So how did Stephen Breyer make the final cut? The federal appeals-court judge who last weekend was the favorite to fill Byron White’s seat on the Supreme Court has a golden resume and a big brain. But even Breyer’s friends say he is hardly the “bighearted” pol Clinton had in mind. The Stanford and Harvard Law grad is an expert in administrative and antitrust law. But he’s no Earl Warren. Nor, for that matter, is he New York Gov. Mario Cuomo (Clinton’s first choice) or Education Secretary Richard Riley (second choice) or Interior Secretary Bruce Babbitt (the runner-up).
It was still conceivable that Clinton would do another backflip and choose Babbitt, the former governor of Arizona, who only a week ago was the odds-on favorite. Breyer, it turns out, has a problem not unlike the one that brought down Clinton’s first two choices to be attorney general, Zoe Baird and Kimba Wood. Breyer failed to pay taxes on his cleaning woman (an American citizen), who worked a half day a week for $50 for the last few years. Breyer paid up about $3,000 in back taxes within the last month, and the White House hoped that his oversight would be dismissed as a minor gaffe. White House lawyers have known about the situation for several weeks. They told Clinton, as well as key members of the Senate, and no one raised serious objections.
If Clinton does reverse course, it would be in character, however. No one can undecide a decision quite as often as Bill Clinton. That is one reason why so often in his fledgling presidency Clinton has appeared to walk away from his promises. From accepting gays in the military to welcoming Haitian refugees to rescuing Bosnia, Clinton has had to abandon his grand ideas because he lacks the discipline to make hard choices. The president’s three-month search for a Supreme Court justice typifies his tendency toward vacillation. It is more than yet another bungled appointment. It is a case study of the overreaching and dithering that has left Clinton’s friends dangling and disappointed his followers.
Maybe Clinton had too long to make up his mind. Justice White announced his resignation last March precisely so the president would have plenty of time to choose his successor. Clinton did try Cuomo, but the famously moody governor demurred. Not once but twice Clinton asked Riley, who had been a progressive governor of South Carolina. But Riley answered that he did not want to abandon his new post at Education or settle down to a long and sedentary life in Washington. At one point, desperate aides briefly considered recommending former president Jimmy Carter for the job.
Clinton’s search was further slowed by his somewhat contradictory impulse to seek diversity while taking care of his friends. White House staffers found themselves casting about for minorities and women-but preferably ones who knew Bill and Hillary. Judith Kaye, a New York state judge, had a chance to become the first Jewish justice in 24 years, but she too opted out. Politics got in the way of two other possibilities: Sens. George Mitchell and Joseph Lieberman. The president couldn’t afford to lose their votes on the Hill.
Political fortunes: As Clinton kept searching, his own political fortunes were waning. That raised yet a new consideration: the nominee had to be uncontroversial. Wounded by such flaps as the $200 tarmac haircut, the president could not stand a stormy confirmation hearing in the Senate Judiciary Committee. As he watched a furor erupt over Lani Guinier, his ill-fated nominee to run the civil-rights division at the Justice Department, Clinton began to lean more toward a safe white male.
The one he turned to was Bruce Babbitt. The former Arizona governor is popular with the press after his high-minded run for the presidency in 1988. At first, it looked as if Babbitt was a lock. White House aides began whispering his name, and Clinton called lawmakers to float Babbitt’s balloon, telling Democrat Dennis DeConcini that he was “heavily inclined” to choose his fellow Arizonan.
But as can happen only in Washington, Babbitt was done in partly by his own friends. The interior secretary wanted the job, but he was modest about it. Mistakenly, his aides thought he was reluctant to make the move. So they asked the environmental community to lobby the White House-particularly their eco-friend Vice President Al Gore-against the nomination. Soon the green lobby, joined by Western-state lawmakers, were out in force, protesting that Clinton could not afford to lose such a fine interior secretary.
At the same time, White House sources say, Clinton began studying the map-the electoral one. What if the Western states didn’t like Babbitt’s replacement at Interior? They might wind up in the GOP column in 1996. Meanwhile, Republican senators began rumbling. Orrin Hatch suggested that Babbitt would be too much of an “activist” justice. Committee chairman Joe Biden warned the White House that it’d have an easier time with another name on Clinton’s short-list-Judge Breyer.
Breyer’s own partisans understood that he could win only if others lost. “Breyer was never the president’s first choice,” said one friend. “The more flubs by the president and his staff, the better for Breyer.” They were heartened, then, when Babbitt twisted slowly in the newspaper headlines last week. At midweek, Breyer heard from the White House for the first time. He was asked to join the president for lunch on Friday. Breyer, who had broken two ribs and punctured a lung in a bicycle accident a few days before, happily struggled out of the hospital.
Warm blanket: A moderate, Breyer has support on both sides of the aisle. His biggest backer is liberal Sen. Ted Kennedy, a power on the Judiciary Committee, where Breyer once worked as chief counsel. To Clinton, whose economic plan is being shot at by the right and left on Capitol Hill, such bipartisan acceptance felt like a warm blanket. Babbitt, meanwhile, was left out in the cold. “You know, I can handle my enemies,” he mordantly observed to the Associated Press. “But I have had a hard time fending off my friends this time around.”
Clinton’s aides insisted that it was the boss’s hands-on style that made the selection process take so long and appear so arduous. “He tries things on, sees how they feel,” explained a senior aide. “Then he’ll try something else on. People shouldn’t jump to conclusions.” But they do, and Clinton ends up looking, once again, like a man who can’t make up his mind.
title: “Decisions Decisions” ShowToc: true date: “2023-01-22” author: “Darla Fahnestock”
LARRY NOLLER, WHEATON, ILL.
Steven Ames, of Ames Fee-Only Financial Planning in Annapolis, Md., on the one hand, thinks you should sell the stock and reduce the loan. The dividends you earn won’t cover the interest you’re going to owe. Lower monthly payments will leave you with more discretionary income. When you get a job, you can use that money to fund a tax-deductible retirement plan.
Planner Lynn Hopewell of The Monitor Group in Fairfax, Va., on the other hand, says you should hold the stock for now. What if you can’t get a job? What if you’re sick? In an emergency, you could turn that stock into cash. It’s OK, he says, to sell stocks to pay off a mortgage or credit-card debt. Those loans can be reinstated in a pinch. But student loans can’t be retrieved. His advice: build up a cash reserve, obtain access to other loans, then sell the stock to reduce your debt.
Both planners offer different advice to workers who are trying to choose between making extra payments on student loans or funding a deductible 401(k). In that case, they’d choose the 401(k).
QUESTION: I recently left my job with one printer (Bowne & Co. in New York City) to accept a position with another. I was fully vested in Bowne’s profit-sharing plan. But Bowne holds back the money if an employee has more than $10,000 in his or her account and goes to work for a competitor. I don’t get my funds until retirement age or until I haven’t worked for a competitor for two years. In the meantime, my money ($21,000) will be invested in a low-risk, interest-bearing account. Is this legal? Since I’m only 33, it hardly seems fair. Bowne won’t even answer my inquiries about my account.
ELIZABETH HELM, GLENDALE, CALIF.
But forcing you into a low-yield investment is another matter entirely. ““My opinion is that you either have to give the money to the person or try to maximize the return at a prudent level of risk,’’ says attorney David Preminger of Rosen, Preminger & Bloom in New York City. Employers are allowed to put restrictions on retirement-savings plans. But the plan’s trustees have to handle the money in the best interest of the beneficiaries. ““This is not in her interest,’’ Preminger says. ““It’s in the employer’s interest. It’s a punishment, to prevent people from working for competitors.’’ Bowne wouldn’t return NEWSWEEK’S calls.
There are points on both sides of this issue. You’d have to litigate to try to get your money invested for growth. Karen Ferguson of the Pension Rights Center in Washington, D.C., calls this ““a perfect example of why you need to read the rules of your pension plan before deciding to change jobs.’’ I believe, as you do, that it’s not fair to force you to earn low returns for the next 20 or 30 years. If it’s legal, it shouldn’t be.
QUESTION: This past spring, I attended financial-planning classes at Syracuse University’s extension division, given by Summit Planning Group. The $65 I paid for the course included one free hour of personal consultation. After that, Summit’s fee was $85 an hour, which I thought was charged in lieu of sales commissions. I realized I was wrong when my planner suggested that I withdraw from my MetLife IRA annuity and purchase one from Nationwide instead. If I did, he’d earn a commission but I’d owe MetLife a 4 percent penalty. How can one tell when a fee-charging planner might also be taking commissions?
ELSIE BERNNARDINI, EAST SYRACUSE, N.Y.
Bernardini says she told Summit that she wanted to pay for advice by the hour. She says she likes no-load funds, and bought a Kemper fund without realizing she was paying a sales charge.
Summit president Richard Urciuoli thinks Bernardini (who is still a client) just forgot about the charge. He says that he verbally discloses all sales charges and also gives out prospectuses. He tells clients, he says, that fixed annuities pat comm issions. But he also tells them there’s no cost because “everything’s paid by the insurance company.” That’s not quite how I see it. He earns 3 to 5 percent on every sale. The buyer’s cost is built into the annuity. Clients should always ask directly how a planner is compensated. You’d check the price of a washing machine. Do the same for financial products each time you buy.
