Because of the possibility that our strategy would produce a short-term slowdown, we searched for ways to promote more growth. I met with executives of the Big Three automakers and Owen Bieber, president of the United Auto Workers, who said that while Japanese cars had almost 30 percent of the American market, Japan was still largely closed to American cars and auto-parts suppliers. I asked Mickey Kantor to find a way to open the Japanese market more. Representatives of the fast-growing biotechnology industry told me that our research-and-development tax credit should be extended and made refundable for young firms, which often didn’t make enough money to claim the full credit under current law. They also wanted stronger protection for their patents against unfair competition, and modifications in and acceleration of the product-approval process of the Food and Drug Administration. I told the team to analyze their proposals and make a recommendation. Finally, I authorized the development of the $20
billion one-shot stimulus proposal to increase economic activity in the short run. I hated to give up the middle-class tax cut, but with the deficit numbers worse, there was no choice. If our strategy worked, the middle class would see direct benefits worth far more than a tax cut—in the form of lower home mortgages and lower interest rates on things like car payments, credit card purchases, and student loans. We also wouldn’t be able to increase spending as much as I had proposed in the campaign, at least at first. But if deficit reduction brought interest rates down and growth up, tax revenues would increase, and I could still meet my investment objectives over four years. That was a big
“if.”
There was also another big “if.” The strategy would work only if Congress adopted it. After Bush’s defeat, the Republicans were more anti-tax than ever, so few, if any, of them would vote for any plan I put up with new taxes in it. A lot of Democrats who came from conservative districts would also be wary of tax votes, and liberal Democrats from safe seats might not support the budget if the cuts were too steep in programs they believed in.
After a campaign during which the economic problems of America were center stage, in a time when growth was lagging all over the world, I would begin my presidency with an economic strategy for which there was no precedent. It could bring enormous benefits if I could convince Congress to pass the budget, and if it got the hoped-for response from the Federal Reserve and the bond market. There were compelling arguments for it, but the most important domestic decision of my presidency was still one big gamble.
While most of the transition was occupied by the cabinet and other appointments and the development of our economic program, a number of other things were going on. On January 5, I held a meeting leading to the announcement that I would temporarily continue President Bush’s policy of intercepting and returning Haitians who were trying to reach the United States by boat, a policy I had strongly criticized during the election. After Haiti’s elected president, Jean-Bertrand Aristide, was overthrown by Lieutenant General Raoul Cedras and his allies in 1991, Haitian sympathizers of Aristide had begun to flee the island. When the Bush administration, which appeared to be more sympathetic to Cedras than I was, began to return the refugees, there were loud protests from the human rights community. I wanted to make it easier for Haitians to seek and obtain political asylum in the United States, but was concerned that large numbers of them would perish in trying to get here in rickety boats on the high seas, as about four hundred had done just a week earlier. So, on the advice of our security team, I said that, instead of taking in all the Haitians who could survive the voyage to America, we would beef up our official presence in Haiti and speed up asylum claims there. In the meantime, for safety reasons, we would continue to stop the boats and return the passengers. Ironically, while human rights groups criticized the announcement, and the press characterized it as going back on my campaign pledge, President Aristide supported my position. He knew we would bring more Haitians to the United States than the Bush administration had, and he didn’t want his people to drown.
