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  •   In Clinton Ritual, Key Advisers Hold Clashing Views on Tobacco Deal

    By John F. Harris
    Washington Post Staff Writer
    Monday, September 8, 1997; Page A01

    All through her late teens and twenties, Donna Shalala had the habit bad. The future secretary of Health and Human Services smoked her way through graduate school at the rate of a pack a day, until one morning at age 29 she woke up with such a foul taste in her mouth that she willed herself to quit.

    "I know how hard it is to stop smoking," she recalls nearly three decades after giving it up, "and I also know how enticing it is to young women."

    Bruce Reed, by contrast, says he never felt the lure of tobacco. The man who is now President Clinton's chief domestic policy adviser thinks he may have puffed a cigarette once or twice – his memories of it are vague – but the boyish-looking former Rhodes scholar recalls he was "not the least bit tempted" to take up smoking.

    This summer, Reed and Shalala, a political odd couple who regularly find themselves on opposite sides of the most divisive questions facing Clinton, have been the twin poles of a roiling internal debate about tobacco: She loathes the tobacco companies and wants to punish them; he regards them with detachment and mild disdain, but is eager for a compromise.

    The pair headed an administration review – two months past its original due date but now scheduled to be presented to Clinton this week – of a proposed settlement with the tobacco industry. Instead of flatly blessing or condemning the settlement plan, Clinton is to make a public statement describing changes he wants Congress to make.

    That such opposites as Reed and Shalala would share responsibility for such a delicate assignment tells a story about the Clinton style of decision-making. Rather than being paralyzed by the tug of war between different advisers, according to numerous current and former aides, Clinton finds the tension liberating.

    What strikes critics as the disorderly and agonized deliberations of a leader who wants to please all sides is, in the eyes of admirers, a highly personalized ritual in which Clinton makes himself comfortable with his decisions.

    "He waits for issues to sort themselves out," said former White House senior adviser George Stephanopoulos, who two years ago oversaw a similar administration review of affirmative action. "Choosing Bruce and Donna [to study tobacco] guaranteed there'd be a debate."

    Clinton's style, he said, is to hang back while advisers clash, until "there comes a point at the end where he seizes the issue and it seizes him and that's basically all he does – like a student approaching a final."

    A vivid example occurred last summer when Reed and Shalala pleaded for Clinton's favor in an anguished internal debate over whether he should sign a Republican version of welfare reform. Reed, a 37-year-old "new Democrat," said yes; Shalala, a 56-year-old voice for traditional liberalism, urged a veto. Reed's argument carried the day, and while some senior aides to Shalala resigned in protest, she soldiered on and publicly supported the boss's choice.

    The review of the proposed tobacco settlement has not been as agonizing as the showdown over welfare. The behind-the-scenes debate, say participants, has revolved around complicated policy questions: How much regulatory power would the deal, negotiated earlier this year by the tobacco companies and various state attorneys general, leave in the hands of the Food and Drug Administration? What should the penalties on the tobacco industry be if youth smoking does not decline by as much as the companies have pledged?

    But many of the deliberations, according to several people familiar with them, boiled down in the end to the sharply different emotional and ideological responses of Reed and Shalala to the subject of smoking.

    Shalala, like many former smokers and many of her liberal allies on Capitol Hill, holds the tobacco industry in something close to contempt. Along with Vice President Gore, who largely shares her antipathy, Shalala has approached the tobacco settlement with high skepticism. She says she is worried cigarette makers may get off too lightly for a record of deception about the health consequences of their products and that the settlement as drafted would weaken the federal government's regulatory power over cigarettes.

    "We know that the tobacco industry likes the settlement," said Shalala, noting that tobacco stocks climbed after the proposed deal was announced. The issue is whether the deal is "tough enough and strong enough to advance the public health outcomes we are seeking."

    Of Clinton, Shalala said: "He is not going to be weak-kneed. He is not so desperate" that he wouldn't walk away from a deal if his terms are not met.

    Reed, like many moderate Democrats, says the key issue is not whether the tobacco industry is brought to its knees, but whether the administration can with a deal lock in restrictions on the marketing of cigarettes to young people that otherwise would be battled out in the courts. Like Shalala, Reed says he wants the deal toughened in some respects, but adds that winning certain gains now is preferable to the uncertain consequences of litigation.

    "It's a very easy issue to demagogue, and the tobacco industry is the devil," said Reed, "but we shouldn't miss the best opportunity we've had to hurt them and help kids in the bargain."

    Another senior White House aide said, "For Bruce, the critical issue is if it advances public health he will be for it, even if it doesn't punish tobacco companies as much as some would like."

    Their different ideologies spring from very different backgrounds. Shalala, who is of Lebanese descent, grew up in Cleveland and, in the early 1960s, served in the Peace Corps in Iran. Armed with a masters degree in social science, she rose through various academic posts at universities in New York, and served as treasurer of the agency that supervised the city during its bankruptcy in the 1970s. She served in the Carter administration, and in 1988 was named chancellor of the University of Wisconsin. Liberal interest groups in Washington regard her as among their closest allies in the Clinton administration.

    Reed, who grew up in Coeur d' Alene, Idaho, went to Princeton University, then to Oxford. In the 1980s he worked as a speech writer for then-Sen. Gore before joining the Democratic Leadership Council (DLC). The group, which Clinton once chaired, promotes the idea that Democrats must revamp their policies and abandon traditional liberalism. Reed was one of the first people hired by the Clinton campaign in 1992 and has worked at the White House since 1993.

    During the debate over welfare reform, recalls one senior White House official, Shalala peppered Clinton with statistics and studies saying that the bill would hurt the poor. But Reed prevailed, the official said, with a more personal appeal to Clinton that the bill was consistent with his campaign pledge to "end welfare as we know it."

    When the attorneys general and the tobacco industry announced their proposed settlement in June, Clinton said he would complete his review within 30 days. As many of his aides predicted, the review proved far more time-consuming than Clinton anticipated.

    Reed and Shalala have spent the past four months trying to assess how much the proposed settlement can be strengthened before the tobacco industry will balk and walk away from a settlement. Administration officials already have described some changes Clinton wants in the settlement; in particular, the president will insist on provisions strengthening the FDA's power to regulate tobacco and demand that a $368 billion payout the industry pledged be increased by $50 billion to offset a tax break Republicans gave tobacco in the recent tax bill.

    Shalala said she is not concerned that the tobacco industry might abandon the deal. "They're not going to," she said, adding that the companies "wouldn't have come this far" if they were not determined to strike a deal and avoid future court battles.

    J. Phil Carlton, who represents the tobacco companies, said Shalala should not be so sure. "The agreement as it was delivered on June 20 is what we've agreed to do," he said. "We haven't agreed to change one word in that document."

    Of Shalala, Carlton said he suspects, "It's got to look to her like the tobacco companies are about to go into bankruptcy."

    Of the administration's review, Carlton said: "I think Reed wants to do it but he doesn't think he's gotten all [the concessions] he can get."

    Reed has an ally in longtime Clinton aide Bruce Lindsey, who monitored the talks for the White House while the tobacco companies and the states were negotiating. Gore, by contrast, thinks there is little to be gained by a compromise, particularly if it angers many liberals, and there are political benefits to be reaped for both him and Clinton by casting themselves as implacable foes of tobacco.

    Despite numerous frustrations in the first term, when at various times both Shalala and Reed found themselves with little influence, both have chosen to persevere in the second term. And both have managed to adapt to Clinton's idiosyncratic way of coming to decisions.

    It is an accommodation that other supporters have made as well. Al From, the president of the DLC and a person who was occasionally disappointed by Clinton's early tenure, said he has come to realize that Clinton is more purposeful in decision-making than he realized at first. "He tends to get where he wants to go," he said. "Often the route there is more of a serpentine route, but he gets there."

    © Copyright 1997 The Washington Post Company

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