The Price of Politics (40 page)

“She was always open—all the Democrats were open to Medicare changes that affected providers,” such as doctors and hospitals, he said, laughing.

Reminded of Pelosi’s concern about changing the cost-of-living calculation for Social Security, Obama replied, “Well, Social Security was not on the table. There was discussion about Social Security, conceptually. But by the end of this thing—we’ve always been very clear. Look, Social Security is not the driver of our deficits. If you want to have a separate negotiation about Social Security, we’re happy to. We’re happy to listen to what your concepts are. But we’re not going to collapse Social Security into this overall framework.”

This, however, was not the case. In the offers White House staff exchanged with Boehner’s staff, changes to Social Security benefits had been explicitly mentioned.
*

Obama also recalled that during the meeting, “Nancy was fairly emphatic throughout this process: I need to know what Boehner can do. Because Nancy at this point has had the experience and witnessed Boehner not being able to deliver his caucus. And so she says, ‘He’s not having a conversation with me, but he’s going to expect votes from me. He needs to know what it is that I can do.’ ”

The president said he was also concerned about Boehner’s ability to produce votes.

“I think that even doing the $800 billion was a stretch,” he said. “I’m not clear actually that he could have ended up delivering the votes that were needed for the $800 billion. That’s part of the reason why the conversation about how many votes was he going to need from Nancy was so important.

“Now, keep in mind that that evening in the conversation, Nancy’s not happy, Harry’s not happy, I’m not happy, nobody’s happy. But what I say to them is, ultimately the worst thing that can happen is a default. Then nobody will be happy, and the American people will be badly damaged. So if that’s all they can do, are you willing to take that deal? And at that point, both Nancy and Harry say, well, we’re not happy about it. We don’t know how many votes it will take. But, Mr. President, if you decide that that’s the best deal that we can do, we are willing to work with you to try to get something done.”

Reminded that others in the White House reported Reid leaving the meeting unpersuaded, Obama was insistent: “Let me say this. That was Nancy’s position. And that was Harry’s position. Was he happy about it? No. Do we know how many votes ultimately could have been gotten by Harry or Nancy? We’ll never know, because it wasn’t tested.”

• • •

After Sperling was briefed on the meeting, he told some House Democrats that “Reid sold them out on the 18-month extension.”

• • •

Boehner continued to put together his backup plan with Reid and McConnell. Both seemed to be in agreement.

He called Cantor down to his office. The situation was serious. The president had called him and said, “I got to have more revenue.” Obama was no longer hiding behind Nabors; he had now personally floated the idea of $400 billon more, taking the revenue number up to $1.2 trillion. Boehner quoted the president saying, “We can make this deal work. I’ve got to have just a little bit more revenue. I can’t sell it to the senators, but I think we’re real close. Let’s make this final deal.”

As Cantor knew, Boehner had told the president their necks were out about as far as they could go. That was his position. But the president wanted more.

How many Republican votes do you think you can get for that $1.2 trillion? asked Stombres, Cantor’s chief of staff.

In the range of “170,” Boehner said.

“You are crazy,” Stombres said. It wasn’t polite. It was out of line, almost unheard of, for a staffer to talk this way.

“John, can’t do it,” Cantor said, backing his chief of staff. The House Republicans voted in blocks. The first block of about 50 was a group they could get because of strong personal relationships with one of the leaders, Boehner or Cantor. The leaders could call in the chits. These 50 or so probably wouldn’t have let even a $1.2 trillion revenue deal supported by Boehner and Cantor go down with zero votes in the House.

Another 100 House Republicans could be won with better conservative policy, taking them to 150 or 170. With strong conservative policy—great policy from their perspective, policy with a heavy Tea Party flavor—they could reach 230 or the 235 that passed the Ryan budget earlier in the year.

So, Cantor said, a deal with $1.2 trillion revenue might get 50 votes. That was his count.

“Okay,” said Boehner, ending the conversation. “We’ll be in touch.”

Leaving Boehner’s office, Cantor felt they were done. The speaker seemed to buy that they could not sell the $1.2 trillion. Cantor and his staff had been counting votes for eight years, and experience had shown they were pretty good at it. They couldn’t push this anywhere but over a cliff, particularly in light of the Gang of Six proposal. Cantor’s Republicans were already trashing that. It was odd. The Gang, whose stated goal was a grand bipartisan coming together, could not have picked a worse time to release its plan. But Cantor felt that a smaller deal was still within their grasp. You don’t wind up in the Oval Office unless you’re close, he reasoned. So they had been close. How close was a matter of debate. But the president, who had to get a debt limit extension, was surely out on a limb. They all were, weren’t they? Maybe by defining where they couldn’t go, they had left some obvious areas where they could.

Once you get close, Cantor realized, deal fever overtakes everyone. Where was the middle ground? Where was the safe harbor? As Stombres put it, they had to ratchet back. Cantor’s chief of staff looked for an analogy. “Maybe you’re not ready to buy the Cadillac, maybe you don’t want the Cadillac today, but can I put you in this nice sedan?”

• • •

Boehner was wrestling hard with himself. First, Brett Loper reminded him that the $800 billion in revenue had been coming from tax reform. Loper didn’t think they could get to $1.2 trillion through tax reform. It would require the speaker to do what he had consistently said he would never do: increase tax rates.

We’re not going to do that, Boehner said again. “Period, done, end of story.” Obama was asking him to give up his principles for the president’s political interest.

On votes, yes, he had told Cantor he thought he could get in the range of 170. It was not a whip count by any means. But on something major like this, they would get the votes. “If the president and I come
out and we have this agreement,” he said, “we will get it over the line.” It was momentum.

It was a matter of votes as far as Jackson was concerned, and they didn’t have an answer.

• • •

Sperling concluded that if the speaker could not go along with the $1.2 trillion, the $800 billion was nonetheless a salable deal. As was his wont, he hypothesized that Boehner could make a potent political argument. To his mind, Boehner could have gone to his Republicans and said something like: “Guys, I’m giving $800 billion, but it’s a win for us. That’s what I’m agreeing to. Let me tell you what I’m getting you for that. Not extending the high-income Bush tax cuts is dead for the 2012 election. Big Medicare cuts are dead for the 2012 election. You agree to this, we are in great shape. We have taken away their two best arguments. So I know you don’t like what I’m doing. You trust me, you follow me, we will stay in the majority. And if not—I hate to tell this to you guys—but whether we like it or not, if they can run saying we are for deep Medicare cuts and tax cuts for the high-income earners, we’re going to have trouble in 2012. I am solving our problem.”

But as Sperling’s mind ranged across all the possible outcomes, he realized that under any scenario, it might be that Boehner just did not have, and could never get, the votes.

• • •

Obama called Boehner at 10:30 that night, leaving a message asking that the speaker call him back.

Later still, the president remarked to Plouffe, “I still haven’t heard from Boehner. But it’s fine. I guess I’ll talk to him in the morning.”

On his way home at about 11:30, Rob Nabors stopped to grab his usual two-cheeseburger meal at the McDonald’s on 17th Street, a block up from the White House. His cell phone rang.

“So what are you hearing?” the president asked.

At the sound of the president’s voice, Nabors instinctively stood
up. McDonald’s, at that time of night, was filled with two groups of patrons: the homeless and Secret Service agents. Looking around, Nabors decided it would be best to step outside.

“Where do you think we are?” the president pressed.

“Mr. President,” he replied, “given that I just left you two hours ago . . .”

“What is the mood of the caucus?” Obama asked, referring to the lunch with the Senate Democrats. He wanted more detail.

“They feel they were cut out of the process,” he said. Obviously the Senate and House leaders wanted more involvement.

What do you think about that?

“I’ve got to be honest, sir. We weren’t going to get to savings by doing a pass the hat. If we subjected this to everybody’s ‘I’m okay with this/I’m not okay with this,’ the whole thing would’ve fallen apart.” He said he thought the concerns about process were exaggerated. “It’s part of the game. They always believe that the process would be better if they would’ve negotiated this rather than you.” Nabors said he didn’t agree. “Sometimes you just need the president to get this done.”

What was the vote count? Obama asked. Where are the bodies? “Who do you think I’m going to need to call?”

One was Steny Hoyer, the Maryland Democrat who was Pelosi’s second-in-command.

“Is he going to be okay with where we are on federal retirement?” Obama inquired.

“I think so,” Nabors replied. “It’s going to be very hard for him.” Hoyer represented thousands of federal retirees.

“Where are the progressives going to be?” the president asked.

“This is going to be a really hard sell to them because they’re going to see Medicare cuts,” Nabors said. The cuts could total as much as $250 billion over 10 years. It was going to be a shock, and Pelosi was on the record declaring she would not accept any Medicare cuts.

“Pharma is going to react negatively,” Nabors added, using the shorthand for the pharmaceutical industry. “Pharma is going to think
we walked away from a deal.” In the health care negotiations, the drug companies had agreed to a $100 billion cut on drug benefits for Medicare, and now the administration was coming back with more cuts.

Both Obama and Nabors knew that Pharma had hooks into lots of people in Washington.

“We just need to be prepared to talk to Pharma,” Nabors said, “talk about Pharma issues ahead of time, and wrap our arms around the members that we think we’re going to lose.” With an aggressive effort, Nabors said, he was optimistic these members could be won over.

Nabors was used to giving a two-minute report to the president on legislation, but this night, standing on 17th Street, he realized Obama wanted a full lay-down.

Okay, Defense cuts were going to be a giant problem, he said, especially with pro-Defense Democrats such as Ben Nelson of Nebraska. They would also hear from Senator Kay Hagan, the first-term junior senator from North Carolina and centrist member of the Armed Services Committee.

Defense was key in states such as Florida and Virginia. They reviewed the names.

Obviously Defense procurement was on the chopping block, Nabors noted. “That means the Boeings of the world,” he added, “the Northrop Grummans of the world, the Lockheeds of the world. They’re going to be quite upset.” The senators and members from those states or districts were going to call and ask if they were being protected.

To win over a majority they were going to have to play this very hard, the president said, adding, “No sweetheart deals for anybody.”

It had been a wandering, uneasy 20-minute conversation that showed how all the major elements—from revenue, to Medicare cuts, to the votes—remained up in the air.

“B
oehner never called back.”

The words rippled through the West Wing the morning of Friday, July 22. It was discussed at the morning senior staff meeting. Had anyone ever heard of someone not calling back a president for more than 18 hours? No one could come up with an example. At 10 a.m., the president called Boehner again. The speaker did not take the call, and the White House left a message: Please phone the president. The second failed call triggered a discussion of negotiating tactics within the West Wing. Some thought the second call was a mistake, making it too clear that the president was needy. No, others argued, Boehner already knew that. What was the best approach to show a needy Obama but not a desperate Obama? They were already in for two phone calls.

But why had Boehner not called back? The senior staff worried and, as was their habit, theorized. Maybe Boehner was trying to come up with his own plan? So they had to be patient. However, patience was not their strong suit. So the core group of six or seven worried some more.

Plouffe, however, figured that Boehner was caucusing with the Republicans. This was a big deal and it would obviously take time. He didn’t feel very exercised.