The Price of Politics (14 page)

After two years of struggling, Gene Sperling was elated when he finally made it to the White House inner circle.
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Obama picked him to replace Summers as head of the National Economic Council. After a decade in exile, he returned to the second-floor West Wing suite of offices where he had virtually lived during the Clinton administration.

Obama appointed Rob Nabors, 39, director of legislative affairs.
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A budget expert who had worked closely with Lew in OMB during Clinton’s second term, and then as OMB’s deputy director under Orszag, Nabors had been majority staff director on the House Appropriations Committee during the Bush administration. His father, a Vietnam draftee, stayed in the Army, eventually retiring as a major general. As a child, Nabors lived in places as diverse as South Korea, Italy, Arizona and Massachusetts. The family finally settled in Virginia, where Nabors finished high school before going to college at Notre Dame and graduate school at the University of North Carolina–Chapel Hill. His former boss, David Obey, the ranking Democrat on the House
Appropriations Committee, once said of Nabors, “He understands the House, he understands the committee, he understands the town, he understands the bureaucracy, and he doesn’t take any crap from anybody.”

The White House now had four Clinton veterans at the top: Daley, Sperling, Lew and Nabors.

F
or perhaps the most important role in the West Wing, the president turned to someone he had worked with intimately for years, David Plouffe, his 2008 campaign manager.

Plouffe, 44, replaced David Axelrod, the political adviser for the administration’s first two years, taking over the most strategically placed office in the West Wing.
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Though the office was small, it was closer to the Oval Office than any other, including the chief of staff’s.

Small-boned and almost frail-looking, Plouffe (pronounced Pluff) was a disciplined political tactician, brought in to align the White House’s day-to-day policies with the long-term goal of making sure Obama won reelection in 2012.

Plouffe had dropped out of college in 1989, after his junior year, to work on his first political campaign. He completed his degree in 2010. Now, after more than two decades of total immersion in Democratic electoral politics, he knew the entire landscape—the Congress, grassroots organizing, fundraising, messaging, advertising and strategy.

Within the West Wing he had the most orderly desk. All papers, files and schedules were carefully arranged. He was in on every important presidential decision, quick to anticipate the second, third and if need be the fourth and fifth bounce of any move.

To any request that he deemed in Obama’s interest, he would say,
“I’ll facilitate that” or “I’ll make sure that happens.” And it then would. In many respects he was running the White House.

Careful but occasionally profane, Plouffe seemed almost egoless on the surface. But he was not modest about his accomplishments, skills and place in history. His 2009 campaign book,
The Audacity to Win
, began with an account of a conversation he had with David Axelrod, Obama’s other top political aide.
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“We had just elected the president of the United States,” Plouffe wrote.
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Not that they had managed it or that Obama had won it, or that the voters had selected Obama. He and Axelrod—the “we”—had won it. He also reported immodestly what Obama had said to him when he told him he wanted him to manage the campaign. “I’ve been impressed by your judgment, temperament, organization and strategic sense.
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 . . . I can see you understand the rhythm and contours of a race like this.”

Plouffe also wrote that when President-elect Obama spoke at the Lincoln Memorial the Saturday before his inaugural, he asked Obama if he was looking up at Lincoln. “Very observant, Plouffe,” he quoted Obama as saying.
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As Plouffe involved himself with war-room-like intensity with the economic decisions before the president, he returned to a theme that went back to the 2008 election about Obama. “He is, in his gut, a fiscal conservative,” Plouffe said. “There is a Blue Dog streak in him.” And that was likely to play against the president’s political interests within the Democratic Party.

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The current continuing resolution to fund the government was due to expire on March 4, so Daley reached out to Boehner to open negotiations. Daley’s appointment had seemed like a good sign to Boehner, who knew and trusted the new chief of staff.

Hey, he told Daley, you ask for this much. I’ll ask for this much. We’ll end up somewhere in the middle.

You know what? Daley reported to the president, Lew and Sperling. Boehner is a partisan, but you can cut a deal with the guy.

The speaker wanted several billion dollars shaved off of federal spending, and the White House complied.

But a longer-term agreement was elusive. Boehner seemed willing to deal, but Lew and Nabors ran into problems as they tried to work out details on the Hill. Barry Jackson, Boehner’s chief of staff, was not nearly as accommodating. First he would send them off to different congressional offices. Go deal with the members of the House Appropriations Committee, Jackson suggested. Then agreements would slide or get fuzzy. It was never-ending. Sperling joked that Jack Lew swore more times in a day than he had in all his eight years in the Clinton administration.

Late on the evening of April 8, Boehner and Obama met in the Oval Office and settled on the terms of a final deal. But up on the Hill, Republicans on the Appropriations Committee didn’t get the message. Lew and Nabors found themselves in the Capitol until 4 a.m., being asked to make changes to a deal they thought was done.

We’re not going to renegotiate what the president and the speaker signed off on at eleven in the Oval Office, Lew said. The president and the speaker are going to have to talk.

At eight the following morning, Obama called Boehner.

“John, you’re the speaker of the House, the leader of the Republican Party,” Obama said. “I’m the president of the United States, leader of the Democratic Party. The country depends on the two of us being able to do our business together. When I give you my word, it has to mean something. When you give me your word, it has to mean something. And it can’t be that people go back and agreements that we make don’t stick.”

Then, the president later told senior staff, the most perplexing, troubling thing happened. Instead of denying that things weren’t going as he’d promised, Boehner seemed to apologize. As if embarrassed, Boehner told the president that, at the time, at least, he had meant what he said. There were obviously things Boehner couldn’t control, the president said.

Finally, on April 9, Congress passed its seventh and final continuing
resolution, and agreed on a budget that would carry the government through the end of September.
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• • •

The speaker thought the continuing resolution fight had given him a chance to seize the moral high ground and force spending cuts. He got the House to pass legislation that funded the Defense Department for nearly six months while cutting an additional $12 billion from other departments and only funding them for one week.

Finally, Boehner won $38.5 billion in cuts for the year. He was the toast of the town at Republican dinners and fundraisers and in his own conference, where more than two thirds of the Republican freshmen had voted with him. In an internally circulated six-page chronology, Boehner’s staff hailed the continuing resolution fight as “the first big challenge of the new majority.”
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Boehner touted the $38.5 billion in cuts and said, “The agreement enacted the largest non-Defense spending cut in dollar terms in American history.”

But on Wednesday of the following week, members of the Republican conference got some unwelcome news. The Congressional Budget Office, which produces nonpartisan analysis of federal spending, had taken a hard look at the numbers.
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The true savings for the remainder of 2011 would be more like $352 million—less than one percent of what the speaker was claiming. The speaker’s numbers hadn’t included funding for overseas operations by the military and other agencies in Afghanistan and Pakistan. Add them to the mix, and discretionary spending would be $3.3 billion higher than in 2010.

Proponents of the deal, it turned out, had counted dubious sorts of “savings” in the plan, including money that, by all accounts, was never going to be spent in the first place. Once the gimmicks were swept aside, it became clear that Boehner was asking Republicans to approve what amounted to a spending increase.

The battle over the continuing resolution, Obama later recalled, had been “somewhat painful” and “a little bit annoying.”
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In the end, he said, “We were able to avoid a shutdown. The only thing that happened
there was I missed, I think, a long weekend with Michelle, so I got in trouble at home.”

What stuck with the president was how differently the deal was perceived by Democrats and Republicans.

“Some of our friends on the left would howl and act as if we had dismantled the New Deal in this continuing resolution deal,” Obama said, “when in fact, in retrospect, actually, we did a pretty darn good job of negotiating and protecting things that we cared deeply about. Ironically, while the left thought we’d been completely outmaneuvered by John Boehner, his caucus thought that he had been completely outmaneuvered. That sets the stage, then, for the later negotiations.”

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Another skirmish in the battle over the continuing resolution grew into a well-fortified battle line. During the heated negotiations, Barry Jackson, Boehner’s chief of staff, reported to David Krone, Reid’s chief of staff, that Bill Daley, the White House chief of staff, said there was a breakthrough.

“I talked to Daley,” Jackson said. “He told me that you guys could get to at least $70 billion in cuts.” It was much more than the White House had been proposing.

Reid and Krone were surprised. Daley said his statement had been misinterpreted. But Krone and Jackson had developed a strong relationship, and Krone believed the speaker’s chief of staff over the White House chief of staff. So did Reid, who was outraged that Daley would insert himself in the negotiation.

“Mr. President,” Reid said in a talk with Obama, “this has to be a relationship between you and me.” Dealing with the new Republican House majority was going to be difficult, and Daley was talking to Boehner’s chief of staff. “What’s your chief of staff doing going around and having his own conversations without telling us?

“I’ll tell you when I want your chief of staff coming up here. I’ll let you know when I need him.”

• • •

Media reports cast the coming debt limit debate as a major showdown. The business and financial communities issued dire warnings. Failure to raise the debt limit in a timely manner would be “a recovery-ending event,” said Federal Reserve Board Chairman Ben Bernanke.
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It would be “catastrophic and unpredictable,” said JPMorgan Chase CEO Jamie Dimon.
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Republican House freshmen vowed not to increase the debt limit, or to do so only under the most stringent conditions. “The only way I would even consider to vote for raising the debt ceiling,” said Representative Raul Labrador, a Tea Party–affiliated lawmaker from Idaho, “is if we have passed, in both the House and the Senate, a Constitutional balanced budget amendment.”

A budget based on Representative Ryan’s “Path to Prosperity” was expected to pass the House with the promise of cutting $4 trillion in spending over the next decade. The administration had not responded. The $1.1 trillion in cuts in its own budget request, sent to Congress earlier in the year, looked paltry.

In the White House, Obama and his staff knew they needed a basic framework to counter Ryan.

Lew and Sperling, reflecting their budget wonk roots, told the president that the only way out of partisan gridlock was to propose their own major budget, spending and tax deal with the Congress. The only times in recent history when big deals like this had actually worked were when the president brought together the key players—House and Senate, Republicans and Democrats. They cited Reagan and Speaker Tip O’Neill in 1983 on saving Social Security, George H. W. Bush and the Democrats in 1990 on raising taxes, and Clinton and Speaker Newt Gingrich on the budget in 1997.

“You bring everybody in the room,” Sperling said, “you hold hands, and you jump together.”

The senators in the so-called Gang of Six—an unofficial bipartisan group of three Democrats and three Republicans—had been promising to put out their deficit reduction and tax plan. Maybe the White
House could adopt theirs somehow. But despite frequent promises that the plan was imminent, the Gang didn’t get it done.

“We’re not waiting,” the president said in exasperation. He wanted to rip into Ryan’s plan. He was holding several meetings a week with his economic and speechwriting teams to figure out how best to do it and on the weekend of April 9 and 10, the president summoned them to the Oval Office. He wanted a credible alternative plan. Democrats didn’t want him to cut Medicare. But to prove his seriousness about deficit reduction, he said, he wanted to propose hundreds of billions of dollars in Medicare cuts and additional cuts in other cherished programs. He would also propose some cuts in Medicaid, the health insurance program for the poor. But there was a line that couldn’t be crossed, and Ryan’s plan had crossed it. The Ryan plan was a model of excess.