When President Clinton met with congressional leaders in the White House for the first time to discuss his economic agenda, Robert E. Rubin was by his side. When Clinton met privately with Federal Reserve Chairman Alan Greenspan, Rubin was there, too. And when the White House sent out urgent requests to Cabinet departments for specific proposals to round out Clinton’s emergency jobs program, Rubin was doing the asking.
In the early days of the Clinton Administration, it’s quickly becoming clear that Rubin is the man to see.
As assistant to the President for economic affairs and chairman of Clinton’s new National Economic Council, Rubin is quietly staking out an influential role in virtually every aspect of economic policy. For starters, he has effectively taken charge of coordinating and crafting the job creation and economic growth package that is to be unveiled in Clinton’s State of the Union message on Feb. 17.
Despite Administration efforts to downplay the power of the new economic council, the NEC seems destined to rival the Treasury, the Office of Management and Budget and the U.S. Trade Representative’s Office for influence over domestic and international economic matters.
If access equals power in Washington, Rubin clearly has both.
Administration officials note that Clinton meets daily with only three advisers: White House Chief of Staff Thomas (Mack) McLarty, National Security Adviser Anthony Lake--and Rubin.
Rubin, 54, is among the richest people ever to take a White House staff position. He rose through the ranks to become chief executive of Goldman Sachs, a powerful Wall Street investment firm, accumulating a personal fortune estimated at more than $50 million.
Just as he helped ensure Goldman Sachs’ success during the heady days of the 1980s investment boom, he seems to be methodically building up the stature of Clinton’s National Economic Council.
Formally established by presidential order on Jan. 25, the new agency creates a joint staff with the National Security Council to handle trade and other international economic issues for the White House and ensures that the two councils are considered coequals.
Rubin has been named a member of the NSC as well, and his deputy, W. Bowman Cutter, will sit in on NSC staff meetings involving economic policy. Samuel (Sandy) Berger, deputy to Lake, also will attend NEC staff meetings.
“If you take the NSC as a model and look at it in the economic area, that is a good model for what we want to do,” Rubin said. “We try to make sure there are effective processes in place” for economic policy-making, Rubin added.
“Bob Rubin will be like Brent Scowcroft,” said one White House source, referring to George Bush’s national security adviser. “He will be an honest broker mediating policy disputes. But being an honest broker doesn’t mean he will be Caspar Milquetoast or Mr. Congeniality. He is going to have a key role. But a quiet role.”
Rubin is already discovering that it is far more difficult to keep a low profile in Washington than it is on Wall Street. He took his first public lumps when the New York Times reported Friday that Rubin had sent a letter in December to Goldman Sachs’ investment banking clients, telling them of his new job and inviting them to keep in touch. “I also look forward to continuing to work with you in my new capacity,” Rubin wrote.
Rubin defended his letter in a later interview. “The letter was an innocuous comment that I would make to anybody, that we would like to work with anybody who is relevant to the economy of the United States,” he said. “That’s really what this letter was intended to say.”
Rubin, who made appearances in Washington during the Bush Administration to lobby on behalf of Goldman Sachs on banking reform, said that he will scrupulously avoid any actions that could be construed as advancing the interests of Goldman Sachs or his former clients.
“Any entity that has dealings with this office will have its positions judged solely on the criterion of what is in the best interests of the American economy,” he said.
Rubin’s relationships with other key Administration policy-makers are still evolving; he and his aides insist that he wants to avoid the spotlight and that the White House wants Treasury Secretary Lloyd Bentsen to remain the primary spokesman for economic policy. Several sources pointedly note that, while at Goldman Sachs, Rubin once served as Bentsen’s personal financial adviser, and so the two already have close ties.
Rubin’s mandate will be so broad that it will require a careful balancing act to avoid turf fights with Clinton’s other advisers. Administration sources noted, for instance, that Rubin is likely to attend the annual economic summit meetings of the major industrial nations with Bentsen. And he is delving deeply into budget issues with Leon E. Panetta, director of the Office of Management and Budget.
Rubin also seems likely to take over the job of White House liaison with the Federal Reserve, a task that was handled by the chairman of the Council of Economic Advisers in past administrations. Senior Federal Reserve officials, sensing where the new center of power is in the White House, have made it clear that when they want to get a message to Clinton, they plan to go to Rubin rather than Laura D’Andrea Tyson, the new chairwoman of the Council of Economic Advisers.
Another early indication of Rubin’s wide latitude came last week, when U.S. Trade Representative Mickey Kantor announced that retaliatory trade measures against the European Community had been taken “only after careful consultation with all affected agencies and guidance from the National Economic Council.”
The creation of the NEC in the West Wing of the White House fulfills a Clinton campaign pledge to upgrade the status of economic policy-making and to ensure that economic issues are considered before the President makes decisions on domestic and international matters.
“The currency of national strength in this new era will be denominated not only in ships and tanks and planes but in diplomas and patents and paychecks,” Clinton said in a foreign policy address at the Los Angeles World Affairs Council last August, when he first raised the idea of creating the council.
Yet aides said that Clinton privately admired the way in which Bush’s national security team worked, especially during the Persian Gulf War. The President would like to recreate that sense of teamwork in economic affairs, they said.
The NEC is where that team will come together. The council’s members include the President and Vice President Al Gore, as well as every major Cabinet-level official involved in economic policy-making.
The Clinton council was modeled largely after a similar economic policy board created during the Gerald R. Ford Administration. Run by L. William Seidman, who later became chairman of the Federal Deposit Insurance Corp., the Ford council was hailed by political scientists for having effectively brought economic policy issues to the forefront in the White House.
Seidman himself was essential to making it work: He was viewed as an “honest broker” who didn’t try to use his control of the board to kill ideas or exclude rivals from access to the President. Clinton officials described Rubin’s role as that of an honest broker as well; staffers stressed that Rubin’s low-key demeanor and his pragmatic policy outlook make him ideal for the role of White House mediator.
Rubin, a major Clinton fund-raiser and economic adviser, was among the initial field of candidates for secretary of the Treasury. After losing out to Bentsen for that job, he quickly emerged as the leading contender to run the NEC.
Friends of Rubin insisted that he does not view the NEC post as a consolation prize. “I don’t think this was a consolation,” said Richard Ravitch, a New York lawyer who is close to Rubin.
Rubin has spent virtually his entire career at Goldman Sachs, working his way up through the ranks of the elite investment banking house and striking it rich during the speculative bubble of the 1980s that Bill Clinton railed against during the campaign.
As a partner and co-chairman of the private firm, Rubin reportedly received roughly 2% of Goldman Sachs’ profits, which would have brought him $15 million just last year. He has not yet submitted a financial disclosure report but his ownership stake in Goldman Sachs is reportedly worth $50 million to $100 million. He is expected to convert most of that into interest-bearing notes when he cashes out of the partnership.
Throughout his business career, Rubin has been deeply involved in New York Democratic politics and fund-raising. His politics are centrist; he is described by friends as slightly liberal on social issues and relatively conservative on economic affairs and that places him right in the mainstream of the Clinton Administration’s political spectrum. His wife, Judith Rubin, is protocol commissioner for New York Mayor David N. Dinkins.
Last year, Rubin served on New York Gov. Mario M. Cuomo’s Commission on Competitiveness, which issued a detailed national policy agenda just after the presidential election. Rubin, who has said that he cares more passionately about urban affairs than any other political issue, was in charge of the commission’s review of inner-city poverty, which blasted the federal government’s neglect of the cities during the 1980s.
Now, as Rubin and his staff at the NEC feel their way through the Washington political mine field, they recognize that the real challenge they face is to run the show without appearing to do so.
“You know what (the late Secretary of State) George Marshall said was really true,” observed one Rubin aide. “You can get anything done in Washington as long as you don’t feel the need to take credit for it.”
Times staff writer Dwight Morris contributed to this story.