The Price of Politics (4 page)

T
he $800 billion stimulus bill of new spending and additional tax cuts, introduced on January 26, was the first bill of the new Congress and the Obama administration. It was called, appropriately, H.R. 1, and it contained not one proposal from Eric Cantor and his conservative Republican group.

The bill was drafted by the Democrats and whenever any Republican tried to make changes, Emanuel’s response was, more often than not, “We have the votes. Fuck ’em.”

This was the bulldozing that Obama had promised to avoid. Cantor reached for the phone and his BlackBerry and launched a full-court press. He was the Republican whip, and he was whipping his members against H.R. 1.

The stimulus bill will not get a single Republican vote, he declared.

“Oh, man,” Stombres, Cantor’s chief of staff, said. “What are you doing?” Cantor’s staff was horrified. It was a promise he would almost certainly not be able to keep.

On January 27, Obama again came to the Capitol, this time to meet just with the House Republicans.

He excoriated Boehner and Cantor for already being against the bill.

“How is it that we could be for your bill,” Cantor replied, “if we
weren’t a part of any of this?” It looked like a Democratic spending wish list.

“It’s a bipartisan bill,” the president insisted, listing elements he assumed Cantor’s caucus would support. “Republicans like business expensing. They like bonus depreciation.”

Cantor resented Obama’s presumption that he knew what Republicans wanted, and what their priorities were, without consulting them. Cantor had served in the Virginia state legislature for years when Democrat Douglas Wilder had been governor. Wilder, the nation’s first African American governor, had taken the time to develop personal relationships with Republicans and find common ground.

Rahm Emanuel told Cantor flat out that his pledge of zero Republican votes for H.R. 1 was delusional. “Eric, don’t embarrass yourself.”

Despite Cantor’s promise, the White House exuded confidence. They had won the election. They were winners. Ray LaHood, a Republican and former member of Congress whom Obama had picked as his transportation secretary, assured the White House that they could confidently count on 30 Republican votes because of money allocated for projects and contracts in Republican districts.

But as details of the bill emerged, it turned out there was less money than expected, and support began to evaporate.

Soon, there were just a few House Republicans saying they would vote with Obama.

Then there was only one.

The holdout was first-term representative Joseph Cao, Republican of Louisiana and the only Vietnamese American in Congress. He planned to vote yes on H.R. 1.

Cantor knew every member in his conference, and he judged that changing Cao’s mind would be nearly impossible. Cao was an idealistic 41-year-old attorney whose 2008 victory was a fluke. Some 70 percent of registered voters in his New Orleans district were Democrats, 19 percent were independents, and only 11 percent were Republican. Representative William Jefferson, the Democratic incumbent, effectively handed Cao the win when FBI agents investigating charges of
corruption and bribery found $90,000 in cash in Jefferson’s freezer. He was indicted on 16 felony counts, and Cao became the first Republican to serve the district since 1891.

Emanuel and the White House worked hard on Cao, reminding him that his congressional district was heavily minority—65 percent African American—and Obama had carried the 2nd District by 75 percent in 2008.

Emanuel still worked out in the House gym, where he got up close with Cao, and he got personal on the phone. According to Cao, Emanuel “insinuated” that if he voted for the stimulus bill, he would be owed a big favor—even help in a reelection campaign.
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Meanwhile, Cantor also pressed Cao, making the standard Republican pitch. Federal spending would not revive the economy, but it would contribute to the soaring deficit. The Republican Party was about small business, which created jobs. They had to put incentives in place for the private sector. Small business first.

The mantra rang true to Cao, whose district was dominated by small businesses that served the vast New Orleans tourism industry.

“Look,” he revealed candidly, “the White House is going to help me with my reelection.” Obama’s endorsement—or even his neutrality—could be critical in 2010.

Cantor was skeptical. “Why don’t you get it down in writing?” he said, urging Cao not to believe any promises White House staff weren’t willing to put on paper.

Cao never asked for anything in writing. He was still inclined to support the bill, even if he were the only Republican to vote for it.

• • •

Meanwhile, the White House was dealing with a bigger problem.

The day before the stimulus was to come up for a vote in the House, the phone rang in Emanuel’s office.

It was Baron Hill, a second-term Democratic congressman from Indiana who served as co-chair of the House Blue Dog coalition. The 52-member coalition had met at 11 a.m., and they were pissed.

Founded in 1995, the Blue Dogs were Democrats who defined
themselves as fiscal conservatives. Most came from politically split congressional districts closely divided between Republicans and Democrats. Many were freshmen who had won traditionally Republican seats by touting their passion for spending constraints and deficit reduction.

The Blue Dogs held mandatory weekly meetings, whipped their votes intensely to ensure that they voted as a bloc, and were not shy about bucking the Democratic leadership on fiscal issues. Obama’s stimulus package cut against the grain of their anti-spending beliefs, and they didn’t think they were getting anything in return.

As one member, Louisiana Representative Charlie Melancon, put it, “We felt like we were getting pushed into a corner and we were damned if we were going to stay there.”

On the phone with Emanuel, Hill said, “Look, we’ve got a problem here.”
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The majority of the Blue Dog coalition planned to vote against Obama’s stimulus package—more than enough to kill the bill.

And this from Obama’s own party.

Emanuel erupted into a profanity-spiced tirade. “This is the first piece of legislation that our administration is going to be voting on and you guys are going to kill it?”

Hill waited out the storm of F-bombs—anyone who had worked with Emanuel knew his technique—and said, “Look, I’m just delivering the message. I’m trying to make this thing work. I don’t want to embarrass the president. And I’m telling you that these guys are going to vote against it.”

Emanuel asked Hill to arrange a meeting with the Blue Dog leadership for later that day.

Hill had reason to hope that the White House would accommodate the Blue Dogs. An early endorser of Obama during the election campaign, Hill had spent time with him on the campaign trail.

More than once, in conversations about economic and fiscal policy, Obama had told him, “I feel like I am a Blue Dog, Baron.”

For their part, White House senior staff recognized that the Blue Dogs had some leverage—just not as much as the coalition believed. The sense in the White House was that with aggressive arm-twisting,
enough Blue Dogs would vote to push the legislation through the House. But just winning wasn’t enough. Emanuel wanted to win big.

“Win big” was a mantra he and Phil Schiliro, the White House’s chief lobbyist and congressional liaison, kept repeating: Success breeds success, one legislative victory leads to future legislative victories. This vote needed to set the Big Win tone for the new administration. And the Big Win had to come fast. Delay would break the positive momentum.

The focus on “win big” was more a product of Emanuel and Schiliro’s legislative strategy than the president’s. Orszag could see the president was focused on getting the deal done. He was in implementation mode.

The stimulus package found the president in a position similar to that of the Blue Dogs—torn between competing priorities. Wanting to tame the federal deficit, he nonetheless believed that, with unemployment on the rise, the economy needed aggressive government support.

• • •

Later that day Emanuel, accompanied by Summers and Orszag, met with the Blue Dog leadership in Majority Leader Steny Hoyer’s private conference room just outside the House chamber. Things didn’t begin well.

“You guys can’t do this,” Emanuel lectured. “You can’t embarrass the president right out of the gate.”

His tone grated. Yelling broke out on both sides until Allen Boyd, an influential Blue Dog from Florida, stepped in. A burly fifth-generation farmer with a shock of white hair and a Southern drawl, Boyd tried to calm everyone down.

Look, we want to try to get to resolution on this, he said. But we can’t vote for the stimulus package because, first of all, we think it’s too big. Secondly, there are things in there that we don’t feel are stimulative. And thirdly, we want a commitment on PAYGO.

PAYGO was an enforcement mechanism previous Congresses had imposed on themselves. The rule required that all new federal spending be offset by cuts or new revenue.

Despite his anger, Emanuel understood the Blue Dogs. During his tenure as head of the Democratic Congressional Campaign Committee from 2005 to 2007, he had focused intensely on defeating Republicans in swing districts, typically by recruiting and supporting candidates who were moderate and fiscally conservative. He had personally persuaded many of them to run.

Emanuel made them a threefold promise. The administration would support cutting some of the nonstimulative items from the package, Orszag would put the administration’s commitment to reinstating PAYGO in writing, and the president himself would meet with the entire coalition after the vote so that they could make their case personally.

Hill looked around the room and hoped that would be enough.

• • •

On January 28, the day of the first House stimulus vote, the White House sent Congress a copy of the projected stimulus spending in each of the congressional districts. Since the bill now contained some $767 billion, Cao calculated that the average district would get about $1.7 billion—a welcome windfall for New Orleans, still recovering from an estimated $81 billion in damage from Hurricane Katrina in 2005.

But when he reviewed the White House report, Cao discovered that his own 2nd District would get only $330 million, about 20 percent of the average. He was astonished. Given the billions the district residents paid in taxes each year, he concluded the deal was no longer a good one for his constituents.

On the House floor, Cao voted no.

Cantor almost couldn’t believe the good news. The House vote was 244–188. All 177 Republicans had voted against it.
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“Not even one?” Emanuel said to Cantor. “What’s going on?”

“You really could’ve gotten some of our support,” Cantor said. “You just refused to listen to what we were saying.”

Cantor might have admired Obama’s self-assuredness—the confidence, the smooth articulation and eloquence—but the president had taken it too far, to the point of “arrogance,” he said.

Obama had demonstrated that he believed he didn’t need any other input. The Republicans were outsiders, outcasts. The president and the Democratic majorities in the House and Senate would go it alone. There was no compromise.

What really surprised Cantor, though, was how badly the White House had played what should have been a winning hand. Though Obama won the vote, he had unified and energized the losers. Not only had he missed the opportunity to get the Republicans into the boat with him, he had actually pushed them away. The failure was one of human relations. There had been no sincere contact, no inclusiveness, no real listening.

Soon after the vote, Cantor attended a White House reception and met Michelle Obama for the first time. The first lady was gracious. But there was a coolness toward him among White House staff that he would remember for years.

• • •

Despite their reservations about government spending, the Blue Dogs largely supported the stimulus bill. Of the 52 members of the coalition, 43 cast critical yes votes. Without them, the stimulus would not have made it out of the House.

Walking through the tunnels beneath the Capitol after the vote, John Tanner, a Blue Dog from Tennessee, playfully jumped on the back of coalition co-chair Baron Hill.

“What the hell did we just do, Baron?” he asked.

“I don’t know,” admitted Hill.

• • •

At the White House senior staff meeting the next morning Schiliro and Orszag received a loud round of applause. The bill had, at least, passed by a comfortable margin, giving the new administration its first legislative victory and the staff a huge sense of relief.

Emanuel was upbeat. Victory begets victory.

Obama, however, was surprised that no Republicans voted for the measure. Emanuel had voiced utter confidence that they would get a
substantial number. His chief of staff was supposed to be an expert in these matters, the practiced veteran.

But Rahm had been wrong. What was going on?

Summers, Obama’s chief White House economic adviser, was also stunned. To win public support, the White House and the Democrats needed to look like the reasonable people in the room, willing to compromise. But the zero votes made them look the opposite—unreasonable and partisan. Not a single moderate Republican would join the new, popular president in a big spending program to save the economy? Odd, he concluded, though in his view the massive stimulus had been absolutely necessary in the effort to improve the U.S. economy.

But, Summers rationalized, if you were a Republican and Obama was successful in reviving the economy, nothing good was going to happen to you. On the other hand, if the economy stayed down despite the stimulus, as a Republican you would not want to be implicated in anything Obama had done, especially his stimulus and economic recovery program. Had it come to that so early in the term?