James Baker and Clinton's deficit - 26 February 1993

Who was it said "the obvious seldom gets noticed"? Aristotle, I think, or maybe it was Bob Hope, either way I'm constantly surprised to find myself after 60 years of watching, sometimes scrutinising this country noticing something simple that's been there glaring at you all the time.

It took me about 30 years to notice that, whereas Englishmen blow their noses, Americans wipe them. I'd never have spotted that if it hadn't been for my daughter, a tot at the time, who came running down a hall after I'd blown my nose and shouted "what's going on here, what was that?" even though she'd lived with me for all of her five, six years the trump of an Englishman blowing his nose was alarming if not a martial sound.

And not too many years ago, I finally stopped asking in delicatessens and grocer shops for a bottle of soda water. I should have known better because asking for a drink in a club, especially in the Midwest where Germans had prevailed as the cultural force in many things, asking for soda water produced a blank look from the waiter, gently corrected by your host, you'd ask for seltzer or charged water. But in shops everywhere the usual response to soda water was "what flavour?" Well, in the end, I discovered what had been there ever since I sailed into New York, club soda. By the time I started using this regularly the custom had changed across the whole country, seltzer is now preferred.

I think I'm sure that it was my old friend and mentor the late Sir Denis Brogan - who knew more American history and more French history than all but a fraction of Americans and Frenchmen - who said, "you can get to know a country in some things better than the great majority of the natives, but the only certain mistake you'll make will be elementary ones". Ah so, how true. Many of you I'm sure are aware of how often down the years I've pointed out the differences in power and procedure between a parliamentary system and the American system.

There's one difference I've always known about at the back of my mind, but for the first time it has come to the front. Whenever a new administration takes over, I mean a new man from the out party, we have to get used to a whole large cast of literally new faces, wouldn't that have been so if Mr Kinnock had defeated Mr Major? No, for the simple reason that in the American system there's no such thing as a shadow cabinet. In a parliamentary country, if the party in power was defeated at the next election, you'd know practically all the incoming cabinet members, you've seen them there speaking about this speciality from the opposition benches, but in America the cabinet is not recruited from the legislature but from the president's friendships and his personal admirations. And America is comparatively careless of its talent and talent that is on the presidential side.

The morning after the election of President Clinton, several hundred knowledgeable people were out of a job. I think this hurts the country at the highest level particularly, consider Mr James Baker was Mr Bush's campaign manager but more important Reagan's secretary of the treasury, then chief of staff and for the past four years secretary of state during which time he had a front seat or rather a back-stage view of the collapse of European communism, the fragmenting of the Soviet Republics, the breakdown of Yugoslavia, the revival across Eastern Europe and the Middle East of ethnic, tribal and religious old hatreds, the crisis of Desert Storm. He's the one man since Jimmy Carter to get the Israelis and the Palestinians to sit down and talk, not for long, but long enough to bring a flicker of hope to a perennially hopeless feud.

Well on 3 November, Mr Baker had gone for good home to Wyoming to fish and rest for the first time in 12 years; his expertise and judgement are dispensed with overnight. I doubt he's had a phone call from anyone in the Clinton administration. It's an optimistic system, the idea that a new man brings in a new team of gung-ho eager beavers equipped with new energy, new ideas. Only about six to nine months later do they discover that in foreign policy anyway, there are no new ideas, haven't been since the Persian kings. Put it another way, an old secretary of state long gone once confided to me that when you come to power get there, get into your office in the state department or the Oval Office in the White House, you see that the choices either of politics or statesmanship are very little different from the ones that faced the outgoing administration. In other words, he said "you have to spend about six months liquidating your campaign rhetoric and then get down to the daily un-dramatic business of trying to look different from your opponents".

In the meantime, the truly able members of the last administration are not called on, have gone looking for a job, rejoined the old law firm, more often than not become a consultant to some high sounding outfit called the James Madison Institute for diplomatic and political initiative research. At worst, they become a moderator of a television discussion programme.

I look back and think of the many cabinet officers who in the heyday of their power learned a great deal about China or the Middle East or defence or international trade, housing, whatever was their portfolio grew up out of ignorance and then in one night were cashiered, banished to share their knowledge and new-found insights with their friends or as I have good reason to remember with any journalist who will listen to them. It's a pity but as it is, as I say, we're still busy learning to recognise the faces and in the barnstorming operation now underway to sell the president's budget the voices of the new cabinet, only two of them were in the Congress, the secretary of the treasury and the ailing secretary of defence. To have anybody from the Congress is rare. A cabinet is made up of cronies of the president who have acquired some public distinction elsewhere; his kitchen cabinet, the day and night advisors he couldn't do without, the kitchen cabinet is nearly always made up of old school friends, buddies from the old home town whose faces we rarely see, but they are the people who really contrive policy for the president to sell.

One feature of this last presidential succession that's quite new, Mr Clinton did not wait six months to liquidate his campaign rhetoric or modify the big promise that got him elected, he didn't wait six weeks. By the fourth week, he'd said frankly with that rueful little smile and his bull-like shake of the head "Gee fellas, sorry about the new big deal that promised a tax cut for the whole middle class, things were worse all over than I'd guessed". So, whereas also I said way back there in October that we were really going to soak the rich and make old folks who are comfortably off pay a bigger percentage of their medical costs, I now find sure we'll soak the rich but not enough to hurt investment and I'm not sure it's such a great idea to slap a lump sum penalty on the senior citizens, perhaps we'll have to means test them.

A means test - this is me speaking - a means test always sounds the fairest way of determining who qualifies for government handouts. The curse of means testing is the means of doing it, it requires if not a large new bureaucracy, a huge extension of an existing bureaucracy to poke into every home of everyone 65 or over, check all the sources of their income, build up an Everest of paperwork and then assess the proper allowance. It's true that at the moment, the government's money that goes to the ailing rich is a preposterous percentage of the budget.

I know an old man who recently had a major operation, he was in the hospital five weeks, his private room just a spare and clinical as everyone else is, his private room cost $1700 a night. Neither the government nor a union will pay for a private room, semi-private, yes, that's only $1500 a night. So the old man paid 200 a night, in all, his operation, surgeon, anaesthesiologist, medical doctor assigned to him, drugs, procedures like X-rays, CAT scans, CCGs, Doppler test etc etc, hospital room telephone, television, physical therapy, the lot. His total bill came to between $55 and $60,000. If he'd been 64 and not rich he'd have been ruined, but he was over 65 and he could easily have afforded to pay half of that, in a pinch all of it. He paid just under $2,000. Something has to be done of course.

But the grim gravelling fact when Mr Clinton is through with his sales campaign and the Republicans have done with their automatic old grouch of spending freeze right across the board, the oldest truth will emerge that Medicare for the old, Medicaid for the very poor, social security for everybody and all the attendant services for the veterans, welfare, food stamps, homeless shelters, platforms and parking and what not for the disabled, children's care, the whole cornucopia of services that have accumulated since the Second War, they constitute close to 60% of any budget frozen in spite of the constant Republican whine about cutting entitlements which is what most of those services have come to be called, the fact is nobody dares, no administration. Of course, the services are wonderful, wide ranging, imaginative, humane, long overdue, but the federal government can't afford them. Nobody can, we keep them all going by increasing the debt and the deficit.

About three months from now, we shall know what the stopgap solution is, whether to start taxing more and spending more or, as the Republicans constantly recommend, drastically cut spending, freeze all entitlements and sit back and wait for the revolution.

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