to do this, the clearest way to do it is to invade, because if we just put our troops there, who knows what the hell is going to happen."

So there was still a lot of pressure to go ahead. The clock is ticking; the troops are in place; the ships are there; the helicopters are in place; the troops are ready to go. So there is almost a momentum that's building to do this. Everybody is gathered around the president . . . and so the question was now, "So what we do, Mr. President?" And he is sitting at the desk and there's a pause. My first thought was, "What's going on? What's going on in his mind?" And he looked up and he said, "Let's go with the deal. Let's go with what they've got. I think that's the best course to take right now."

And when he did that, the Seals were called off and we had to reorganize the effort, because now it is hopefully going to be a peaceful landing. But it changed the dynamics. Suddenly, instead of a shooting war that would involve a lot of lives, now the question was how do we deploy our force and make sure that they stick to the deal, and make sure that they're out of there? So it suddenly went from being a military problem to being a diplomatic problem as to how we get this done. But I will never forget that moment, because it was the kind of moment that you know a lot of presidents have gone through -- where they've got to make this fundamental decision: "Do I engage, do I go to war, do I put these boys at risk, or do I try to find peace?" and it's never an easy decision.