G-20

From:john.podesta@gmail.com To: bobama@ameritech.net CC: rahm@friendsofrahmemanuel.com, vjarrett@barackobama.com, prouse@barackobama.com Date: 2008-11-04 19:39 Subject: G-20

I don't want to bug you today, but the memo pasted below concerns a possible invitation to the G-20 meeting on November 15. On the chance that President Bush would raise this with you tonight, I wanted you to be aware that it is the unanimous recommendation for your advisors that you NOT attend. As long as you are aware of that, we can review the contents of the memo tomorrow. Under pressure from President Sarkozy and some other European leaders, President Bush has called the leaders of the G20 countries to Washington for a meeting on November 15 to discuss the international financial crisis. There has been speculation that the President-elect will be invited, though the White House official who informed the campaign of Bush's intention to convene the meeting did not say such an invitation would be extended. Because an invitation, should one be forthcoming, would presumably be made soon after the election, we think it advisable that you consider this issue prior to Tuesday. Some, including President Sarkozy, have characterized this as the start of a "Bretton Woods II" effort. Yet the hastiness with which this meeting has been arranged suggests there will be few tangible outcomes. By way of contrast, G7 heads of state meetings generally involve months of advance preparation at the cabinet level even when the issues are dramatically less complicated or consequential than the financial crisis. Indeed, there is as yet little indication whether the leaders will concentrate on immediate crisis response, longer-term reform issues, or both. In the absence of extensive advance planning, the leaders will probably issue joint principles -- not unlike those already embraced by the G7 finance ministers a few weeks ago. They may also charge various international organizations and ad hoc working groups to develop plans for dealing with the immediate crisis and proposals for longer-term reforms. However, it is also likely that individual leaders will use the occasion to promote their own favored measures – such as a global regulatory body for financial institutions – that are quite controversial. There may well be one or more leaders' meetings next year; there will certainly be follow-up by the governments of the G20 nations. Pros and Cons of Attending the Meeting An invitation to this meeting presents an especially sensitive instance of the larger set of issues related to our engagement with the Administration on the financial crisis throughout the transition (addressed in our earlier memo). We believe the risks associated with your attendance substantially outweigh any benefits of attendance. Pros • Will provide a platform for globally visible engagement on the most important economic issues confronting the nation. As already noted, the failure to attend may be seen as detachment from the international efforts to respond, and thus from the crisis itself. • Attendance would afford you an early and efficient opportunity to evaluate the positions of leaders from other economically important countries. • You might have some impact on any work program decided by the leaders, though realistically this influence will be quite circumscribed. Cons • With at most very limited influence on the outcome of the meeting, you would be associated with it. If, for example, the meeting is widely regarded as an anemic response to grave systemic problems, you will be tied to that perception. • Attendance a mere ten days following your election would thrust you squarely into the debate over immediate crisis response, changes to international organizations, and new initiatives on global regulation – all without having had sufficient chance to develop and evaluate proposals. • Attendance alongside President Bush will create an extremely awkward situation. If you attempt to disassociate yourself from his positions, you will be subject to criticism for projecting a divided United States to the rest of the world. But if you adopt a more reserved posture, you will be associated not only with his policies, but also with his very tenuous global standing. Those whom you have consulted regularly on international financial matters are unanimous in strongly advising against your attendance: Bob Rubin, Paul Volcker, Larry Summers, Bill Daley, Dan Tarullo. Based on consultation with Susan Rice and Jim Steinberg, we believe that they share this view. If you concur with our recommendation, we will need to implement this decision with some care, because declining an invitation may itself be seen as reluctance on your part to confront the crisis head-on and rejection of an offer of bipartisan cooperation. There are four options, presented below. Following the description of these options is a draft statement that could be used in declining a White House invitation to attend. 1. Attempt to head off invitation o There will be an array of transition related issues that will require immediate direct interaction between your transition team and the Bush administration. o As part of that immediate dialogue, have your representative inquire as to the Administration's intentions and, if it appears that an invitation is under consideration, explain that participation does not make sense for the President or the country for the reasons stated above. o Should this course of action be successful, it would simultaneously avoid both an identification with the meeting/Bush Administration and the risk of seeming to reject an offer of bipartisanship/national unity. o If unsuccessful (e.g., if the White House leaked the fact that we suggested you not attend), this approach could itself become an unwelcome story, distracting both from the G20 meeting and your transition efforts to prepare to govern. 2. Use early press conference to deflect possible invitation o At an early press availability following the election, there would likely be a question about your potential attendance at the G20 meeting, something we could make more likely by quietly suggesting to someone that such a question would elicit an interesting answer if asked. o When asked, you could respond with a variation on the statement reproduced below – that the White House has not extended an invitation, and you would not want to be presumptuous in assuming an invitation was forthcoming, but that you would not think it good for the country because there is only President at a time. o Serves same preemptive purpose as an effort at a staff level to head off an invitation, but without risk of a negative news story should the White House take a different view than we do. o If the White House is intending an invitation, it might be transmitted before even your earliest general post-election press availability, in which case we would necessarily default to option 3 or 4. 3. Decline invitation and ask to send an advisor with the limited role of observing the meeting o Assumes each leader will have staff member attending o Demonstrates your engagement with issues of international cooperation without personally identifying you with the meeting or forcing a premature exposition of your positions on these issues o Some risk that you would still be identified with what the meeting did or did not achieve 4. Decline invitation o Avoids all risk of identification with Bush Administration and outcomes of meeting o Emphasizes fresh start that your Administration will bring to economic policy o May project lack of engagement with major international effort to address financial crisis o Potential for press stories suggesting differences, and unwillingness to cooperate, with current Administration Draft Statement Declining Invitation "I appreciate President Bush's graciousness in extending an invitation to me to attend the upcoming meeting of the leaders of the G20 nations to discuss the international implications of the financial crisis. We will surely need broad-based participation in international efforts to respond to the immediate crisis, place the global economy back on track for sustainable growth, and take steps to prevent future crises. However, as I said shortly after the election, the United States has only one President at a time, and until I take office in January that is President Bush. I have, accordingly, told President Bush that I will not attend the meeting on November 15. [I asked the President if I might send one of my advisors to the meeting as an observer, and he kindly agreed.] I look forward to working with our international partners to take the steps necessary to get our economies moving again."