Shepard was an original member of the Domestic Council, joining the staff in August, 1970, and becoming Associate Director for General Government in November, 1972—a position he held under both Presidents Nixon and Ford.
The Domestic Council is the counter-part to the National Security Council, but focuses on policy analysis and implementation on domestic issues of concern to the President. These two organizations, along with the Office of Management and Budget (OMB), consolidated the policy making apparatus of the Executive Branch into the Executive Office of the President—and form the foundation for the modern presidency.
This is an essay Shepard wrote, in April, 2006, on the creation of the Domestic Council and OMB through Reorganization Plan Number 2 of 1970:
The President’s chief function is to lead . . .
not to oversee every detail, but to put the
right people in charge,
to provide them with the basic guidance and direction
and to let them do the job.
—Richard M. Nixon
The Nixon administration consisted largely of outsiders who were new to the federal government and unfamiliar with the established power structures of the liberal Northeast. Many were Californians—and the whole administration was startlingly different from what the Georgetown cocktail circuit had grown accustomed to under Democratic administrations. When Nixon took office, Democrats had controlled the White House for all but two of the previous nine administrations—and both houses of the Congress for all but four of those years. It was only Eisenhower who had interrupted their unbroken string of election victories. Being a career military officer and only first becoming politically active in his 1952 run for the presidency, Eisenhower was largely apolitical, though his vice president, that fierce partisan Dick Nixon, decidedly was not.
Nixon and the people he brought with him were viewed by the more permanent Washington establishment as but a tenuous beachhead on their shores. The Nixon administration had to fight for influence against Democratic dominance—of Congress and its committee staffs; federal bureaucrats who were the career civil servants in the executive branch; the establishment press; and all of the city’s law firms, think tanks, and consulting organizations. But in having to take on Washington’s entrenched power structure, Nixon was not without resources, perhaps the greatest of which was his previous experience as Eisenhower’s vice president
When he was elected president, Nixon was no newcomer to the scene; he brought with him detailed knowledge of and experience in bureaucratic infighting in certain key federal agencies that were largely used to being unchallenged and left alone: the CIA, the FBI, and the IRS. He had held federal office for fourteen years, from 1946 to 1960, and been vice president for eight of them. He had also had eight years of enforced retirement to think through issues he had grappled with and observe how the Kennedy and Johnson administrations approached them. On balance, Nixon may have been the best-prepared president since James Madison. Among the complicating factors for his administration, though, were that Nixon was the first highly partisan Republican president since Herbert Hoover, and he harbored deep resentment over the circumstances surrounding his 1960 loss to Jack Kennedy.
Senator Kennedy was neither a statesman nor a scholar; he was a playboy, a son of one of the richest men in America. His father Joseph Kennedy had made his money as a bootlegger during Prohibition, and in that unique way that money can buy power and prestige, during the Depression he had been named head of the new Securities and Exchange Commission, and then US Ambassador to the Court of St. James. He had sent his sons to Harvard and they were now the epitome of success in the Eastern liberal establishment. Nixon brought with him to his presidency an immense curiosity about a number of decisions the Kennedy administration had made on issues of foreign affairs, particularly those he became familiar with during his term as vice president. They included the Cuban invasion that led to the Bay of Pigs disaster, possible CIA-funded attempts on Castro’s life, trade-offs involving our own missiles in Turkey during the Cuban Missile Crisis, and any United States involvement or complicity there may have been in the assassination of President Diem of Vietnam. As the prospect of his running for president again began to take hold, Nixon focused on what he would do differently should he ever regain power. His main conclusion was that to have any lasting impact, he would have to set policy for the essential functions of the executive branch from the White House itself.
When he gained office, Nixon appointed an impressive group to his cabinet, but his choices had been influenced by the fact that the Republicans had not carried the Senate, so his nominees would be subject to confirmation by his political adversaries. As a result, those he selected for the cabinet were good Republicans in the main, but not particularly loyal to Nixon himself. What did with regard to his own White House Staff, none of whom had to face any confirmation battles, was quite unprecedented: For his top three policy advisors, he did not do the conventional thing and appoint people who had supported him in his campaign; he chose people who were absolutely outstanding in their respective fields:
- Henry Kissinger, the Harvard professor of international relations Nixon picked to head his National Security Council, had long been a member of Governor Nelson Rockefeller’s inner circle of advisors—hence, from an opposite wing of the Republican Party. You would be hard-pressed to find a group within the Republican Party that was less in step with the Nixon wing than those beholden to Nixon’s primary competitor, Governor Rockefeller.
- Arthur Burns, the president of Columbia University, was made counselor to the president, a cabinet-level position. While certainly conservative, Burns was much older, associated with the Eisenhower wing of the party, and had not campaigned for Nixon. He did, however, provide a counterweight to Nixon’s other choice for domestic issues.
- Daniel Patrick Moynihan, also a Harvard professor, was the biggest surprise: He was not only a liberal Democrat, he had actually campaigned against Nixon’s election, and was opposed to the Vietnam War. He had also served in both the Kennedy and Johnson administrations. Nonetheless, he had come from humble beginnings, like Nixon, and had attractive ideas on welfare reform. He agreed to head the Urban Affairs Council, Nixon’s first attempt to copy the National Security Council model for the resolution of domestic policy issues.
Of course there were many on the staff from Nixon’s 1968 campaign, mainly reporting to Bob Haldeman, but they were there to execute and effectuate presidential decisions, not to help make them in the first place. One of the more interesting things about politics—and life—is that those who helped get you there are often not the best ones to assist you once you have gotten there: Many folks whose expertise lies in the hurly burly of political campaigns are not the best equipped to actually govern, particularly at the federal level. And on-the-job training is not exactly recommended for senior executive positions in the government of the world’s most powerful nation.
When I arrived to start my job at the Nixon White House in September 1970, the senior team had already been assembled: Bob Haldeman, John Ehrlichman, and Henry Kissinger. But others, young but destined to become great, were also to be colleagues during my tenure: Don Rumsfeld, Dick Cheney, Paul O’Neill, Cap Weinberger, Jim Schlesinger, Bill Simon, Frank Zarb, and Frank Carlucci all served on Nixon’s staff, as did later media mavens including Pat Buchanan, John McLaughlin, Bill Safire, Diane Sawyer, and Ben Stein. Future business leaders such as Hank Paulson, CEO of Goldman-Sachs; and Tom Peters, author of In Search of Excellence were among dozens of young White House staffers who later rose to prominence in many fields. When I departed from the White House in March 1975, my responsibilities were taken over by another colleague, Dick Parsons, who is now CEO of Time-Warner.
Nixon viewed the conduct of foreign affairs as the highest calling of the American president—and one for which his own background and interests were ideally suited. The president also had far more freedom of movement in foreign affairs, granted by the Constitution, than he had in dealing with domestic issues. Nixon once said that domestic issues can largely take care of themselves; it’s in the field of foreign affairs where a president can have the most impact. The instrument of this impact, for him, was going to be the National Security Council. Created as was the CIA by the National Security Act of 1947, its policy-making apparatus and influence had fallen into disuse during the Kennedy and Johnson administrations. Building a strong NSC was high on Nixon’s agenda.
In 1970, Henry Kissinger was a brilliant, temperamental young Harvard professor—not the grand old man of foreign affairs we see today, and like Nixon, he was not to the manor born. Kissinger’s family had immigrated to the United States from Germany when he was thirteen. Whatever he’d accomplished was a result of his own initiative and hard work—without the assistance of family influence or position. From the day he was appointed head of the NSC until he went on to become secretary of state in August 1973, it seemed as if his main occupation was undercutting William Rogers, Nixon’s initial secretary of state (who had been attorney general under President Eisenhower). Their rivalry was quite public—especially since Kissinger could play the press like a violin—and our Fellows class even asked Rogers about it when we met with him in the spring of 1970. He assured us that it was ludicrous to think you could conduct foreign affairs from the White House:
“We get a thousand cables a day from all over the globe. Just keeping up with developments would be an all-consuming task for the NSC, if it were really in charge.”
If you think about it, his response was hardly persuasive; after all, if you were setting policy on foreign affairs, the number and c ontent of incoming cables would not be particularly significant.
I was introduced to Kissinger in early 1971 by John Ehrlichman, in the West Wing corridor just outside the Oval Office:
“Henry, you really should get to know Geoff here,” John told him, “since he is very close to [DC Police] Chief Jerry Wilson. Given your lifestyle, you may have to call upon him some day for help.”
At the time, of course, Henry was single and well known for dating prominent young women, so we all enjoyed a good chuckle.
As time progressed, Kissinger’s relationship with President Nixon became quite stormy. I think the best description of it can be found in the opening essay in The Nixon Presidency, published in 1996 by the Center for the Study of the Presidency. The article is entitled, “President Nixon’s Inner Circle of Advisers,” by Betty Glad and Michael Link. As they put it, Nixon was tiring of Kissinger’s constant harping on the shortcomings of Rogers at State. As Kissinger’s public stature increased, there mounting concern that his efforts to curry favor with the press were undermining the public perception of presidential leadership:
Sometimes Kissinger seemed to be posing as the reasonable statesman checking Nixon, “the mad bomber.” Kissinger’s egocentric November 1972 interview with an Italian journalist, in which he suggested he was the “lone ranger” of foreign policy-making, was especially galling.
About the time I arrived, the White House began to constrain Kissinger’s press relations; he was told not to discuss policy or “substance,” which was to be the prerogative of the president himself. When adverse leaks continued, Chuck Colson, counsel to the president, even arranged for a “pen register” on Kissinger’s phone (which recorded the numbers of outgoing calls). By the end of 1972, Kissinger’s collaboration with President Nixon had become rather tense; as soon as an armistice with North Vietnam could be achieved, Kissinger was expected to return to Harvard. Once Haldeman and Ehrlichman left in April of 1973, however, everything changed: Any thought of Kissinger also leaving would have had disastrous implications. So in August 1973, instead of returning to the academic life, Kissinger replaced his old enemy William Rogers as secretary of state.
Even before Nixon took office, the conduct of foreign affairs had changed dramatically from the model in which a given ambassador on site in some foreign nation would be the one making all the key decisions. As communications improved, the policy-making power had first been withdrawn from the field to the Department of State—and was now, under Nixon, well on its way to being consolidated in the White House: State and its ambassadors were relegated to the position of executing policy decisions; they had input, but they did not have the last word in setting policy.
In addition, the NSC had an interesting approach to finalizing and documenting presidential decisions on foreign affairs. They would prepare what were called NSCDMs (National Security Council Decision Memorandums), which documented all options and views so that presidential decisions could be made on paper. Two things were vital in making such foreign policy decisions, that the president get the benefit of all relevant points of view, including input on any given issue, not only from the NSC, but also from the Departments of State, Defense, and perhaps Treasury, the CIA, the National Security Agency, and the Foreign Affairs Advisory Council. Naturally, there might well be differences of opinion within each of these organizations as well. Second, it was equally important that the president’s decision itself be precise, well documented, and fully understood. NSCDMs fit this need perfectly, especially for someone with a legal background like Dick Nixon: They were in writing, and they gave background on the issue and why a decision needed to be made about it at the particular time. The president’s options were clearly indicated, and his decisions were not only preserved, they could be circulated, if need be, on a classified, need-to-know basis.
Things did not begin quite as swimmingly in the area of domestic affairs, especially in that first year. Nixon was the first president since Zachary Taylor (in 1848) to win the presidency without also having control of Congress. While Eisenhower’s election had come in tandem with Republican control of both houses of Congress (for the first time since Hoover’s demise during the Great Depression), control of both houses had reverted to the Democrats in the midterm elections of 1954. At least Eisenhower had a friendly Senate to get his initial cabinet, sub-cabinet, and other presidential appointees (including ambassadors) confirmed. Nixon never controlled either house of Congress during his entire administration. Equally frustrating, the Democratic majority both houses was of such size, and had been so for so long, that well over 80 percent of committee staff were also Democrats. Virtually everywhere outside the White House itself, the president was surrounded by folks who clearly did not agree with his point of view.
My own belief—that a president simply cannot govern without also having control of the Senate—was forged through experiences during the Nixon administration: Without Senate control, a president cannot get Senate confirmation of the nominees he needs in office to assert his control over the executive branch (cabinet and sub-cabinet); he cannot get ambassadors confirmed or treaties ratified for the conduct of foreign affairs; he cannot get judicial nominees confirmed; and he cannot even get hearings scheduled, much less votes counted, on any of his legislative initiatives. For example, all of Nixon’s nominations for the cabinet were announced at the same time in December 1968, even before he took office, but it was not until May 1969 that the last one was finally confirmed. It also would be nice to control the House of Representatives, of course, but it is not nearly as critical for a presidency as controlling the Senate.
In Nixon’s era, career federal bureaucrats were also overwhelmingly Democrats—and determinedly intent on carrying out the legislation enacted as a part of President Johnson’s Great Society, legislation that Nixon felt he had been elected to constrain. Perhaps as bad from Nixon’s point of view were the compromises he had had to make in the selection process of naming his cabinet, such that he could not count on his own cabinet for strong support in advancing his public policy initiatives (or retarding any of President Johnson’s).
If anything, it was worse in foreign affairs: America was a nation at war and the war was going badly. The Democratic Congress, which had essentially stood mute while presidents of their own party (that is, Kennedy and Johnson) dramatically escalated United States involvement in—and particularly troop commitment to—South Vietnam, now began to vigorously assert their interest in withdrawing. It was as though their responsibility for the war had ended with Nixon’s election.
Largely because of this—and his experience toward the end of the Eisenhower administration—Nixon knew that, because there were too many cooks in the kitchen, he had far less room to maneuver in domestic affairs. It’s not hard to see why he was disinclined to expend a great deal of personal energy and analysis in that area. Instead, his approach was to circle the wagons around the White House and make all policy decisions from within, decisions that would, in turn, be given to cabinet members and other appointees for subsequent execution. The difficulty within the White House, however, was that both domestic policy advisors, Arthur Burns and Pat Moynihan, quickly became engaged in a fierce ongoing struggle for the president’s domestic soul.
Nixon knew Arthur Burns, then chancellor of Columbia University, from their service together in the Eisenhower administration, and right after the 1968 election brought him to the Hotel Pierre in New York City to assist the transition team that was being assembled. Burns was joined by another Columbia professor, Martin Anderson, and they pulled together ideas for the president’s domestic programs. Burns’ titles were counselor to the president with cabinet rank, and head of the Council of Economic Advisors, positions he held until he became chairman of the Federal Reserve Board in January 1971. Burns brought on several other staff members whose work on domestic issues tended to reflect his more conservative point of view.
In contrast, Pat Moynihan, the enthusiastic and innovative idea man from Harvard, was made head of the Urban Affairs Council, the first attempt to build a counterpart to the National Security Council within the president’s own staff. Pat, too, grew up without family influence or position; his formative years were spent in Hell’s Kitchen, then one of New York City’s better-known slums. His ideas about welfare and urban affairs were forged from personal experience—not academic study. In addition, Pat was a charmer, full of the Irish blarney: The enduring image I have of him is, as someone once put it, you could be just walking down the street with Pat and he would have you convinced that the two of you were setting off on a great and noble adventure! Naturally, Pat brought along a selection of good Harvard men, and naturally, their answers to most domestic problems tended to start from the more liberal side of the ledger.
Burns and Moynihan were at such loggerheads that papers were researched and drafted, proposals were presented and debated—but there was never any issue resolution. Even in meetings involving the president, these two intellectual giants sat at opposite sides of the table rolling cannonballs toward each other. Burns’ and Moynihan’s first conflict, over welfare reform, spread to aid to cities, and immigration issues. Eventually, their discord permeated the entire realm of domestic policy.
After a time, John Ehrlichman was invited to attend some of the domestic policy sessions to determine if anything could be done to help achieve an effective process of issue resolution. His role became even more important—indeed critical—when the president, no longer willing to referee disputes in person, had begun to avoid the meetings entirely. It was Ehrlichman’s suggestion that the approach to making final determinations on domestic issues emulate the written process utilized by the NSC. In other words, domestic NSCDMs.
As the president’s lawyer, without a real ideological stake in the game, Ehrlichman would attempt to draft issue papers which would bring together in one place the background, alternatives, and possible options for presidential actions. The idea caught on—and was expanded to accommodate concurrent recommendations for modernizing the Bureau of the Budget, being drafted by the President’s Advisory Council on Executive Organization (the Ash Council), which the president had established in April 1969. Out of this process was born Reorganization Plan No. 2, which became law on July 1, 1970.
The theory of the proposed reorganization within the Executive Office of the President was detailed in the presidential message which accompanied submission of the plan to the Congress:
Essentially, the plan recognizes that two closely connected but basically separate functions both center in the President’s office: policy determination and executive management. This involves 1) what government should do, and 2) how it goes about doing it.
—My proposed reorganization creates a new entity to deal with each of these functions:
—It establishes a Domestic Council, to coordinate policy formulation in the domestic area. This Cabinet group would be provided with an institutional staff, and to a considerable degree would be a domestic counterpart to the National Security Council.
—It establishes an Office of Management and Budget, which would be the President’s principal arm for the exercise of managerial functions.
—The Domestic Council will be primarily concerned with what we do; the Office of Management and Budget will be primarily concerned with how we do it, and how well we do it.
The Domestic Council would be chaired by President Nixon and include secretaries of all the domestic agencies (Treasury, Interior, Agriculture, Commerce, Labor, HEW, and Transportation) as well as the vice president, the attorney general, the postmaster general, and the director of the Office of Economic Opportunity.
The envisioned role of the Domestic Council was not all that different from that of the ad hoc cabinet committees that were occasionally established to formulate policy on one topic or another. What was different about Nixon’s approach was the creation of a separately-funded and dedicated staff, like that of the National Security Council, that would have a permanent institutional base, and be charged with integrating the various aspects of domestic policy into a consistent whole.
The Domestic Council—especially its staff—would take the lead in assessing national needs, collecting information, and developing forecasts, for the purpose of defining national goals and objectives; identifying alternative ways of achieving these objectives, and recommending consistent, integrated sets of policy choices; providing rapid response to presidential needs for policy advice on pressing domestic issues; coordinating the establishment of national priorities for the allocation of available resources, and maintaining a continuous review of the conduct of ongoing programs from a policy standpoint, and proposing reforms as needed.
The DC would provide the president with a streamlined, consolidated domestic policy arm, adequately staffed, and highly flexible in its operation. It would also provide a structure through which departmental initiatives could be more fully considered, and expert advice from competing departments and agencies could be analyzed and understood in a more relevant context.
The language of Reorganization Plan No. 2 did not mince words about what was intended. In the months ahead, cabinet secretaries would complain that their submissions—almost always advocating some domestic initiative focused solely on and designed to grow their own particular department—could not reach the president’s desk without a cover memo—from the Domestic Council staff—that discussed alternatives and conveyed the reactions of other members of his cabinet and White House advisors. This lament was well founded—and reflected the envisioned and intended role of the new Domestic Council staff with great precision.
The Domestic Council and its policy formulation responsibilities became the basis for all of John Ehrlichman’s considerable power and influence.
The other new entity within the Executive Office of the President, Office of Management and Budget (OMB), would be far more than just a flashy new name for the existing Bureau of the Budget (BOB). It would certainly absorb and continue BOB’s traditional functions of overseeing the preparation of the annual federal budget, and the legislative reference, but they would no longer be its primary focus: That would be management:
|While the budget function remains a
vital tool of management, it will be strengthen the
greater emphasis the new office will place on fiscal analysis. The budget function is only one of several important management tools that the President must now have. He must also have a substantially enhanced institutional staff capability in other areas of executive management—particularly in program evaluation and coordination, improvement of executive branch organization, information and management systems, and development
of executive talent. Under this plan, strengthened capability in these areas will be provided partly by internal reorganization, and it will also require additional staff resources.
Thus, the role of the new OMB involved substantially greater oversight of departmental and agency function, performance, and executive talent. The intended result, achieved when Reorganization Plan No. 2 came into law, was an awesome consolidation of authority—away from the cabinet departments and agencies and into the Executive Office of the President.
This, then, was the White House structure as my year as a White House Fellow came to an end in August 1970 and my job on the White House staff was about to begin. Not that there was anything wrong or sinister with this approach: It was almost as though the original purpose of the EOB, to house the entire executive branch, had again been achieved, at least from a policy-making point of view. With this new authority, the president simply stood a better chance of exercising the oversight of the executive branch which he had been elected to head.