Many Americans have long suspected that Capitol Hill was for sale, but it took the Clinton administration to put a price tag on it.
Selling the Capitol Building was one of several options listed by Treasury Department officials last spring as a way to stave off default on the national debt. Other measures considered by the administration included dipping into the Social Security trust fund and selling gold and other stockpiled commodities.Confidential documents, obtained by our associate Ed Henry, reveal that the administration had contingency plans to prevent default as far back as last April. That suggests that the doomsday warn-ings of default issued by administration officials last fall were part of a political ploy to force the Republicans' hand on the budget.
With another showdown over the debt limit looming at the end of the month, the documents also raise questions about the credibility of White House Chief of Staff Leon Panetta and Treasury Secretary Robert Rubin. Several Republicans have already called for Rubin's impeachment since he disinvested two government trust funds to prevent a default.
The documents, however, punch a hole in the GOP's contention that Rubin acted illegally last November by tapping the trust funds. Treasury and Justice Department officials found legal precedents giving Rubin the authority to do so. But the documents show that Rubin knew this fact well before he told the public.
A Sept. 25 memo to Rubin from General Counsel Edward S. Knight indicates the secretary was informed that 19 lawyers from the departments of Treasury and Justice were working to avoid default.
An April 20 memo written by Treasury official Darcy Bradbury outlined several ways to avoid a default. One of the memo's nine options was the action that Rubin eventually took. Among the options not utilized was one that called for selling off "government assets such as the Capitol Building."
Nevertheless, between April and November the administration rattled the markets with alarmist rhetoric about how failure to increase the $4.9 trillion debt ceiling would wreck the economy.
The notes of another Treasury official who attended a high-level meeting on the debt limit hint at why the issue was exploited. In an apparent reference to the opportunity for political gains, the official noted: "tactically - debt limit best opp . . . Must be patient."
An Oct. 20 memo says that Treasury had set up a task force that was in part helping to develop "political strategies during a debt limit impasse."
Bradbury also wrote a June 27 memo outlining a precise strategy for avoiding default. Under "Scenario I" in a related memo, Rubin would "redeem $36 billion securities from (the Civilian Service Retirement Fund)" on Nov. 13. As it turns out, Rubin redeemed $39.8 billion from that same fund on Nov. 15 - just two days after the memo's prediction.
A spokesman told us Rubin did not see the April memo, but he did see the June memo. He added that the options were presented "to put them on the secretary's radar screen. But none of them had been vetted by the attorneys."
When asked if Panetta's rhetoric was disingenuous, his spokesman said: "I'll tell you what disingenuous is. It's Republicans bringing us to the brink of a crisis and then complaining when the administration prevents the crisis from happening."