January 20, 1998


Analysis by Richard S. Dunham

Five years into his Presidency, Bill Clinton still gets no respect from the business community. Despite a booming economy, Corporate America doesn't give the President much credit for either helping to reduce the deficit or spur growth.

Business can't complain about Clinton's latest accomplishment, however: The President persuaded Chief of Staff Erskine B. Bowles to stay on the job rather than return to the private sector. Bowles, a venture capitalist from the entrepreneurial wing of the Democratic Party, has been a stabilizing influence on the White House and a moderating influence on White House policy initiatives.

As a manager, the conservative Democrat has run a tight ship in the West Wing, bringing discipline to the Presidential staff. He has cut down on internal backbiting and unauthorized leaks -- a need corporate execs can identify with.

Business should be most appreciative, though, of Bowles' role in the policymaking arena. His top 1997 achievement: A bipartisan balanced-budget agreement. It wasn't easy -- and it wasn't pretty -- but time and again, Bowles refused to allow the process to collapse. In the end, Clinton and the Republican leaders all could share the credit.

While there was sniping from unhappy ultraliberals and right-wingers (and some disappointment from business lobbyists who had hoped for a huge tax-cut bonanza), the deal gave something to everyone. Without denigrating the important roles played by Senate Majority Leader Trent Lott, Budget Director Franklin D. Raines, and others, Bowles was the indispensible player in the negotiations. He had the absolute confidence of the President and the trust of Capitol Hill Republicans.

No wonder Clinton wanted Bowles to stay. And despite the North Carolina businessman's oft-stated desire to return home, Clinton twisted his arm until he finally said yes. But before he did, Bowles made sure that his own personal priorities were shared by the President.

Atop the list: Maintaining fiscal discipline. While Clinton is sure to throw many a rhetorical sop to the Democratic left in his Jan. 27 State of the Union address, Bowles will make sure that the promises don't break the bank. Indeed, Bowles wants to see the budget balanced this year, four years ahead of the schedule agreed to in 1997. He'll have Republicans on his side there.

Bowles' decision to stay also means that entitlement reform will proceed. Bowles has been adamant about finding a bipartisan, long-term fix for the financial problems of both Medicare and Social Security. He'll try to keep the process from descending into empty rhetoric and long delays.

Another pet issue for the Chief of Staff is trade expansion. With Bowles at the helm, Clinton's free-trade instincts will find a strong supporter in internal debates. That means the White House is more likely to try to resurrect "fast-track" trade authorization. It also means that the Administration will push for further trade liberalization, a top business priority -- despite strong opposition from most Capitol Hill Democrats and the growing chorus of "America-First" Republicans.

Bowles' views reflect the priorities of many in business. He wants a larger investment in education, which he sees as the key to American global competitiveness in the next century. And more incentives for investment in technology.

Bowles is not running the show alone at the White House. His job is to implement the President's policy directives. And Democratic political operatives will spend much of 1998 looking for "wedge" issues to use against the GOP in November's mid-term elections. So the look of the Clinton Administration may be decidely more liberal in '98. But when business execs start to whine about the latest proposal from the White House, they should remember that their list of complaints would be a lot longer without the continuing presence of Erskine Bowles.

Dunham covers the White House for Business Week

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