As deputy chief of staff from 1997, he coordinated the White House's responses to Kenneth Starr's Whitewater probe. He became chief of staff in November 1998. Interview conducted September, 2000 by Chris Bury The president began the second inauguration by quoting from the Book of Isaiah and talked about being a repairer of the breach. Did you have any conversations with Bill Clinton about that and about what he was trying to accomplish with that kind of language? That was actually his theme for the first few weeks of the second term. I think that in two ways he was trying to move the country forward. As you know, the period especially in late 1995 and then into 1996 was a period of great partisanship in the country, with the government shutdown, et cetera. And I think he wanted to move the country out of that period and into an era in which we could work together between parties to get something done for the country. I think that the 1997 balanced budget agreement, which contained so many of the president's initiatives, was part of that. More fundamentally, I think he was also talking about the great challenge of bringing people of different races, people of different sexual orientations, together all around one table, and to build one America, which as he noted, was the country's strength and, not its weakness, especially in this globalized world. And I think he wanted to make much of his second term oriented towards that, both domestically and around the world. At the White House, did you also have to deal with a breach within your own party? I mean, the president was elected in '96 on this triangulation strategy, and Dick Morris had been, until the convention, anyway, sort of the apex of his power. And when you took office there were still a lot of hard feelings among Democrats on the Hill that essentially they had been sacrificed for the president's reelection effort. Mercifully, I missed most of the Morris era, having been at the White House earlier and then left and came back. I think that we ended up trying to work at the center to move the party towards the president's vision, to work with the leadership on the Democratic side. That was one of my principal responsibilities, to go up there and reach out to Democrats of all stripes. Were relations strained at that moment? I think that there were people in the party who felt that the language of the so-called triangulation had set them outside. But in the end, I like to say we're all New Democrats now, because I think the president really was able to forge a bond with Democrats across the depth and breadth of the party. And I think that you saw it in 1998 where, for the first time since 1822, the Democrats -- the party with the president in his sixth year in power -- actually picked up seats in the Congress. The first sort of mini-scandal that you had to deal with as chief of staff was the fundraising allegations that came up in '97 with the Lincoln Bedroom sleepovers and so on. What was your thinking about how you would control the damage from that? Because you knew it was going to be a damaging story. Again, we tried to get as much of that information out as early as possible to deal with the allegations as they arose. As you know, the DNC turned back some of the money that was that was questionable. But I think our strategy from the get-go was to try to just get the information out, put it out in the public, let the public judge. The reality is that both parties have trouble with the massive amounts of funds that are raised to run campaigns nowadays, and I think the president's proud of the fact that, at least at this point, we have a unanimous caucus in both the House and the Senate in favor of campaign finance reform. And I think we've brought that along. But, ultimately, something needs to be done about this system, and... We're not going to really get into a debate over campaign finance reform, but when you were dealing with that issue in 1997, was your defense essentially one, well, everybody does it, the Republicans do it, too? I mean, you put out who had stayed at the Bush White House and so on. You know that hypocrisy is an art form in this city, and I don't think we wanted to let our people, who we thought were using this largely just for partisan political purposes, get away with suggesting that the president had done something that people in their party hadn't. Right now we're talking about the fact that Dick Cheney hosted fundraisers at the Pentagon during the Bush administration in the context of this campaign. So I think that there was an element of that, but I think most importantly, we wanted to get the facts out, get the information out. If mistakes were made, we wanted to correct them and move on. We didn't think that the president had done anything wrong or the vice president had done anything wrong or senior White House people had done anything wrong. And as it turned out, I think that's proven to be the case. Looking back at 1997, you were suggesting that your sort of signature accomplishment of that year was the balanced budget. What do you recall about that event? In 1996 he had embraced the notion and the vision of the balanced budget, but I think he really wanted to do it the right way. And I think that there were a couple of elements that were really critical from his perspective, and I remember Erskine and I briefing him. Erskine Bowles, my predecessor, who had led the negotiations, with the Republican leadership, especially Newt Gingrich, at that time. But there were a couple of things that were really critical to the president, and one was this child health insurance program which is part of it. And the other was the expansion of college aid; that was a centerpiece for us as in trying to balance the budget but do it the right way. I think that the Republicans had agreed pretty much to the programs that dealt with higher education that we were pushing, but they were very resistant on the other point, and just time after time the president sending us back to say this is critical; this is the element that's got to be the centerpiece of this. When finally an agreement was reached, I remember we were going down to the Senate retreat, which I think was over in Maryland, and it was a good day because we got something that was important to the country, pursuing the path of fiscal discipline but doing it in the right way. And we finally go that crown jewel that he was after, and he was very proud of that. Was part of the pride for the White House that you were able to put back into the budget some of the things which had been taken out for welfare reform which had been so heavily criticized, even among some leading Democrats and people inside the... Yeah, that was something when the president signed that bill in 1996. I think he said that he made a commitment that we needed to go back and fix the excesses that were in the bill, especially dealing with people who were legal immigrants in this country. And we were able to repair some of that. We've kept working at that over the course of the years, but it's something that, if you know Bill Clinton, he keeps that kind of list in his head. A scorecard? Things he's promised, things he's said he'd try to work on, things he'd try to get done, and he never loses sight of that; that was one of the things. He thought that, on balance, the welfare reform bill was a good bill and he was going to sign it. That the bill both rewarded work, and encouraged work, And it took care of the children of the people who were moving from welfare to work, but that it was unfair especially to legal immigrants and he wanted to go back and fix that part of it; that was a critical priority of his and one that we have continued to work on. Coming up into early '98, you knew a few days before the Lewinsky story broke that something was going on because Drudge had been out, Newsweek was working on it and so on. Did you talk to the president about it at that time? I think the first time I talked to the president about it was after the Post broke the story, which, my recollection of it, happened on a Wednesday. It was about a week before the State of the Union address and a couple of days after the time you are referencing. When the story broke in the Post, did you ask the president if it was true? Yes. I was there with Erskine Bowles, the chief of staff, and Sylvia Matthews. And the president said to us that, well I can't remember precisely his words, although they've probably been written down many times in many books, but that the gist of the story wasn't true and we needed to move on and deal with it. You did deal with it, and you had to come up with a strategy. Was this different from any other kind of crisis you had dealt with in your experience? It was more intense. Both at the beginning, then obviously there was a kind of lull in it, and then through the period starting with the grand jury testimony and leading up to impeachment, and then finally the Senate trial. It was certainly more intense. And it was also different in the sense in that it was so personal with the president. The legal team, the White House counsel and his private lawyers handled most of that matter dealing with the independent counsel and ultimately dealing on the Hill. What we needed to do was to try to keep our focus, but obviously there was a feeding frenzy at the beginning in this town. You probably have a better sense of the count of stories and issues that were raised and counter-raised, some of which turned out not to be true. From a press perspective, we were constantly battling with the fact that it was difficult to talk about anything else or that Washington's attention was totally focused on the Lewinsky matter in early 1998 and then, of course, into the fall. How do you run a White House when the capital is consumed with a particular scandal? I think that one of the reasons that the American public stuck with the president was that he and we were able to keep our focus on the people's business. He was able to both keep working on the issues that were important to the public. During that year, for example, we did a trip to China, which proved to be an enormously important trip. It laid the foundation for establishing a different relationship with China that ultimately led to the vote we just had recently on permanent normal trade relations with China. If my memory serves me, the Good Friday Accords occurred during that spring, so we were also focused on the peace process in Northern Ireland. We were still trying to get our budget priorities through the Congress, which at the end of the day we did a pretty good job on. The people in the White House who weren't primarily charged with working on [the Lewinsky case] were, in fact, charged with trying to do the people's business. And there was a certain camaraderie that developed, I think people stayed, people worked hard, and we developed a kind of tough hide and a pretty good sense of humor, and... You were in the trenches together. ...And we were in the trenches together. And people felt like we were still getting things done. We were still on the right side from the public's perspective. And my sense is that the public kind of sensed that and respected it.