The Price of Politics (50 page)

Thus began a series of seemingly endless discussions between the two tax chiefs. One major obstacle was the Bush tax cuts. In the tax reform, all the income tax rates would supposedly be lowered, Camp argued, so the Bush tax rates would be irrelevant. There would be a whole new tax code. Say you have won, killed the Bush tax cuts forever, Camp said. “You can tell them you ended the Bush tax cuts.”

Camp finally suggested they duplicate what Reagan and Tip O’Neill had done in the 1983 Social Security deal. “You say what you need to say to your folks. And I’ll say what I need to say to my folks.”

Baucus was unconvinced, thought it was gimmicky, and refused to go along.

• • •

Boehner told Reid several times that he had no confidence that Baucus had the ability to close a deal.

Several days before the supercommittee approached its November 23 deadline, Murray told Hensarling the Democrats would be willing accept $250 billion in revenue.

We can’t do a penny in revenue, Hensarling replied, unless we get the cost-of-living adjustment on Social Security and increase the age of Medicare eligibility. In addition, as he had always said, he had to have serious Medicare structural reform, and he had not seen any detailed plan.

You have to consider this, she pleaded.

He didn’t agree.

• • •

By Monday, November 21, Hensarling was convinced no deal was possible, and he got on a plane for Texas. Some of the committee members continued, with increasing desperation, to look for a deal, but by the 23rd, there was still no agreement. With Hensarling gone, Murray realized that she alone was going to have to tell the country and world they had failed.

At 4:45, she put out a press release she and Hensarling had previously agreed upon.
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It was a model of avoidance:

“We end this process united in our belief that the nation’s fiscal crisis must be addressed,” it said. Left unsaid: Just not by us, just not now.

• • •

“Washington’s Super Failure,” read a
Washington Post
editorial headline the next morning.
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“The lesson of the supercommittee is not a happy one,” the editorial board wrote. “The committee found itself paralyzed. . . . The gridlock, it turns out, was not a product of procedural failings in the system; it was a result of ideological rigidity.”

A
New York Times
headline said, “Failure Is Absorbed with Disgust and Fear, but Little Surprise.”
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The story’s first line asked the question, “Does the American political system even work anymore?”

• • •

No one voiced more disappointment in the supercommittee’s failure than Minority Leader Mitch McConnell. During a one-hour visit to his second-floor office in the Capitol on July 12, 2012, he repeatedly brought it up and apologized for sounding like a broken record.
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He insisted on giving the supercommittee unprecedented authority so an agreement could not be amended and/or filibustered. “My
idea to lower it from 60 to 51, that only disadvantaged Senate Republicans. My idea to give up the right to amend, that only disadvantaged Senate Republicans. So I willingly and enthusiastically gave up my party’s ability to affect the final vote. Could’ve been passed with 51 Democrats.

“Divided government would’ve been the perfect time to solve the biggest problem we have,” he said. Get both Democratic and Republican fingerprints on a deal. “So I started with the notion that this is the perfect time to tackle the single biggest problem we have. Most Democrats will tell you privately what we all know, which is that unless you change the eligibility for beneficiaries on the entitlement side, you will never solve the problem. There are not enough health care providers to cut to get there.

“There are just too many people eligible, given the number of people we have, to pay for it. And until you fix that problem, you’re on an inexorable path to Greece. And so my view was, I know how strongly the Democrats feel about revenue. We don’t think that’s the problem. But we’re willing to pay some ransom, if that’s what it takes, to get the real problem solved.”

He insisted that the Republicans would have agreed to limited revenue increases if there was real entitlement reform, and the offers of $250 billion in revenue, or even the $600 billion revenue through tax reform, were genuine.

“I don’t think naïveté is one of my shortcomings,” he said. “I have many but I don’t think that’s one of them. I was actually shocked that we didn’t finally get an outcome” from the supercommittee.

McConnell knows how to stick to his talking points. He sat patiently in his office with his sphinxlike gaze as I plowed through my questions. He subtly slid by ones he didn’t want to address and persisted on those he did. “I know you’re going to think I’m repeating myself,” he said at the end, repeating himself. “The single biggest threat to the future of this country—there’s nothing even close—is the unsustainable path we’re on, driven by excessive generosity beyond our ability to pay”—he laughed slightly—“on very popular programs. You cannot straighten this country out until you solve that
problem.” To solve it, he said, they would need something again like the supercomittee with an expedited, no-amendment, filibuster-free procedure.

“And 2011 was an opportunity lost,” he said, blaming the president entirely. “I am mystified. I think it would have made him look good. I think there would have been a very positive response with the markets and with the American people.

“You may think it’s to my advantage to blame it on him, but hell, I know what happened. And he was AWOL at the time when we needed a president of the United States to get involved and make a deal.”

I noted that Senator Reid insisted he wanted the supercommittee to work.

“The key Democrat is not Harry Reid,” McConnell said. “It’s Barack Obama. Now obviously I’m partisan, but I know enough about this place to know that when the president wants to make a deal, the members of his party fall in line.”

We discussed his famous statement from 2010 that “The single most important thing we want to achieve is for President Obama to be a one-term president.” I noted that he had also said in that interview, “I don’t want the president to fail. I want him to change” and make deals like Clinton.

“I rest my case,” McConnell said, saying that it gets taken out of context all the time and he was talking about a blueprint to get things done, as he and Biden did on the Bush and payroll taxes in the weeks that followed.

I said that the president believed that there were Republicans who wanted any deal on the debt ceiling negotiations to fail because if it succeeded, it would almost guarantee his reelection.

“He should have tested that thesis by making a deal with us,” McConnell replied. “Because it’s not his responsibility to deliver Republican votes. That’d be my responsibility and Boehner’s responsibility. His responsibility is to not lecture us about what our people will or won’t do. His responsibility is to act like an adult, a president, willing to tackle the single biggest problem, and let us worry about delivering our side.”

• • •

Under the law in force, the Budget Control Act, spending cuts of $1.2 trillion over 10 years were scheduled to begin in 2013. With no deal from the supercommittee, the trigger would also go off in 2013 requiring a sequester of another $1.2 trillion in cuts over 10 years. The Bush tax cuts were also set to expire in 2013, meaning another $4 trillion would be taken from taxpayers over the same 10 years.

That could total $6.4 trillion over 10 years, or $640 billion a year, an anti-stimulus package approaching the size of the 2009 Obama stimulus of $787 billion every year for a decade.

• • •

By early December, there was still no resolution of the president’s payroll tax cut proposal and his media assault was relentless.

“I know many Republicans have sworn an oath never to raise taxes as long as they live,” Obama told reporters on December 5.
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“How could it be that the only time there’s a catch is when it comes to raising taxes on middle-class families? How can you fight tooth and nail to protect high-end tax breaks for the wealthiest Americans, and yet barely lift a finger to prevent taxes going up for 160 million Americans who really need the help?”

The president said he would demand that Congress remain in Washington—through Christmas if necessary—until the tax cut was extended.

McConnell and Boehner were still trying to get some offsets, but Cantor saw no point.

We’re fooling ourselves, Cantor argued. This is not a winning hand.

• • •

At 2:15 p.m. on December 14, Reid went to the White House to meet with the president.

Keep trying for the payroll tax extension, the president said.

If we can’t agree to any of this, Reid said, why don’t we agree to a six-week extension of the payroll tax?

Why don’t you do two months? the president said. Because, six weeks, you come back from the New Year and you’re not going to have enough time to get it extended for the full year.

• • •

Meanwhile, Cantor ran into Bill Daley and Jack Lew by chance at a holiday reception.

The Senate Republicans are going to do a two-month extension of the payroll tax cut, they told him. You guys are already negotiating.

Cantor was caught off-guard. He didn’t know about any negotiations. Had Boehner gone around him again? He had his staff immediately check with Boehner’s staff.

No, no, no, that’s not true, Boehner’s staff insisted. Not accurate.

All right, Cantor’s staff replied. Let’s kill it in the crib, then. The press is calling about this. Let’s say it’s a nonstarter. We’re not doing two months.

The tone from Boehner’s people changed abruptly: Don’t publicly criticize the two-month extension.

• • •

At 8:30 a.m. on December 16, Cantor headed down to Boehner’s office to meet with the speaker and McConnell. I want the two-month extension, McConnell said. Daley and Lew had been right, Cantor realized. McConnell said he was negotiating terms with Reid to get something from the Republican wish list.

The two-month deal was a “nonstarter,” Cantor said as forcefully as he could. “I’m already publicly against this on the record. Half of our members are publicly against it on the record. Half of our members aren’t even sold on the payroll tax to begin with.”

Later, McConnell came back to the House leaders and said, “I can’t reach any kind of agreement with Reid. We’re back to two months.” He wanted Boehner and Cantor to sell two months to House Republicans.

“What you’re planning isn’t going to work,” Steve Stombres told McConnell, not hesitating to challenge him.

The Senate minority leader began to lecture Stombres. The Senate and House are co-equal parts of the legislative branch, he said. “You have to understand that what’s good in the House isn’t always good in the Senate.”

Boehner stepped in. “Let’s call it a victory,” the speaker said.

McConnell carried the word back to Reid. The speaker was on board.

That Friday night Reid had a meeting with the Senate Democrats to advocate for the two-month extension. On a journey where there are a lot of bad roads open to us, he said, this is the least bad route available. This is the best path and we’ll be getting out of here before Christmas.

So the two-month extension sailed through the Senate the next morning, December 17, on a vote of 89–10.

In the afternoon, Boehner and Cantor held a telephone conference call with House Republicans, who had voted for and passed a one-year extension just four days earlier.
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I don’t love this Senate two-month deal, Boehner said. It’s not great. Maybe we should take it and live to fight another day.

It’s a terrible deal, Cantor told the conference, taking a stand against the speaker and putting more distance between himself and Boehner than ever before in front of so many Republicans.

Republican Whip Kevin McCarthy got on the line and essentially agreed with Cantor.

When the members themselves were given time to speak, they erupted against the two-month extension. It was madness. People and businesses needed to be able to plan ahead.

“It’s a piece of shit,” said North Carolina Representative Virginia Foxx.

“It’s a sellout to McConnell,” said Doc Hastings of Washington.

Even Ohio’s Steve LaTourette, considered one of the least conservative members of the Republican conference, couldn’t stomach the deal, saying he wanted to come back to Washington to fight it out.

In all, 53 members waited their turn to speak, and 49 were against the deal.

• • •

Joe Biden thought he smelled a rat. Mitch McConnell was one of the wiliest politicians in Washington. Why would he be pushing the idea of a two-month extension? Everyone assumed a full-year extension was inevitable. Nobody could possibly want a second debate on the payroll tax when the two months were up.

McConnell was putting his Republicans on the wrong side of a tax cut debate? No, Biden concluded, McConnell must be up to something.

Biden called his friend, Republican South Carolina Senator Lindsey Graham.

What’s going on? Biden asked, reaching Graham at home on Saturday. We can’t figure out what you guys are doing, but this looks so dumb it has to be smart.

“No, Joe,” said Graham. “I know what you’re saying. We just fucked this up. It is as dumb as it looks. You all are in the driver’s seat. There is no magic game plan.”

“What happened?” Biden asked.

“I don’t know, but most of us voted thinking that’s the best deal we could get and that the House was okay,” Graham said. “Do you think I would have voted for this so quickly if I thought it hadn’t been a done deal?”

“Just checking,” said Biden.

“I’m not fucking with you,” said Graham. “I mean, it’s not that I’m beyond fucking with you. I’m just not fucking with you here.”

Biden still didn’t seem convinced.

“Are you all capable of doing this yourselves? Of fucking something up this bad?” Graham asked.

Biden thought for a moment. “Yeah. I could see our guys doing this.”