The Price of Politics (42 page)

“I couldn’t get a phone call returned,” he said. “I’ve been left at the altar now a couple of times.” The bottom line, he insisted, was no partial extension of the debt limit. He would only sign onto a deal that extended the limit past next year’s election.

He fired a broadside at the House Republicans. They had to take “responsibility” for any problems that might arise. Then, after making it clear that he blamed Republicans, he said, “Let me repeat, I’m not interested in finger-pointing and I’m not interested in blame. I just want the facts to speak for themselves.”

He insisted that the congressional leaders be at the White House the next morning. “I want them here at 11 a.m tomorrow. We have run out of time.”

Obama finished at 6:36.

“I’d sat here and watched his performance,” Boehner later recalled, “which I thought was un-presidential.
²⁰⁷
Angry.”

Boehner and his staff thought the president had made a serious mistake appearing so emotional in public—it was the wrong approach, and could wind up scaring the country and the financial markets.

The message war was on, Jackson said, and he urged the speaker to make his own statement on television.

Boehner was not eager to jump into a public shouting match with the president.

“You’re going to go out,” Jackson insisted. “We’re going to get you out. You’ve got to respond to this.” There was, he said, a theme here
for Boehner to adopt: “This isn’t Republican/Democrat, this is the Congress versus the White House. We’re equal branches of government, and you know, we’re big boys and girls too up here.”

So, 40 minutes after the president’s press conference, Boehner appeared at the House Radio-TV Gallery. He wanted to appear calm and cool.

“There was an agreement with the White House at $800 billion in revenue,” he acknowledged, but only through tax reform.
²⁰⁸
The breakdown was because, at the last minute, the president “demanded $400 billion more.”

“The White House moved the goalposts,” he said. “Dealing with the White House is like dealing with a bowl of Jell-O.

“It’s the president who walked away from his agreement and demanded more money at the last minute. That is—and the only way to get that extra revenue was to raise taxes.”

“Do you trust the president?” a reporter asked.

“I do trust him as a negotiator,” Boehner said carefully.

Later Boehner told me that he realized the importance of the question.
²⁰⁹
“That’s a dangerous question,” he said, “considering the political climate we were in. I was more worried about how it would sound to the Tea Party. So I was trying to answer the question without getting myself in a whole lot of trouble.”

He told me that the Tea Party had no objection to his phrasing. “I think it worked out pretty well. They were pretty happy about it.”

The speaker felt he had maintained his cool.

Friday night, he sent a letter to the House Republicans saying, “A deal was never reached, and was never really close.”

• • •

At the White House, Plouffe, Sperling and the others were outraged. It was a “lie,” Sperling said. The president had not “demanded” $400 billion more, but merely asked Boehner to consider it.

“Obviously a cover story for why it fell apart,” Plouffe said. “It wasn’t true. It wasn’t true.”

They brought Jack Lew and others to the Roosevelt Room to tell
reporters they hadn’t moved the goalposts, but had only suggested moving them.

In the briefing, recorded by the White House, Lew said, “There was a great deal of zones of agreement and by the end we were really just focused on a few areas where we had to close. And if Speaker Boehner had called back and said yes, the American people would have a deal.” Lew enumerated the issues that remained unresolved. First was the trigger if the supercommitee did not find another $1.2 trillion in cuts, second was the depth of Medicaid cuts, and third was revenue.

But Plouffe understood that this was just a battle within the broader war. Boehner had taken the lifeline. He had walked through the door the president had opened for him. Plouffe didn’t think the White House could regret doing that—it seemed the only way to get more Democratic votes—but the playing field had suddenly shifted.

Plouffe and Nabors talked. “They were going to find a door,” Nabors said. “Because at the end of the day, the political difficulty of passing this was not improved or diminished by the inclusion of more revenue. It was still an abstraction” buried in some future tax reform. “Like $400 billion of revenue isn’t all that much—$40 billion a year over 10 years.”

But the president was in one of the biggest political and economic jams of all time, and had no alternative way out.

B
oehner scheduled a conference call with Reid, McConnell and Pelosi for the morning of Saturday, July 23, to discuss moving forward without the president.

Daley called Pelosi. You just can’t do this to us, he said. You’ll be leaving us hanging out there. Don’t join the conference call. She agreed.

Leader Pelosi will not be able to join the call, John Lawrence, her chief of staff, emailed Barry Jackson.
²¹⁰

David Krone called Jackson. Reid would be dropping out of the conference call too.

Jackson understood. “Poor Reid was left hanging,” he reported. “It’s becoming a political thing, and now Reid’s got to go be a Democrat rather than a congressional leader, which I appreciate. It happens.”

But that did not prevent Boehner from talking directly to Reid, so he did.

Reid said he was still on board with the congressional plan—$1.2 trillion in 10-year spending caps, his special supercommittee idea to identify the next $1.2 trillion in cuts, and McConnell’s convoluted plan allowing Congress to duck a vote to increase the debt ceiling.

How do I get 60 votes? Reid asked. What can McConnell do? How many Republican votes would there be? He was in execution mode
now. There was no time for philosophical debates. They weren’t his style anyway.

Reid and McConnell talked, and the Rubik’s cube package was on track. It was a deal.

Boehner spoke with McConnell, who said Reid was in.

As the president had requested, at 11 a.m. the four leaders—Reid, McConnell, Boehner and Pelosi—arrived at the White House.

In the West Wing lobby, Boehner pulled Pelosi aside. “We are not negotiating here,” he said. The four leaders would work this out among themselves.

Fine, I agree, Pelosi said.

The four leaders went to the Cabinet Room. “We all came stumbling in there,” Boehner later told me. “Nobody wanted to be there. The president’s still pissed.”

The president had met with Biden, Geithner and some of the others beforehand. It was agreed that Geithner would lay it on thick, reminding the leaders how short of time they were and how damaging default could be to the financial markets.

No congressional staff were admitted. Key White House players like Nabors and Sperling were left waiting in the White House lobby.

In the Cabinet Room, Geithner issued another warning to the congressional leaders, declaring there was a new deadline. This was not a Monday morning problem. Instead, if they didn’t have a plan or a deal by late Sunday afternoon when the Asian financial markets opened, everything could begin to crack. Given the global importance of U.S. Treasuries and the U.S. dollar, he reminded them, if the debt limit was not extended and the country went into default, it could trigger a worldwide meltdown. Things were that serious.

You need to move off the idea that the cuts be greater than the debt limit increase, Biden told Boehner. As a starting point, to give them more flexibility, you’ve got to ease off on that.

Boehner refused. That had been his bottom line from the beginning: cuts equal to or greater than the debt limit increase. He was not budging.

Pelosi, who had not played a significant role in the discussions
among the congressional leaders on their own plan, spoke up several times to insist that entitlements be protected.

You’re not being constructive, Nancy, the president said, interrupting her. We need to get something figured out in the next couple of days. I have to have something that extends the debt limit past the election, he said. I won’t take any kind of two-step process.

Boehner said that he believed he and the other three leaders had a plan. We think we can work this out. Give us a little more time. We’ll come back to you. We are not going to negotiate this with you.

Obama objected, saying that he couldn’t be left out of the process and wanted the negotiation to continue. “I’ve got to sign this bill!” he reminded them.

“Mr. President,” Boehner challenged, “as I read the Constitution, the Congress writes the laws. You get to decide if you want to sign them.”

Boehner later recalled, “Oh, God, if you could’ve seen the look on his face. I’m surprised he didn’t storm out of the room.”

Boehner’s approach was now clearly at odds with the deal-making style he had employed for the past seven months. He had always negotiated with the president and the administration. But his new message was clear: We’re going to take care of this. Time is out. We’ll figure out what can pass. And he said it with a certain amount of relish.

Then Harry Reid spoke up. The four congressional leaders want to speak privately, he said. Give us some time.

This was it. Congress was taking over. The leaders were asking the president to leave a meeting he had called in his own house.

Fine, talk, the president said, knock yourselves out if you can get a deal. There is no pride of authorship here, just do it—if you can.

The president, vice president, treasury secretary and budget director all left the room.

“I think he was pretty happy to get up and leave,” Boehner later recalled.

Boehner felt it was as if the president was saying, “You guys are children. You fix this.” Well, Boehner believed, they were going to fix it, and they were well on their way to doing so.

When Nabors heard what had transpired in the Cabinet Room, he thought it sounded overwrought. No way could the president be cut out. They would need him to help get votes. On the Democratic side, if Reid and Pelosi cut a deal, there would be no way to sell any entitlement cuts to their Democrats without the president saying plainly that he was also on board.

Plouffe saw how disappointed the president was. It was clear the grand bargain was gone. So maybe it was best to let the congressional leaders meet. “Let’s see what these guys can work out to get us out of the jam,” Plouffe said. “Great opportunity missed. How do we salvage this?”

• • •

How did the president feel, being voted off the island in his own house?
²¹¹

“You know, the truth of the matter is, at that point, all I’m concerned about is getting this thing done,” the president told me. “And so I’m not concerned about protocol. Essentially what I think McConnell and Boehner had decided was, maybe we can go ahead and work out something with Reid. And we can do an end run around the White House.

“They didn’t like negotiating with Jack,” he said laughing, “who knew the budget better than anybody. They didn’t like negotiating with Rob. And they felt like they might be able to just get a better deal, for a short-term deal, with Harry Reid.”

• • •

In the Cabinet Room, the four leaders didn’t have to do much. They already had the three-part framework worked out. It had been the subject of discussions among staff from Boehner, Reid and McConnell for most of the week. They agreed to ask staff to continue working all this into a two-step plan to raise the debt limit.

The framework remained generally the same: It would have discretionary caps of $1.2 trillion over 10 years with a short-term debt limit extension. The debt limit increase would include McConnell’s “disapproval” process. A supercommittee would be created to find additional
savings by year end, and if it were successful, another increase in the debt limit would be authorized. One new addition required the House and Senate to vote on a balanced budget amendment to the Constitution, a perennial Republican favorite.

It was a deal in which Boehner, McConnell and Reid got what they wanted. Boehner got cuts greater than the increase in the debt limit. McConnell shielded his senators from ever having to cast a vote on raising the debt limit. And Reid got his joint committee on deficit reduction. Pelosi’s insistence that entitlements be spared was not honored.

The other person who didn’t get what he wanted was no longer in the room. The deal, if it passed, would guarantee that the president would have to revisit the debt limit during an election year.

• • •

Boehner arranged an afternoon conference call with his House Republicans.
²¹²

“The administration says they need all of the increase up front so [the president] doesn’t have to deal with this until after the election,” Boehner told his conference. “He started the year asking for an increase with no cuts. He’s trying to set this up so he gets a $2.4 trillion blank check—or to end in default so he can blame us. We know how bad both of those scenarios are.