The Price of Politics (43 page)

“We have the opportunity to cut trillions instead,” he said. “To stop him, we need a vehicle that can pass in both houses.” He was no longer negotiating with the president.

The question was “What can we pass to protect the country from what the president is trying to do?”

He went on, “The White House tried to create buzz by saying there is some kind of grand bargain to be had. Let me be clear—that kind of grand deal cannot be had with this president.”

He hadn’t meant to inflame anyone by mentioning, during a recent public appearance, that there had been a deal on the table, he told them. “An agreement with the president was not possible and is not possible.”

“There are no secret negotiations going on. So don’t worry,” he added.

“No one wants to default. If we stick together, we can win this for the American people. It will require some of you to make sacrifices. If we stand together, our leverage is maximized and they will have to deal with us.”

He described the state of the discussions with the White House.

“The president wants a $2.4 trillion increase with no spending cuts. We won’t let that happen,” he said, despite the fact that the negotiations had explicitly included large cuts.

“They think they can win because they can divide us. They can’t. We must stand together and take action,” he said.

“When you get to town tomorrow, we’ll have more detail for you,” he promised. “We’re doing the right thing. You all know the right thing isn’t always the easiest thing to do.”

Then Cantor stepped in. “Thanks to the speaker for his patience in working with the administration,” he said.

But then he quickly undercut the speaker’s claim that Obama had demanded there be no cuts.

“We are where we are because the president and his party do not want to cut anywhere close to what we do without raising taxes on people and small businesses,” he said. “That has been the problem at each turn. The president’s position of forcing us to give him a debt limit increase through the election is purely political and indefensible.”

He echoed Boehner’s call for a show of unity.

“Let me tell you, though, he has the microphone,” Cantor said, reminding them that the president had some advantages. “The only way to overcome him is to remain united and insist that every dollar the debt limit is increased, we have equal or more dollars in spending cuts without any tax increases. Thank you all for your patience. This is a fluid situation. Let’s stay united. We can do this.”

Finally, Majority Whip Kevin McCarthy spoke.

“You see the battle the speaker is in,” the California Republican
said. “The president is throwing a fit because he’s worried about the election. He doesn’t want cuts, he wants increases. He lost his cool the other night because he knows he won’t get what he wants if we remain united.”

• • •

The speaker gathered Reid, McConnell and Pelosi in his office. No staff. Even Jackson and Krone were excluded, so they went down to Jackson’s office and watched the Cincinnati Reds baseball game on television.

The leaders had essentially reached an agreement, but there was still a crucial question that had not been answered. What happened if the supercommittee couldn’t agree on the second $1.2 trillion in deficit reduction? What would be the trigger or enforcement mechanism to make sure $1.2 trillion was cut from spending?

We would use the $1 trillion in imaginary savings from the Overseas Contingency Operations, Boehner and McConnell said. The wars were ending anyway.

Reid was particularly surprised; he had pushed dozens of times to use this OCO money.

“We can never put that in writing,” Boehner said, “but you have our word.” It can never even be talked about, McConnell and Boehner said, never be repeated outside the room.

Reid and Pelosi agreed. Pelosi was happy to use the imaginary money. It was better than more entitlement cuts.

The deal was done.

They began drafting a joint public statement that would report progress on their talks, and optimism that they were moving toward a solution.

At 5:21 p.
²¹³
m. Michael Steel, Boehner’s press secretary, emailed a draft of a joint statement to Reid’s and McConnell’s communications directors, Adam Jentleson and Don Stewart. It read, “The leaders in both parties and both Houses of Congress are working together and making progress.”

Krone told Barry Jackson that Reid and he had okayed it.

At 6:05 p.m., Steel emailed Jentleson, “I’m told that Mr. Krone signed off on this.”

“That’s a fact,” Jentleson emailed back at 6:20.

• • •

Boehner met with the rest of the House Republican leadership, Cantor, McCarthy and Hensarling, to discuss the next steps.

There was a growing sense of urgency. Reid was under about as much pressure from the White House as he could take. What congressional leader could withstand a direct appeal from the president of his own party? Maybe not even the independent-minded Harry Reid.

The Republican leaders agreed that if the president forced Reid to step away from the deal, they would try to press forward anyway to pass the congressional leaders’ three-part plan with 218 Republican votes in the House. That would put pressure on the Senate, where the bill should be acceptable, which would, in turn, put pressure on Obama to sign it.

At 8:11 p.m. Jentleson sent Boehner’s staff an email: “Senator Reid will no longer be joining this statement. He will be releasing his own statement tonight.”

“I will not support any short-term agreement, and neither will President Obama nor Leader Pelosi,” Reid said in his statement.
²¹⁴

Though Reid said this publicly, he was still riding both horses. His staff had continued working with the Republican leaders.

• • •

Around 10 p.m., Obama called Boehner, who was at dinner with friends.

I am not going to sign a bill that requires me to deal with this a second time before the end of 2012, Obama said. He was furious.

“Listen,” Boehner recalled telling the president, “I understand it.
²¹⁵
All right? But you’re not going to have a choice. We’ve got an agreement.”

Obama said if the trigger could ensure a full debt limit extension, taking the country through 2012, he might support it.

That’s not the agreement the congressional leaders have, Boehner said, despite what Reid might be saying publicly. The speaker wasn’t interested in discussing it with the president.

Boehner recalled, “He was moaning and groaning and whining and demanding .
²¹⁶
 . . threatening. . . . He was pretty desperate.” Obama again said he would veto such a bill. Boehner said if the leaders could get the bill on Obama’s desk, “I knew there wasn’t a damn chance he was going to veto the bill.”

The president repeated his offer. He would back off on the request for an additional $400 billion in revenue if the Republicans would give elsewhere.

We’re too close to default to reopen the talks, Boehner said. Congress is going to move forward on its own.

Boehner believed that he had found a recipe that would work, especially for Harry Reid. If he could get it through the House in the form that Reid had agreed to, the president would be forced to accept it.

In a statement to the press, Boehner’s spokesman, Michael Steel, said, “The Democrats who run Washington have refused to offer a plan.
²¹⁷
Now, as a result, a two-step process is inevitable.”

• • •

Asked about Boehner’s description of his late-night call, Obama said, “Listen, anybody who knows me knows, I don’t moan, I don’t groan, I don’t whine.”
²¹⁸
He laughed. “I’m not desperate. I was very angry about how he had behaved, and more concerning was the fact that we were now only a few days from there literally being $5 billion left in the Treasury for the United States government.”

This was how precarious the fiscal situation had become. Just $5 billion was about half a day’s worth of the federal government’s expenditures. It had come down to the wire.

• • •

At the White House, the president told his senior staff that the call with Boehner had led nowhere. Boehner had said he had chosen his course, and insisted the congressional leaders were going to get this
worked out. “I don’t think he’s going to bite,” on the old $800 billion revenue plan, the president said. “So we’ve got to figure out Plan B. Which is, how do we get out of this thing?”

The problem was that they did not have a Plan B.

• • •

It was increasingly clear that no one was running Washington. That was trouble for everyone, but especially for Obama. Though running things was a joint venture between the president and Congress, Nabors thought a president had to dominate Congress—or at least be seen as dominating Congress. If the president succumbed it could be fatal. Reagan and Clinton were seen as presidents who had gained and largely held the upper hand with Congress. The last president to fold was George H. W. Bush, who gave in to Democrats’ demands that income taxes be raised in a 1990 budget deal. And Bush had been a one-term president.

O
n Sunday morning, July 24, Boehner appeared on
Fox News Sunday
with Chris Wallace and said that if congressional leaders could not come up with a bipartisan plan, the House Republicans would move forward on their own.
²¹⁹

He accused the White House of failing to offer a plan to deal with the debt limit.

“The conversations I was having with the president . . . there was never any plan from the White House,” he said.

Senior staff members at the White House knew this was not true. The voluminous paper exchanges and meetings were proof.

“The whole plan came from us,” Boehner continued.

Not true either, the White House knew.

“We laid out the framework,” Boehner said. “And at some point they have got to lay their cards on the table.”

Obama had laid out exactly what he would do, the White House believed, but so many numbers were fuzzy.

Boehner had been preceded on the show by Geithner, who had alluded to the possibility of reviving the grand bargain.

Chris Wallace asked, Would Boehner consider going back to his original offer of $800 billion in additional revenue?

“I have never taken my last offer off the table and they never agreed to my last offer,” Boehner said.

“So your last offer, $800 billion in new revenue and entitlement cuts, spending cuts, that’s still on the table?”

“It is still on the table,” Boehner affirmed.

In an interview nearly a year later, Boehner said the purpose of his statement was not to reopen negotiations with Obama over an $800 billion revenue deal.
²²⁰
“There were a lot of people panicking,” the speaker said. “The goal of the appearance was to reassure people that—I know the president’s having a meltdown—but Congress is getting this done.”

• • •

At 11:30 a.m., Obama called Boehner to ask, How are we going to resolve this?

The congressional leaders are working on it, Boehner insisted. That was the answer, that was the solution, that was the path they were on.

Their talk lasted less than two minutes.

Did someone hang up on the other? I asked Boehner.
²²¹

“No, no, no,” the speaker answered, “No, no, no.” He added, “It was clear to me they had no Plan B. Clear to me, frankly, for weeks they had no Plan B.”

Later in the day, Boehner held another call with the Republican conference. He was holding them close. Though he had nothing to announce, he promised he would have something for them at the conference meeting scheduled for Monday at the Capitol Hill Club.

Boehner hoped that he could still keep Harry Reid on board with the congressional plan because the majority leader had kept his staff working with the Republicans.

Throughout the day, negotiations on finalizing the congressional plan continued, with a focus on language outlining the general spending cap and the firewall between Defense and other general spending.

• • •

David Krone called Nabors to explain the deal. It was now simple: the $1.2 trillion in general cuts over 10 years; the supercommittee backed up by a trigger of $1 trillion from the Overseas Contingency Operations; $400 billion in interest savings; and $100 billion in other mandatory savings, such as military retirement and health care, and also civilian retirement. The total came to $2.7 trillion. It was still in two steps.

“I don’t know if the president’s going to go for that,” Nabors replied.

“I don’t know what else I’ve got, Rob. I just don’t know.” Senator Reid, Krone noted, was hell-bent on OCO.

Nabors then briefed the president, Daley and Lew.

“The one thing I said I actually needed,” the president noted, “they didn’t get. I needed this to go past the election, and they didn’t get it for me. This can’t work.”

Obama sent word to Reid and Pelosi that he wanted them at the White House at 6 p.m. No purpose was given.

Reid arrived with Krone. All were dressed informally, Krone in khakis, a button-down shirt and a pair of loafers without socks. To the president’s personal assistant, Anita Decker Breckenridge, Krone looked tired, pasty and emaciated. Your boyfriend needs to eat a sandwich, she wrote in an email to Alyssa Mastromonaco, Obama’s deputy chief of staff and Krone’s girlfriend.