Dick Cheney on Tax Cuts, Price Controls, and Our New Commander in Chief
An Interview by Adam Meyerson
Dick Cheney is one of the strongest potential contenders for the Republican presidential nomination in 1996. He is a man of national and international experience: best remembered for his distinguished performance as secretary of defense during America's Desert Storm victory, he was also White House chief of staff under President Gerald Ford, and then House Republican Whip, one of the top leadership positions in Congress. Elected six times to the House of Representatives from Wyoming, he has proven vote-winning ability in a state that went 26 percent for Ross Perot last year. He comes from the West, a region where Republicans are now in trouble -- and which they must recapture if they are to win back Congress and the presidency. He is one of the few Republican leaders widely respected by Democrats and independents. An economic conservative and a moderate on social issues, he probably also would be acceptable -- no small feat -- to all factions of the GOP.
His greatest challenge, should he aspire to national leadership, is to be a little bolder, a little more imaginative, a little more stirring in his rhetoric. His message is plain, no-nonsense, conventional, center-right Republicanism -- lower taxes, limited government, freer markets, a strong defense. This message could prove very attractive to Americans after four years of Bill Clinton. But will it be enough to galvanize the political coalitions Mr. Cheney would need to win -- and then to govern effectively? He already has won his countrymen's respect; can he now move them to action to cure America's economic ills and arrest its cultural breakdown?
I talked with Mr. Cheney in late May in his office at the American Enterprise Institute, where he currently is a senior fellow.
-- A. M.
Policy Review: It is now two years after the spectacular victory of the United States and its allies in Desert Storm. What objectives were achieved during this war?
Cheney: The best way to evaluate Desert Storm is to consider what the world would be like today if we hadn't fought and won this war. If we had taken a pass on Saddam's occupation of Kuwait, by today he would have the eastern province of Saudi Arabia and would sit astride about 50 percent of the world's oil reserves, which he could control directly when you add up Kuwaiti, Saudi, and Iraqi oil reserves. He'd be able to dominate the rest of the reserves in the Persian Gulf. And he'd have nuclear weapons. We had to stop this from happening. And we did.
We did exactly what we set out to do in Desert Storm. We liberated Kuwait, and we destroyed Saddam's offensive capability. Those were the two objectives we talked about repeatedly in the run-up to the war, and once we achieved those objectives, we stopped operations.
P.R.: What were President Bush's most important contributions to this victory?
Cheney: The president laid out the broad strategy. He took a personal hand in organizing the international coalition that gave us political and military support. He managed the Soviet account. He worked with the United Nations and the major Arab leaders who sent troops to fight alongside U.S. forces. He gave the Defense Department clear direction in terms of the objectives. Then he let us fight the war and refrained from micromanaging the military campaign.
He also deserves credit for having the courage to avoid some of the mistakes that Lyndon Johnson committed in Vietnam. When I told him we wanted to call up a quarter of a million reservists, he never hesitated. He said, "Do it." When we said we needed to put a "stop-loss" order in effect so that everybody currently in the military would stay in for the duration, he said, "Do it." He consistently gave us the kind of political support that we needed to use military force to maximum advantage. That's one of the reasons we were so successful.
P.R.: By contrast, how would you evaluate President Clinton's handling of the conflict in Bosnia?
Cheney: I've been very nervous watching President Clinton deal with the Bosnian conflict. This has been his first test in foreign policy. He has finally decided, at least as of today, to refrain from a major additional commitment of U.S. military forces. That's the right answer in Bosnia. Yet, it was painful to watch him get there. Our allies have been very worried that he did not seem to know what he wanted to do, that he's been all over the lot. First he was aggressive, then he backed off. He talked a bold game during the campaign. Now he's reconsidered his position. The reconsideration has been sound, but the way he's managed it has created some problems for our major allies. This is their first experience with Bill Clinton, and I don't think it's been a reassuring one. But he's new and green, and maybe he's learned from it.
I don't think that advocates of U.S. military force to end the bloodshed in Bosnia have properly considered what would be entailed. Before you commit U.S. forces, there are certain questions you need to be able to answer. You need an objective that you can define in military terms. Our military knows how to liberate a country, destroy a navy, take down an air force; those are militarily achievable objectives. But if you say, "Go in and stop the bloodshed in Bosnia," that's not sufficiently clear to build a mission around. Does that mean you're going to put a U.S. soldier between every Bosnian Serb and Bosnian Muslim?
A second requirement is to specify rules of engagement. The soldier or marine in the trenches needs ground rules -- what we call "rules of engagement" -- about how he is to achieve his mission. Whom does he shoot? How much force can he use, and under what circumstances? That's very difficult to define in this nebulous kind of civil war that's been raging in Bosnia. Who's the enemy? And how do you tell the good guys from the bad guys? Is this a three-sided conflict among Serb, Muslim, and Croat, or a two-sided conflict between Muslim and Serb? That's never been very well defined.
You also need to know what constitutes victory. How would you define it? How would you know when you had achieved it? And finally, how do you get out? What's the end game? How do you wrap it all up? And what's the cost in terms of American lives in that involvement? Nobody answered these questions with respect to Bosnia.
Is there any reason to expect that an age-old conflict based on animosities that go back for hundreds of years is going to be ameliorated or ended by the temporary presence of U.S. military force? I don't think so. And for all of those reasons, I was, and still am, very reluctant to see us rely on U.S. forces to solve Bosnia's problems. I am afraid we would have an ill-defined mission, we would take significant casualties, and would get involved without knowing how we were going to get out.
P.R.: You got out of Iraq without going all the way to Baghdad. Are you worried that Saddam Hussein is still in power today?
Cheney: I'd rather he were not in power, but I don't see him at this point as a threat to any of his neighbors. In that part of the world, I'm more concerned about Iran. Saddam is unable to sell oil; without selling oil, he can't generate the revenue he needs to rebuild that military machine we destroyed. The Iranians aren't faced with that situation; they have access to the world's markets, they are selling oil, and they are using some of that revenue to regenerate their forces and expand their capabilities. For example, they're buying diesel-powered submarines and MiG-29s from the Russians.
Long term, we have to be concerned about both Iran and Iraq. The Gulf is going to be an area of vital interest to the United States for at least a hundred years. We have to remain actively involved there -- supporting our friends in the region, trying to promote stability, and responding to threats whenever they arise.
P.R.: Could America win a campaign such as Desert Storm with the defense cuts that Bill Clinton is pushing?
Cheney: The cuts proposed by President Clinton are dangerous. Could we win another Desert Storm after them? I think so, but I don't think we could do it as effectively as we did in 1990 and 1991. The cost and casualties would be higher. It would take us longer to respond to a crisis and to finish the job.
We saw in 1980 the problems that arise when the U.S. doesn't maintain ready forces in peacetime. Remember Desert One, when we weren't able to mount a successful rescue operation to get our hostages out of the embassy in Teheran: we had equipment failures, we had an accident when two aircraft collided in the desert, eight people were killed, and the whole mission had to be aborted. Now compare this with Desert Shield in 1990. From the time the president said, "Go," it took us only 14 hours to send the First Tactical Fighter Wing from Langley Air Force Base in Virginia to Saudi Arabia. Ten years before, in 1980, that same unit flunked its operational readiness exam; 47 out of the 72 aircraft were grounded for lack of spare parts.
That's what will happen again if the Clinton defense cuts are ultimately approved. We'll end up with a force that's not ready to deploy on short notice, that's not capable of carrying out the missions we assign it. It's the kind of force that would cause us to suffer much higher casualties than necessary in the next conflict because we didn't maintain adequate peacetime capability. That's the real danger of the Clinton budget cuts. For example, freezing the pay of the troops, as President Clinton has proposed, will ultimately have an impact on the quality of the people we can retain in the force. And as the quality of the people goes down, so will their performance in the next war.
P.R.: You have argued that America demobilized too hastily after victory in World War I and World War II. What difference does the end of the Cold War make for America's defense requirements? Which threats to our security are mostly over? Which ones remain?
Cheney: The end of the Cold War has allowed us to change our defense strategy dramatically. We have moved away from the old strategy of containment and the forces that were required to pursue that strategy. We no longer face a wartime scenario of a massive, all-out, Soviet-led Warsaw Pact attack on Western Europe of upwards of 100 divisions that would begin on short notice, would start from the inter-German border and would probably require us to use nuclear weapons to stop it. We no longer have to be prepared to fight that sort of all-out global war with the Soviets.
Consequently, we no longer need to field 10 divisions in Europe within 10 days of a decision to mobilize, or to have forward deployed nearly five divisions in Europe. The Navy can become smaller, because the Soviet navy is rusting at the docks. We've been able to take down our land-based battlefield nuclear weapons from Europe and our tactical nuclear weapons off our ships at sea and substantially reduce our strategic nuclear forces as well. All of those things are a direct result of the end of the Cold War and the actions we initiated in the Bush administration. And they've all, for the most part, been accomplished.
What we need now, as we proposed during my time in the Pentagon, is sufficient force to be able to deter or defeat an adversary who would try to dominate a region of the world that's vital to U.S. interests. The best example of that, of course, would be preventing Saddam Hussein from taking control of the Persian Gulf and the world supply of oil.
P.R.: What are our interests in Russia today, and how can U.S. policy promote them? Can direct financial aid from the West make much of a difference in Russia?
Cheney: In Russia, our interests clearly lie in supporting political and economic reform efforts aimed at building a democratic society based on principles similar to our own. A democratically governed Russia is not going to be the threat to its neighbors and to the rest of the world that the old Soviet Union was. We ought to do everything we can to try to support these reform efforts, keeping in mind that there's a limit to what we can do until the Russians make some very fundamental changes themselves. Massive economic assistance is not going to be helpful, for example, unless the Russians take control of monetary policy, stabilize the ruble, and take other steps to make it possible for them to use our assistance effectively.
P.R.: President Clinton wants to slash the SDI budget by some 40 percent from the level President Bush recommended for fiscal year 1994. What role for missile defenses do you see in the coming decade, and do you think this can be achieved with the Clinton administration's budgets?
Cheney: It's a big mistake to slash the SDI budget. The Clinton administration says it inherited the 1983 concept of SDI, and that's just dead wrong. It inherited the 1990 concept of SDI, which was dramatically different, which was built after the end of the Cold War and put together after a dramatic change in the Soviet military posture. It specifically had been geared down so that we were focusing on limited strikes, not on a massive, all-out Soviet assault on the U.S. with ballistic missiles. That had already been done, before the Clinton people ever arrived on the scene.
The Clinton administration is now taking steps that may cripple the program. One of our biggest needs as a nation is to be able to defend ourselves and our forces forward-deployed overseas against ballistic missiles. SDI is the program to do that. It was Ronald Reagan's dream, and I think he was correct when he gave it a major push back in 1983. I think we have the capacity to solve all the problems connected with it and to actually deploy strategic defenses. And at a time when the problem of proliferation of weapons of mass destruction and ballistic missiles is growing around the world, it's not a time for us to scale back our efforts to develop that capability.
SDI can also play a significant role in discouraging proliferation. A number of our major allies have the capacity to build ballistic missiles and nuclear weapons. One way to discourage that is to make sure they understand that we have the capacity to defend against missile attack, and to extend that defense to them, so there's no need for them to add to the proliferation problem by developing their own nuclear weapons.
Some of the most exciting research and development in the country in recent years has been in SDI. The potential commercial spinoffs from there have been significant.
P.R.: Do you agree with the Republican platform's opposition to women in combat?
Cheney: Well, let me state my own position. I think that the ban on women serving in infantry, armor, and artillery units is appropriate and ought to stay in place. The physical requirements are sufficiently difficult, and the physical differences between men and women are sufficiently great, that the capabilities of these units would be degraded if women were incorporated into them.
I think that some billets in the Air Force can be opened up, though there shouldn't be any relaxation of the physical standards. Winning a slot as a fighter pilot in the Air Force is extremely competitive, and ought to remain so in accordance with the same standards that have always been there. If some women can successfully compete for those positions, I wouldn't have any objection to their filling those billets. There shouldn't be any quota for how many women will have assignments there.
In all of these cases, the appropriate standard is: How will a proposed policy affect the ability of the unit to function in combat? We should not include women or anyone else if their presence would hurt performance in combat.
P.R.: You were first elected to Congress in 1978, with Jimmy Carter in the White House and the Democrats in control of both Houses of Congress. Within two years, liberalism and the Democratic Party went down to crushing defeat in the Reagan landslide. In preparing for future victories, can the GOP draw any lessons from the experience of Republicans in Congress in the late 1970s?
Cheney: Two of my most enjoyable years in public life were those first two years in Congress. Maybe it was because I was a brand new member of the House, and I was excited about being elected for the first time. But it also was because Republicans were able to draw some very stark contrasts between what we stood for and what the Democrats stood for in the Carter years. We used the period out of power in the late '70s to get our own act together, which we needed to do. We went back to Republican basics: lower taxes, smaller government, free enterprise, a strong national defense. This laid the groundwork for that tremendous Reagan victory of 1980, when we also captured control of the Senate and significantly enhanced our numbers in the House.
P.R.: What are the most important issues for Republicans to emphasize in the congressional elections of 1994 and the presidential and congressional elections of 1996?
Cheney: We should go back to the issues that have worked well in the past. The American people want greater confidence in their government, which they generally believe hasn't been working very effectively. This gives Republicans a tremendous opportunity to emphasize our traditional view that government is best when it governs least. We need to reaffirm our fundamental commitment to freedom and democracy and individual liberty and the genius of the free-enterprise system. We have to aggressively take on the Clinton administration over tax policy. By advocating massive tax increases, the Clintons have done us the great favor of giving us back the tax issue.
National security and defense may conceivably be important issues, too. This will depend to some extent on external events. But certainly we ought to run aggressively on the platform that America is the world's only superpower, and we have to maintain our military strength. The Clinton program does not do that. The Clinton administration is seriously undermining the quality and morale of our armed forces. There is now the distinct possibility that the next time we have to use the force, the military won't be able to perform as it should because of the way it's being treated under the Clinton administration.
P.R.: What priority do you give to each of these objectives in budget policy: preventing tax increases, sharply cutting the deficit, cutting capital-gains taxes, providing tax relief for families with children, and reducing federal spending as a proportion of national income?
Cheney: The first obligation of the federal government is to maintain the nation's security. With the end of the Cold War, we can do this with fewer resources than were necessary before. We would have been able to do it under the Bush program for about 3.5 percent of GNP, which is less as a percentage of GNP than we've had to spend on defense since before Pearl Harbor. This is more than President Clinton wants to spend, but it's much less than the 6 percent of GNP we spent at the height of the Cold War.
The second most important goal in budget policy is to promote economic growth. Almost every other goal -- reducing the deficit, promoting opportunity, maintaining the peace -- ultimately depends on whether we have sustained economic growth of the kind that we had during the Reagan years. If economic growth is our foremost economic objective, then it is important to work for a capital-gains tax cut. Reducing the cost of capital will expand investment and job creation and opportunity. Promoting economic growth also requires not allowing government to grow relative to the total size of the economy.
I would cancel all of the Clinton tax increases. Raising taxes flies directly in the face of our efforts to expand the economy. I can't think of a single instance in history when a major tax increase has ever led to economic prosperity. So I would hold the line on taxes.
With respect to deficit reduction, the emphasis has to be on spending cuts. You can cut the size of government, cut the number of people employed in the federal government, and cut the amount of money government spends. I know, because we did it in the Defense Department in the four years I was there: we closed some 800 bases and installations worldwide, and eliminated 400,000 positions out of the Department of Defense. We could similarly cut domestic spending if we went at it aggressively. We could make progress on the deficit simply by cancelling the $ 152-billion increase in new domestic spending that Clinton wants.
P.R.: Conventional wisdom has it that Republicans lost the "family values" debate in 1992. Is this a battle worth fighting? And if so, what are the most important family and cultural issues for Republicans to emphasize?
Cheney: Values are important. They are an inherent part of the debate about where we want to take the country in the years ahead. But it's important to handle values in a way that does not convey an attitude of intolerance. The Democrats are likely to do everything they can to portray Republicans as intolerant of others, and when that happens, we lose the edge in the debate, as we did in '92. We have to find ways to talk about values that are inclusive, and are seen as generous and enlightening. We cannot let ourselves be perceived as having a message of hate or lack of respect for those who differ with our views.
P.R.: Ross Perot won 26 percent of the vote in Wyoming, with much of it coming from Republicans and GOP-leaning independents. Why were so many people in Wyoming attracted to Perot, and what most Republicans do to win back their confidence?
Cheney: I'm still puzzled by the Perot vote. I'm not sure how much of it was based on an attraction to Mr. Perot, and how much was a protest vote based on unhappiness with President Bush and then-Governor Clinton. But Mr. Perot was saying some things that were very appealing to people of Wyoming -- my voters, my constituents; they elected me six times.
The people in Wyoming are frustrated with the size and cost of government. They sense that it doesn't work very well. Mr. Perot was able to capture a lot of their frustration with his rhetoric. I'm not certain he could have done anything about it if he had gotten elected. But he was able to articulate a view with wide appeal in a state like Wyoming, where we look askance at big government, believe deeply in a low-tax philosophy, and think that the deficit is a serious problem that we need to get under control.
Republicans will win back Perot voters if we can persuade the public that we offer the best prospect of reducing the size of government in a way consistent with the conservative view of the world held by most Americans. It's a matter of establishing our own credibility and our commitment to those principles that made us the majority throughout the 1980s.
P.R.: Black Americans have found more advancement opportunities in the military than in any other sector of society. What lessons do you see here for domestic policy in terms of providing greater opportunities for blacks and other minorities?
Cheney: I don't think there's any question that the military has offered great opportunities for blacks and other minorities, in terms of upward mobility. The military runs on merit. You have to meet very clear standards in order to advance, and you are judged not on the color of your skin, but on how well you meet those standards. I wish the rest of the society would work in the same way; I can't say that it does. Over the years I think the military has benefited from the perception that it offers equal opportunities to minorities in a society where there are still vestiges of discrimination. The military has become a magnet for those who want to advance themselves, and so it has been able to attract the best and the brightest.
P.R.: You worked as a price controller for President Richard Nixon.
Cheney: A terrible experience.
P.R.: What did this experience teach you about price controls, say, in health care?
Cheney: Early in my career -- 1971 to early '73 -- I worked on the Cost of Living Council, and during much of that period I was assistant director for operations. I oversaw 3,000 IRS agents in their efforts to enforce wage-price controls. It demonstrated conclusively, if any demonstration was needed, the foolishness of a central bureaucracy in Washington trying to control something as complex as the American economy, in terms of setting wages and prices and profit margins for every enterprise and man and woman and child in the country. Proposing wage and price controls was one of President Nixon's biggest mistakes. And the notion now that the Clintons are talking about -- some system of price controls as an integral part of their health-reform package -- is a grave cause for concern. Nobody's smart enough to write the regulations to do, by fiat, what we're able to do by letting the marketplace work.
One of the problems with wage and price controls is that economic decisions suddenly become political decisions. People perceive that policy-makers are making decisions about wages and prices, so they rush in to lobby the policy-makers. Then the politicians get involved. Imposing controls politicizes what should be a non-political or economic process -- the allocation of resources in the economy. One of the worst consequences is that the entrepreneur spends all of his time trying to figure out how to manipulate the controls in order to make a profit instead of trying to figure out how to build a better mousetrap and outcompete his competitors.
Let me just comment on the whole health-care debate.
Nobody's seen the Clinton's final proposal, but I don't buy the argument that we have the world's worst health-care system. We have the world's best health-care system. It's not perfect, but it is a tremendous success story for this country.
The medical profession and drug industry have dramatically improved the lives of all of us. Go back 30 and 40 years, when we had no effective medication for controlling blood pressure or lowering cholesterol levels, and no effective vaccine against polio. Now we do, plus much, much more. America's pharmaceuticals industry is one of the most dynamic, technology-driven, industrial sectors anyplace in the world, and the Clintons have gone out of their way to trash it.
We also keep hearing about the 37 million Americans who don't have health insurance. Not having health insurance, though, doesn't mean you don't get health care. It means you go to the emergency room, and the rest of us pay for it through our own insurance rates. I remember a time when I didn't have any health insurance, either. I couldn't afford it, but I also was young enough so that I didn't think that I really needed it.
We need to look at what the health care system currently is able to provide before we tear it down. I'm worried that we're embarked upon a course where the 90 percent of the system that works very well is going to be destroyed in order to do something supposedly to fix the 10 percent that needs to be fixed. And I don't hear anybody in the administration arguing the merits of the existing system, pointing out its enormous successes, pointing out that, for the vast majority of Americans, we have a higher standard of health care than any other society in the world.
P.R.: About half the surface area, and three-quarters of the energy and mineral resources of Wyoming are owned by the federal government. Are there ways to strengthen the economy of Wyoming, without hurting environmental protection, by giving commercial interests greater access to these resources?
Cheney: My frustration as Wyoming's lone congressman was that my friends in New York and California thought they knew better than we did about how we ought to manage our affairs in the state, when in fact we'd done a far better job than they had in preserving our environmental resources and quality of life. That's why so many of them keep trying to buy ranches in Wyoming.
An awful lot of the appeal of Wyoming depends on preserving its tremendous environmental assets. I was pleased as congressman to sponsor legislation that added almost a million additional acres to wilderness. It was good legislation, and those lands ought to be protected. But we also have to develop prudently those resources that are necessary for economic growth and development. And I think we've done that pretty well in Wyoming.
Wyoming is the nation's leading coal producer now, and most of that coal comes from public lands. It's in everybody's interest that this coal be mined. It's low-sulfur, so it contributes to cleaning up the environment, and it produces jobs, revenue, and energy. And we're able to mine it in a safe and sound manner from an environmental standpoint -- we have tough reclamation standards, and we reclaim the land almost as soon as it's mined. It's a mistake to treat environmental protection and economic development as a zero-sum game. The way we mine Wyoming coal is good for both the economy and the environment.
P.R.: More generally, how would you lower the costs of environmental regulation without hurting environmental quality?
Cheney: A significant portion of the regulatory cost comes from trying to get that last 2 or 3 percent of improvement in the environment, so we might be able to get some savings there. We should also look for ways to let the marketplace provide incentives for people who want to do the right thing.
I've always been attracted to the idea of allowing people to buy and sell emission credits. This has been started in the 1990 Clean Air Act. If you let the marketplace work, people will be amazingly creative in finding ways to make changes that are environmentally sound and, at the same time, economically sustainable and supportable. For this to work, government needs to resist the temptation to spell out exactly or precisely the manner in which the cleanup needs to be achieved.
P.R.: Who are your heroes?
Cheney: I'd start with my parents. They have embodied the old-fashioned virtues of hard work and deep religious convictions and a fundamental faith in America. They have dedicated themselves to doing everything they can to create opportunities for their children, to pass on their inheritance to their children and grandchildren in better shape than they found it. They have never been flashy, but have lived courageously.