Interview With Sam Donaldson of ABC News

North Korea

Mr. Donaldson. Mr. President, thank you very much for the interview. A lot of people have suggested that if North Korea can't be brought to reason and other nations such as China and Russia don't support tough sanctions, that the United States ought to impose them unilaterally. Do you agree?

The President. Let me first say that the American people need to understand what's at stake here. They agreed not to become a nuclear power. They have honored the testing requirements for what they've done since I've been in office. But they still haven't allowed us to test for what they did in 1989. Under those circumstances, I don't think we have any choice but to go to the United Nations for sanctions. I have talked with President Yeltsin, along with Prime Minister Major and the new Prime Minister of Italy, Mr. Berlusconi. I'm going to see the French leaders the day after tomorrow. We are in touch with the Chinese.

I believe there is a general sense in the world community that we have to go forward with a sanctions resolution in the United Nations. I don't want to say what I'll do if we lose there because I'm not prepared to say we will lose there. I think most people know and believe that the North Koreans should cooperate on this. After all, they promised to do it. We're just asking them to keep their word.

Mr. Donaldson. I understand, sir, but Secretary Perry suggested today that in fact the United States would do it alone if it had to.

The President. Well, there is—we would not have to go it alone. The real question is could we have what has been called a coalition of the willing that included as many nations as would observe the sanctions as possible? The answer to that is we would certainly consider that if we failed at the United Nations. But keep in mind, China and Russia have both moved toward the West. And both have interests like Japan's, South Korea's, and the United States. None of us wish North Korea to be a nuclear power. And all of us know they promised they wouldn't be one. All of us know they still deal with other rogue states who support terrorists. And we don't think this is a very good trend. So I think we'll work together. I predict to you that we'll work out a common course. And of course what I hope is that the North Koreans will turn away and come back to us.

Mr. Donaldson. Senator Dole said yesterday that North Korea's bluffing, he believes, when it says that it would invade the South if tough sanctions are imposed. Do you think they're bluffing?

The President. I don't think that they would risk the certain terrible defeat and destruction that would occur if they did that. But we can't afford to assume anything. That is, what I have tried to do is to make sure our people are well prepared and well disciplined for all eventualities, as they have been, I think, throughout their presence in Korea.

General Luck asked me for some extra support, and we've provided that. And I'm confident we're there, prepared to do our job. But I don't want any war talk. I want this to be about peace talk. What happens in North Korea and to North Korea is a function of what North Korea does, not the rest of us.

Mr. Donaldson. I understand, sir, that you don't want any war talk, but to put it very bluntly, I think a lot of people want to know whether the Clinton administration will back down if push comes to shove.

The President. No, the answer to that is no. The answer is we are in South Korea. We have a solemn commitment to them. They are our allies. They are certainly prepared to go forward in the United Nations; so are we.

Senator Dole says they're bluffing when they consider sanctions to be an act of war; I think that may be the opinion most people have. But nonetheless, we are going to be extra prepared. We want to do what we can to do our mission and to protect the American troops there as much as possible. I just don't want to raise any red flags of fear. We need to be very firm, very resolute, and go forward.

I'm talking to the other world leaders about it. I think we will go forward.

The Economy

Mr. Donaldson. Mr. President, Bob Woodward's coming out with a book in which he says that Alan Greenspan, the Chairman of the Fed, has been sort of a teacher to you and in fact has swayed you from your original campaign commitments in a populist sense. Is that right?

The President. No. But it is true that I've had probably a more candid relationship with Mr. Greenspan than previous Presidents. That's because I believed very strongly that unless we got interest rates down last year we couldn't spur this economy. I think in general our economic plan, our process for developing the plan was a good one. The decisions we made were right. I think that there is no better populism than producing 3.36 millions jobs in 16 months. I think we've done a pretty good job.

And I talked with Mr. Greenspan extensively without asking him to promise me what he was going to do, because I wanted to get a feel for how the Fed looked at this. What we wanted to do was get the deficit down, get interest rates down, cut spending, but increase investment in education and training and new technologies. We have done that.

Mr. Donaldson. Interest rates did come down, but now long-term interest rates are about where they were when your Presidency began. And short-term rates are being jacked up by the Fed.

The President. But why? Why are they going up? They're going up this time because there is robust growth in the economy, because jobs are being created, because, to quote the Fed, they want "short-term interest rates to be a neutral position," that is, neither promoting growth nor retarding it, so that the natural growth of the economy can take place. And the Fed announced the last time they raised rates that they—implicitly they said they weren't going to do it for a while. And if they don't do it for a while, the economy will continue to grow.

Mr. Donaldson. So it would suit you if we've seen the last hike in short-term interest rates this year?

The President. In the absence of evidence of inflation, yes. There is no compelling evidence that there's a lot of long-term inflation on the horizon. We have good growth in the economy. The strategy is working; we're creating jobs. That's the only thing that matters. Are the American people going back to work? Are we turning the economy around? The answer to that is yes.

Mr. Donaldson. But you know, I think a lot of people don't understand that when employment rises and when growth is pretty good, the bond market goes nuts. Does that make any sense?

The President. It hasn't been an entirely rational policy. And I'm not sure that people who fix the interest rates the Government charges weren't surprised a little by what the bond market has done. Keep in mind, we can't be governed by the momentary trends in the bond market or the stock market to a lesser extent because they move for reasons that may not be tied to the real economy.

I can remember times, if you go back to the eighties and the early nineties, where the stock market would go up and the bond market would go up and the economy would go down. And what we want is, we want a healthy stock market, we want a healthy bond market, that is, strong bond prices, low interest rates, but we really want a healthy real economy. We want it on Main Street. We want people working. Right now, the Main Street economy is coming back. That's the economy that I wanted to change as President.

Virginia Senatorial Campaign

Mr. Donaldson. Let me move on to another topic. Colonel Oliver North was nominated yesterday in Virginia by the Republicans. Is it going to be a tough race for Senator Robb? What do you think?

The President. Well, I expect so. Colonel North represents a clear choice for the people of Virginia and the clear triumph for the radical right. They have been working to try to take over, first, the Republican Party and, second, this country, pretty hard now for 15 years. They've been up; they've been down. They're up again right now. And they represent a dramatic break there. They can raise a lot of money. They will stop at nothing. They will say anything. I know; I'm probably the prime recipient of their venom. And my guess is that the people of Virginia, once they see what their stark choices are, will choose Senator Robb. He distinguished himself as a Marine Corps officer in combat, in peacetime. He was a good Governor. He's been a good Senator. I believe he will prevail.

D-Day Commemoration

Mr. Donaldson. All right. Let me move now to D-Day. Mr. President, I was here 10 years ago when Ronald Reagan gave all those wonderful speeches and brought tears to everyone's eyes. Now, that's a tough act to follow. Are you going to be able to follow it?

The President. I don't think of it that way. What I have tried to do is to speak for the American people on this occasion. I worked hard to learn as much as I could about it, to talk to many veterans, to talk to people who actually came out of those landing craft and poured onto the beaches. And I'm going to do my best to speak for America. My job is to do the very best I can in the moment that I am President with this responsibility. I can't think about what anybody else did. I was moved by what he said. And I hope that I will capture the moment for America.

Vietnam War

Mr. Donaldson. Sir, you know that there are going to be a lot of people out there who resent the fact that you didn't serve and particularly because they believe you made a deliberate effort to avoid service. What would you say to them?

The President. Well, I can't add much to what I said in the campaign and much to what the evidence shows. I did feel ambivalence. I also at one time made an attempt, as you know, to get back into the draft, but that's not the important thing. I can't change the fact that I was opposed to our involvement in Vietnam. I still think on balance it did more harm than good even though we were well motivated. But we can't rewrite history. You can only live in the time and place that you are. And I am doing my best to do a good job and to be faithful to my duties as Commander in Chief. I have worked hard at it. I have aggressively sought out the best opinions I could get in the military. And I work at it every day.

I must say I've been very touched by the World War II veterans who in such large numbers—particularly when I was in Italy, had the chance to spend a couple hours with them— said that they were supporting me. And these young men here said the same thing. I have to do my job now. I can't be encumbered by what other people think about that.

Mr. Donaldson. Mr. President, my time is up. I thank you for the interview. Rick Kaplan wanted me to ask a number of mean questions, and I want the record to show that I refrained from doing so. [Laughter]

The President. You tell Rick not to discipline you too hard. [Laughter]

Mr. Donaldson. Thank you very much, sir.

The President. Thanks.