Rahm Emanuel

He was Obama's chief of staff from 2009 to 2010 before he left the White House to run for Chicago mayor. Here, Emanuel discusses why the president ran into trouble in his attempts to create "a post-partisan environment and more productive Washington." This is the edited transcript of an interview conducted by producer Jim Gilmore on July 26, 2012. (31:29)

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   So, Mayor, let's start out with day one. You and the new president walk into the White House. What are you facing? What did you guys inherit? How surprising it is?

   I mean, you could pull up a newspaper, but you have the industrial base of America two weeks away from bankruptcy -- not just bankruptcy, just closing up.

   And put that in context: The last time we ever faced as a country something in the auto industry was Chrysler. This was not a company, but an entire industry. That was both suppliers or auto manufacturers. That's one. …

   The financial sector was entirely frozen. No home loans, no car loans, no student loans, no small business loans, nothing. No bank-to-bank loans, nothing. And again, by context, the last real financial problem was a sector, the savings and loan industry, not the entire financial industry, including insurance.

   We were losing 750,000 jobs a month. The economy was contracting, what we now know, by quarter, at about a rate of about 8 percent.

   And Afghanistan, overseas was, I think, rudderless as a policy, because we had been drawing our attention toward Iraq. And America's reputation around the world had been sullied both because of our engagement overseas and how we engaged overseas.

   That's what you walked into, not just in the office, but the condition of the country. And I think that gives you, I mean, a sense. There was nothing you could point to, where you could say the arrow was pointed in the right direction or things were on solid footing.

   So the economy was in a freefall, and two major sectors of job, or parts of the economy, were on their own close to collapse and imploding, let alone all our obligations around the world.

   So a daunting task.

   That's one adjective. I can think of a couple, but that's one. It could take your breath away.

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   Others on this topic:

   Bipartisan Battles

   Republicans 'rejected' the administration's attempts at bipartisanship

   Bipartisanship was the thing that the president had sold. How did you all talk about planning to do it, to actually deal with it? How was the debate?

   Part of it was, getting a post-partisanship, was to get Washington moving. I mean, it was an end result. It wasn't just what kind of meetings you were going to have. It was to get Washington moving.

   And the first two to three bills -- look, we passed Lilly Ledbetter reform as it relates to equal pay, bipartisan. We passed kids' health care. George Bush had vetoed it three times, insuring 10 million children health care, bipartisan passed. Even the stimulus bill, although people remember it from a partisan, the key votes were the three Republicans in the Senate. A lot of people were upset that we were allowing that, but to get it done -- so it was bipartisan.

   Now that's one. But it wasn't to -- yes, he made a pledge for a post-partisan environment and more productive Washington. The auto industry you had to do administratively, and today it is creating jobs rather than facing bankruptcy, even with partisan attacks and against people who recommended bankruptcy. Many voices in the Republican Party and the financial establishment, bankruptcy was better. I think for the president, that was not the option. …

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   But take us into stimulus. You talked about stimulus. There's that famous story of early on he goes up to Capitol Hill. He was going to sit down with the Republican caucus, and he comes out of that and I guess pretty much -- I mean, one of the stories out there is that [Speaker of the House John] Boehner [R-Ohio] basically told his people, "Hey, I'm not voting for this thing, and I don't expect anyone else to."

   Your memory's different than mine.

   All right, tell me the truth. Tell me what your memory is.

   The president, before he showed up, [House Majority Leader] Eric Cantor [R-Va.] sent out an email, said, "I'm voting against it." Eric Cantor's emails were against this. Don't extend an invitation. Before he even made a pitch, there was an attempt to get bipartisanship. And a few days earlier, he had met with them, with the leadership, and included a number of their ideas in the tax provision, which is a third of the entire cost.

   But you go to the stimulus -- I want you to understand, on any given day, you were dealing with restructuring the auto industry, meeting about the financial sector, meeting on the economy, and drafting a plan for withdrawal from Iraq. And it's not like they were siloed. We were doing all of that on the very same day, all of those fronts.

   So it's not like, let's just do the stimulus. No, because in about 20 minutes when the meeting on the stimulus ends, we go into the auto industry collapse. And after that we go into the financial industry collapse. And the national security team would like to meet with you about the withdrawal from Iraq. Remember, the plan for Iraq is announced within the first four months of the presidency.

   So all of that is happening simultaneously.

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   Others on this topic:

   Bipartisan Battles

   But as far as the stimulus and what it says about the relationships with Congress and where they were going from there on in, what did you take away from the way they dealt with the request in that meeting with him?

   Well, here's the thing. I draw my conclusion, if I can -- let me go back two months before the election. President Bush asked the Democratic leadership in the House in September of '08: "The country's coming to a financial collapse. I want you to meet with [Federal Reserve Chair Ben] Bernanke, my secretary of the treasury, and my head of the Securities Exchange Commission." This is two months before a presidential election.

   Now, if you wanted to be political -- usually starting September forward is a pretty political environment -- you would say, "Mr. President, there's a financial problem; it's your problem." Democrats didn't do that. I remember, I was up till 2:00 in the morning with Hank Paulson in an anteroom working through some very tough things while an election was happening because it was in the interest of the country.

   And when the first bill was sent up, the Republicans walked away from President Bush, even while the country was at risk.

   Now, four weeks after the election, which is now a number of months later, four weeks into the presidency, so you don't have really a lot of partisanship to -- there's not a lot of hard feelings; you're not four years into it, you're not four months. It's four weeks. No. Before he shows up for a meeting. And for the three Republicans that are sitting and trying to work out an agreement on a stimulus bill, they're viciously attacked on the Senate floor.

   So when you ask me, creating the post-partisanship, I know the first two bills were passed bipartisan, by the desire of the White House, because we made some changes. And we tried on the stimulus bill to get bipartisanship, and it was rejected within the first four weeks. And it's in direct contrast to what Democrats on the Hill did with President Bush with two months left on his presidency with a national election to go. …

   So what was the view? What did Obama take from that? He had sold the idea that he was able to sit down and talk with anyone.

   But I mean, his view was we're going to continue to work to try to create a place where we can find common ground. And we did that. Kids' health care, not only earlier, but kids' tobacco legislation. Leadership would vote against it, but we would work with a number of individuals who were willing to do that.

   When we did the Consumer Bill of Rights, that was also a place where we broke or created a rift between the leadership who was absolute no and the membership that wanted to look for chances. But it became a place where, with primaries and the Republican primary, very difficult for a Republican willing to say that "I'm willing to cooperate." And there's a lot of Republicans who lost primaries, who decided to take a chance on bipartisanship.

   Why was that?

   You can't be serious about that question.

   You're a man who knows Congress better than anyone.

   Look, there's a bigger change. It's not about Washington. Washington is a mirror reflection sometimes of what goes on in the country. There has been a dramatic shift in the Republican Party in the center of gravity, OK? The most dramatic way of saying it is I don't think Ronald Reagan would be nominated by the Republican Party today. It's moved that far. If you look at his record as governor, there's no way today that he'd ever become the nominee of their party. That's one.

   Two, for the few Republicans that decided to try to work together, they've all been primaried. Some of them lost. Some of them, like [Sen.] Olympia Snowe [R-Maine], retired.

   Now, there are key parts of legislation that reflect Republican philosophy and ideology. But it became so bad that even when you did things that they were willing to do in the past, they couldn't be for it without huge political consequences to their own individual futures.

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   Others on this topic:

   Obamacare

   Why he advocated financial reform before health care

   So let's talk a little bit about health care. We're going to jump around a little bit here or I won't get as much coverage as we need from you.

   Or you won't get the answers you want. (Laughs.)

   The answers you will give. The pivot to health care. What were you and the economic team warning about as the pivot is made?

   Well, look, I mean, this is written, so I'm not saying anything. The president had, post the stimulus bill, post-auto and post-first part of financial, which was stress tests and other aspects administratively, the president had three -- and he had other things, you know, kids' tobacco, which was stuff. He had three major initiatives: financial reform, so the regulatory architecture was up to speed with the market, which was not true post-Glass-Steagall; two, health care reform; three, energy/climate change.

   Now, first of all, on all three he made dramatic progress. Second is, it was my view -- and I advocated this, it's been written, so again, I tried to be careful about, one, we should do financial reform now. The problem is fresh. It's more likely to have bipartisanship. For a host of reasons. …

   On the health care, my argument was not -- I don't know what [Secretary of the Treasury] Tim [Geithner] and [Director of the National Economic Council] Larry [Summers] gave their advice -- my advice was, I had been through this. If you're going to do this, you should go with it eyes open, both on historical standards -- historical precedent, rather -- as well as fully conscious of how this plays out and what it will take, which is what he wanted his chief of staff to do, which is the chief of staff has got to advise both the politics, the policy and the kind of public communications, the press. So you've got to help the president weigh all those pieces.

   So how did you define the risks as what they were?

   Time. It's been 80 years. (Laughs.) Nobody came out of this successful. You're going to dedicate a huge amount of time you can't make up. The likelihood of success is -- 80 years will tell you.

   So I said, if you're going to do this -- and it was something he ran on -- go into it eyes open, know what the consequences are and what the potentiality for success is, and what are some of the alternatives here. …

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   Others on this topic:

   Obama as a Leader

   So one of the issues you said was the time issue was one of the risks. The process --

   Can I say one thing? I want to go off my point. A lot of people look for leadership today, OK? What is leadership?

   On the Race to the Top, the president of the United States took on a very powerful constituency of his own party to see through an education goal for the country. I say that because Bill Gates said to me, he says, when I was speaking at something, he applauded when I talked about Race to the Top only because he says that's where he thought the president most put nation above party. Name me one thing a Republican nominee has ever spoken against the base of their party. One. Gay marriage. Gun control. Taxes. I mean, 100 percent correct on everything.

   OK, two. The president's own party was against what he said on Afghanistan. Showed leadership.

   Third, auto industry. A lot of people advocated bankruptcy. A lot of people advocated Chrysler. He picked a different course and then stuck to it.

   Health care, even though I advocated different, he doubled down, even when the chips were down, to get something that had been elusive to other presidents for 80 years.

   In the financial area, people were advocating nationalizing banks. People were advocating breaking up banks. Picked a different course.

   Leadership is about willing to put the chips down and lead a country even though [there are] adverse political consequences. And time and again he has shown that. That's what leadership is.

   And I say it's in direct contrast many times with people in the Republican Party who have yet to in one area, find fault or difference with parts of their own party. And there can't be one party absolutely right 100 percent of the time. Not possible.

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   Others on this topic:

   Obamacare

   The process, though, that you guys underwent, by putting it into Congress' hands, by dealing with [Sen. Max] Baucus [D-Mont.] basically taking the lead role, by the courting of the Gang of Six and such, time was lost. When you look back at it now, was that a mistake? Was that a trap that you guys kind of got caught in? Was that something that could have been done differently?

   Look, you have a couple models here. You could send up a totally drawn, drafted health care bill, and then every change is a change is to the president's bill. Or you can send them a send them a set of principles that guide the legislative.

   Now, I remember being in the White House till 2:00 in the morning around the Cabinet table. So it's not like this Congress was -- I don't know. I remember being up in the speaker's office trying to get it out of a committee right before August recess.

   So the White House was intimately involved setting out broad principles that shouldn't be violated. And I remember him telling, in the Roosevelt Room, when he told the Republican members of the House and Senate, "Without this, this or this provision, I won't sign it." There were some bottom-line principles that had to be done.

   So you could look at what happened in the Senate Finance Committee, OK. You can also look at the end product and look that he basically changed 80 years of history, where other presidents, from Truman forward, didn't get.

   So can you look at a legislative moment in a time and say you would have done it different? Yeah, I suppose. But I also know this: It got done.

   At the time, though, were you biting on the bit, basically wishing that he would go less bipartisan and maybe do more --

   (Laughs.) First of all, you act like there was a willing hand on the other side. I find that a very interesting perspective. I'm not sure I would agree with that perspective.

   It's not news that I advocated a more modest bill, based on a series -- and he asked me for my honest opinions, even while he was pursuing this to check on whether he was on the right course, not because I thought there was going to be great bipartisanship, but for all the consequences of time in this, and what that means for the rest of your agenda that you need to get through.

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   Others on this topic:

   Obama as a Leader

   Can you describe a little bit of what it was like in those rooms at the White House? You started to talk about that, that there's a debate that goes on. He listens to all sides. What's it like to be in that room? He's debating within himself; he's listening to people. How does it work?

   You know, first of all, he'll read the brief the night before. I mean, he usually starts with, "Here's what I think the main argument is; here's what I think the premise of your argument," because usually meetings don't start without having gotten material the night before to read and study. And he's read it, and he's got the assumption of every argument. He may start asking the principal policy person: "What does this mean? Why is it like this? What is the consequence? Why do you think that this is as many people we can insure, this is what's going to happen?" He'll want to know that.

   He'll want to know the politics around something. You're in a political environment. He's more of a prober on questions. He wants a debate to happen. He's not scared to have staff that have different views. He doesn't want a lot of yes-people around.

   And there are a lot -- sure, there's tense moments. First of all, there's not a right and a wrong. You don't need somebody's judgment for right and wrong. That's not hard. Nothing in front of you is right and wrong. Nothing.

   You need somebody with judgment, somebody with ability to ask questions, somebody that can learn, doesn't come in and know all the answers beforehand, and somebody that can weigh all the equities against each other. And that's how he runs a process, he runs the White House, and how he leads.

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   Others on this topic:

   Bipartisan Battles

   The Tea Party's rise wasn't about health care

   So you go through this summer of discontent, the Tea Party rising up and such. What was the read on that, the anger that seemed to be out there about health care?

   I've got to tell you, I don't really buy your premise, OK? It's not like health care organized the Tea Party. It's not like he didn't have a lot of people barking at him when he was running for the presidency. A lot of people that were quote/unquote "in the Tea Party" were already people that opposed him.

   Well, you look at the demonstrations, there's a lot of pictures of him in pretty weird stances.

   And there were a lot of people saying things when he was running against [Sen.] John McCain [R-Ariz.] and [Gov.] Sarah Palin [R-Alaska] at their rallies that were not exactly pretty things either.

   So how did you read what was happening?

   It was an outgrowth of what happened in the campaign and his presidency, and not just the policies, but also about the person, and also some of the policies.

   But also you were living in a time -- let's not forget this -- we had just come through a decade that, for the first time, the middle-class standard of living had declined. We hadn't ever experienced that as a country. The middle class went through a period of quote/unquote "economic expansion" with their standard of living -- rather the median income, declining. We never as a nation in 200 years ever experienced that.

   And then, two, they get whacked by a recession, the worst ever.

   And then the president gets into office. Now, if you think those two precedents had nothing to do with how people felt about their economic security and insecurity, I've got a bridge over the Tigris River you can buy.

   So there's a lot of factors that go into this, and it's not he showed up and all of a sudden this partisanship arrived on the Capitol steps, OK? So anybody that says that, I don't quite understand where they're coming from.

   That partisanship was fueled by an economic dislocation that had been happening for a long time, over the last decade. Then was whacked by a severe recession, which means then you had to make a series of tough choices that weren't going to make a lot of people happy about transition.

   And then you had him, which is also true about how people felt about -- I mean, a little more potency to it -- about Bill Clinton. I went through a period of time with Bill Clinton. I don't remember that had a lot of wine and roses. …

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    Had in Obama, and in the staff, had there been some movement in the sort of way it was viewed on how things needed to be done with Congress to achieve the goals that were necessary?

    Look at it as you have a president pretty determined to see through what he thinks needs to get done, willing to be flexible on what the makeup of it is, but not whether we get anything done. It's not like the members of the Republican leadership are eager to get things done. They are in control of the House. You've had two votes to repeal health care post the Supreme Court decision.

    So, I mean, it's not like they wake up one day and say X. This has been an attitude. And as the president has pushed forward, they have resisted harder.

    Last thing on health care, and then a couple other areas. Was the understanding that this put Democrats at risk, the whole thing of continuing to push through health care? Did he know and did he understand that his presidency was at stake here?

    He understood that his presidency was at stake. He understood that he was asking people to make a very difficult vote. He also tried to explain the historic opportunity.

    And he does believe that that's what leadership's about, willing to put political capital on the line. And he has shown it in the auto industry. He showed it in the financial sector. He showed it in Iraq. Afghanistan, the Republican nominee wants to stay. So he's shown that, and that's what he believes.

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    Others on this topic:

    A War President

    It shouldn't be a surprise that Obama is an 'aggressive' war president

    So let's talk about the war and him being a war president, something that a lot of his supporters didn't understand about him at the beginning.

    I find that -- it's like this. He told everybody he was going to be aggressive. He told everybody what he was going to do about targets. He said that "If I can find Osama bin Laden in Pakistan, I'll take that chance." You may not want to hear it, but he's talked about it. It's not a surprise. You may have been selective in what you heard, but he said it. You can't point to a single part of the way he's executed policy that he didn't enunciate beforehand.

    The drone policies. Surprising? Was there much debate over how to proceed with expanding the drone policies after Bush?

    Sure, there was a lot of discussion about appropriateness. What are some of the checks and balances on it? How do you decide? What are the protocols around it?

    There was even a discussion -- well, I think the best way to say it is, he knew this was an instrument in our national security apparatus or a tool. If we're going to use it, how do we use it, and where's it appropriate, and what are the protocols around it. I don't remember really whether we would use it, but I remember since we were going to use it, how to reform it.

    And the decision that he would be so involved in the targeting, explain that. What was that all about? Why was that?

    You're saying targeting, I don't think he -- we know there's a list in the sense of the top leadership. But it's not like every --

    The way it's been defined recently is that he is in completely within that circle and he's the one making final decisions on whether they can or cannot go forward. I mean, why is that? It's been described in different ways why that's important.

    Look, I don't know. When I was in the White House, it's not like he went over every decision that was being made on drones. So that may have changed as it relates to -- I've been there with some certain discussions. I've got to be careful here, OK? But the notion that he's on every decision, that may be new.

    And as far as this idea of using drones, of --

    That's just a piece of a policy.

    But he's hit for being very aggressive in a program that's very secretive. Explain to those out there who elected him, who sort of never quite understood how a guy that they expected to be a pacifist --

    Well, first of all, he told you he wasn't. He's talked about a just war. One of his first criticism when he ran for Senate about the Iraq war was that there are times you have to as a nation go to war, and he felt this would color our decision to do that. He was up front when he ran for Senate.

    Second is, the drone policy is not America's foreign policy. It's an instrument in America's foreign policy, and it has targeted terrorists who are trying to do us harm. And when we got there, from Osama bin Laden to [Anwar al-]Awlaki and about another 24 individuals who were in the leadership of Al Qaeda are no longer a threat to the United States.

    That's the byproduct of that piece of America's foreign policy. That is not our national security as it relates to China; it's not our national security as it relates to Russia. It's not how we look at Europe; it's not how we look at putting our policy together in the Mideast. As it relates to terrorists, as it relates to their attempt to threaten us, that's how we have dealt -- one of the ways, not the only -- one of the way we've dealt with them.

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    The midterm elections. I know you're gone, but --

    I'm gone from here, too, I'm leaving soon. (Laughs.)

    The midterm elections. How is that viewed? It wasn't a surprise. Did it change the way that the policy was pursued? Did it change the way that the goals were viewed? How did something like that election change things?

    Once you change power on the Capitol Hill, it changes how the other side of Pennsylvania deals with it: who are the players, what's possible, whether they want to get anything done, whether they even want to work with you, who got elected in their own caucus. A lot of things. The calculus gets reconfigured dramatically, quickly.

    Did it change Obama? Did it change Obama and the way he looked at things? Some people think he was naive in what he thought he could accomplish in Congress.

    But he did. Let's go back here. Would you agree that health care was a big accomplishment?

    I'm not in this thing, so it doesn't matter.

    OK, well, let's just say this. He passed a stimulus bill. He passed major legislation that had been stymied for years, like the kids' tobacco, kids' health care, a Consumer Bill of Rights, Lilly Ledbetter. I can go through -- there's a whole list. Take the mileage efficiency of cars. How long has Washington been debating that? Thirty years. Done. Mileage efficiency of trucks, done. This is 30 years of debate, like nothing happened.

    Health care. Won't you agree? Eighty years we've been discussing it. Glass-Steagall was repealed today. You're interviewing me on the day on which [former chairman and CEO of Citigroup] Sandy Weill, the leading spokesman of repealing Glass-Steagall, now calls for a replace -- we passed the first major financial reform since the repeal of Glass-Steagall in '99.

    Now, you can talk about it should have been done this way, that person should have been called. It got done. Both of the policies in all those bills were bipartisan. In a different environment, they may have passed in a different way. But it's very productive. No doubt. Things that we have been discussing for 30 to 40 years finally moved forward. It's just a fact. …

13. Ψ ShareThe 2012 election is about 'restoring hope to the middle class'

    And as far as the last election being about hope and change, what does this election become?

    Well, it is still about restoring hope to the middle class, because as I said in this interview, for the first time in American history, under the previous administration and not because of it, but under it, the middle class saw their standard of living decline. The median income went down for the first time. And then they got whacked by a recession.

    And there's still an ability to restore hope to the middle class that have seen some very, very difficult times. You see it in the city. Middle-class families are this close to always being that fragile. And every effort to help them find a way to save so they can send their kids to college, save so health care doesn't put them in bankruptcy, save so they can make sure they have the skills to move up the economic ladder financially and give their family more security is part of his desire to make sure the middle class in this economy have the tools to succeed, not the tools to survive.

    I'm done.

    Last thing. The title of this program is called The Choice 2012. What's the choice?

    Between a president that will fight for the middle class and the president who's never met them or a nominee who's never met them.

    Romney's never met the middle class?

    No. And I think the middle class will tell you up front. They know that their experiences, their day-to-day challenges are not part of his worldview and not something he's ever been exposed to. It's not. And I said, versus a president who has -- look, let me put it this way: Mitt Romney wanted the auto industry to go bankrupt because that's the world he deals with. He looks at a bunch of financial numbers. Now, you can ridicule a president who's spent time as a community organizer, who worked on the South Side [of Chicago] and saw steel industry after steel industry close and what it meant to an individual, their family and the community, which is why when people are advocating bankruptcy, he remembered the eyes, the voices and the fear in people's eyes when they saw bankruptcy.

    And that auto industry, because of his courage to finally do what the executives of those industries never did, and the union leadership that never did, and the bankers that never did, and the suppliers that never did, and the dealership that never did, made them change. And they're today a different industry, much stronger, and for the first time in a long time in American history, creating jobs here. And that's the difference in the choice between somebody who's not heard the voices of the middle class and somebody who's been eye to eye with it and their challenges.