The Price of Politics (41 page)

But Jack Lew did. He was stunned. From his experience in Speaker Tip O’Neill’s office during the Reagan years, O’Neill always got back in touch with the president immediately. They had deep policy differences, but it would have been unthinkable for O’Neill not to call Reagan back. To Lew, Boehner’s radio silence was clearly bad news.

• • •

Boehner had concluded that there would be no deal with Obama. It was over. But he believed he could not show his hand publicly. He had three worries. First, the financial markets were now fixated on Washington, and it wasn’t clear how they would react. Even the smallest signal, accurate or not, could cause them to explode.

Second, he knew how Obama operated.

“The White House is brilliant at getting out early and defining things their way,” Jackson said. Boehner had to make sure he had an opportunity to tell his side of the story when it broke in public, before the White House smothered it.

Third, and most importantly, Boehner had to have the congressional plan in place, an agreement on how to proceed independent of the president—a Plan B.

He spent the morning struggling to move forward. He met with Cantor twice, with McCarthy, with McConnell, and then planned an all-important joint meeting with both McConnell and Reid.

This was the crucial move.

“Reid’s an honorable man,” Boehner said. “And when he says something I believe him.” One of the most important communications back channels in Congress was between Boehner’s chief of staff, Barry Jackson, and David Krone, Reid’s chief of staff.

So Reid and McConnell went over to Boehner’s office at 2:30 p.m.

“I’m out,” Boehner told them. “I’m done. I’m calling the president this afternoon. I am done. There’s no deal.” Instead, he said he would do the deal that Reid and McConnell had been working. Even though he didn’t like it, he said he was willing.

The debt limit was a “Rubik’s cube” problem, as Brett Loper, his policy director, put it. But they could solve it. The solution was obvious
and, in some respects, had been staring them in the face. It would include four elements, all of which they had been discussing.

First, the $1.2 trillion cut to general spending for 10 years that everyone, even the president, had agreed on for months.

Second, the supercommittee that Harry Reid had proposed more than a week ago. It would be responsible for coming up with another $1.2 trillion in deficit reduction through additional spending cuts and revenue through tax reform.

Third, McConnell’s complicated mechanism to increase the debt limit so the Congress would not have to take an explicit vote to raise it.

Fourth, this would all be done in two steps. The first step would be an increase of only about $1.2 trillion, so they would hit the debt limit again in March. But the supercommittee deficit reduction proposal would then be ready so they could approve the second $1.2 trillion. Though this was exactly what the president had emphatically said was unacceptable, it was the only way for Congress to maintain its leverage.

I agree with this, McConnell said. “John, we know you did your best. You negotiated. Sometimes it just doesn’t work. So let’s go.”

Reid said he too would agree.

Boehner told me later, “Harry and I understand each other, like each other.
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We don’t agree on a lot of things. But we trust each other. And so when Harry says we got a deal, we’ve got a deal.” The deal with Reid, Boehner said, was “absolutely” ironclad. “I reminded Harry that afternoon, one last time. Harry, I’m only going to agree to the supercommittee under one condition. And that’s if you and Mitch tell me you’re going to work with me to make it work. That’s the only way I would go there. And they agreed.”

Reid was irritated and disappointed with the White House. This could do the job, and he could see that the two-step plan was critical if Congress was to maintain its institutional role and leverage. He had fought all his 24 years in the Senate to protect the chamber’s role and prerogatives, even when the White House didn’t like it.

• • •

At 3:15 p.m., Boehner directed Jackson and his staff to prepare an announcement that the speaker was breaking off talks with the White House and would instead pursue negotiations with House and Senate leaders.

Obama made a third call to Boehner and was told that the speaker would phone back shortly.

“What happened to common courtesy?” Daley emailed to Jackson at 3:49 p.
²⁰¹
m. “Or do you figure you guys can stiff us? If so, good luck.”

Six minutes later, at 3:55, Jackson answered Daley: “So, schedulers are working on a time for our bosses to talk.”

At 4:06, Daley emailed: “It has been 24 hours since the President of the United States called the speaker, and he is unavailable. You guys are acting like amateurs.”

Jackson did not respond.

At 4:10, Daley tried again: “Barry, your friends are saying you are walking away from trying to solve the deficit and trying to do a deal with the Senate to kick the can.”

Jackson sent word through the schedulers that Boehner would call the president at 5:30 p.m.

Boehner and Jackson had decided on a media strategy that would let them tell their side of the story “before the White House went out and accused us of raping and pillaging,” Jackson said.

Boehner’s press office called a single reporter from each of the news organizations that regularly covered the speaker and delivered the message: Come here. Big story. We can’t tell you why we are asking you here.

By about 5 p.m., some 20 reporters had crowded into the speaker’s secondary conference room in the Capitol.

• • •

Reid sent word to Rob Nabors that Boehner was pulling out. At the White House the team gathered in the Oval Office.

“Reid just called,” Nabors reported, “and said there’s no deal, that things are sideways.” It was bad if Boehner was talking to Reid but not to them. They were still in the dark. Maybe it was just because
no deal had been finalized? But more news slowly started leaking out. Reporters called the White House: We hear Boehner’s pulling out.

Oh, no. Not possible. Not again.

“Fuck,” said Nabors.

But it was true. Now word was flooding in. Boehner had a conference call with his Republicans to inform them. He said he had delayed a formal announcement until the financial markets closed.

• • •

“That’s bullshit,” Nabors said, when he heard the speaker’s reason for not calling back. If Boehner was genuine about this he would not be so willing to drive the entire economy off the cliff over what should have been a relatively routine debt ceiling vote. No, not calling, Nabors thought, was not just deeply insulting. It was the ultimate sign of weakness. Why wouldn’t the speaker just call and say, “We can’t get there. Sorry. Let’s figure out something smaller to do.”

• • •

Not long before that promised 5:30 call, Boehner went to his restroom, passing the secondary conference room where the reporters were gathered. He was smoking a cigarette and stopped. He wouldn’t answer the reporters’ questions. One reporter joked about his famous tan.
²⁰²
Was he having a bad day? another asked.

“Have you ever seen me have a bad day?” he replied in his confident baritone. But then he recalled three years earlier when Congress had been forced to bail out the banks with the infamous Troubled Asset Relief Program (TARP), and the Dow plummeted 800 points.

“TARP was a bad day.”

Boehner returned to his office and braced himself for the call to Obama at 5:30 p.m. He picked up the phone and was connected with the president.

“We can’t go forward with this,” the speaker said. “I’m sorry. I think we’ve run out of time, so we’re going to proceed up here with a plan to make sure we don’t default.”

In the Oval Office, Lew, Nabors and the others watched and listened.
The president was gripping the phone hard in his hand as he listened.

“I’ve taken my hits and the arrows from my guys,” the speaker continued. “I bent over backwards. But you wanted more revenue—$400 billion more—and then less on the spending side.”

“That’s not a reason to cut off the conversation,” Obama replied angrily. “I asked you to consider it. And you never got back to me. I’ve been trying to get in touch with you!”

Nabors would remember the look on the president’s face for a long time. In years of dealing with Obama, it was the only time he had actually seen him visibly upset. Normally, when the president showed anger, he looked more like an average person who was merely perturbed—grimacing, agitated. Not this time. He was mad. There was a flash of pure fury. The president was looking up, holding the handset tighter and tighter. So tight that Nabors thought he might break the phone.

“We can put this back together,” the president said. “How do we put this back together again?”

“That’s the $64,000 question,” Boehner replied. He was proceeding with the Senate leaders.

Wasn’t Boehner comfortable with the terms they had been trying to agree on, the exchange of offers, the meetings? the president asked.

“I felt comfortable, or I wouldn’t have continued these conversations,” Boehner said.

Getting angrier, the president demanded to know why Boehner hadn’t returned his call.

“I was trying to figure out what the right thing to do is, what can pass,” Boehner said. “I just couldn’t do any more revenue.” So he had his plan with Reid and McConnell.

What about me? Obama asked. He was not exactly on the sidelines here.

“I understand your problem,” said Boehner.

But Obama wasn’t finished. Boehner sat there, enduring what he thought bordered on a presidential tirade.

“He was spewing coals,” Boehner later told me.
²⁰³
“He was pissed. I said, ‘Listen, we’ve been round and round and round and round. And it’s always the same thing. I told you I’d put revenue on there if we had real changes in entitlement programs. Every time we get there, you and I agree; all of a sudden you guys keep backing up, backing up, backing up. And now you call me and you want more revenue. It ain’t going to happen. I’m done with it.” Finally, at 5:42, they ended the call.

“Ooh,” Boehner said, turning to two staffers in the room, one taking notes of Boehner’s end of the conversation. “He was hot.”

They asked for details.

“Wow,” Boehner said. “He’s really upset.” The speaker lit up another cigarette. The president, Boehner said, had demanded that the combined congressional leadership come down to the White House at 11 the next morning.

Boehner later recalled, “He wasn’t going to get a damn dime more out of me.
²⁰⁴
He knew how far out on a limb I was. But he was hot. It was clear to me that coming to an agreement with him was not going to happen, and that I had to go to Plan B. And thank God, we’d been working on Plan B.”

He recalled saying, “Trying to put Humpty Dumpty back together again would be almost impossible.”

• • •

“I was pretty angry,” Obama told me. “And look, the reason is, here we’ve got a national crisis that needs to get resolved.
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The entire world is watching. I’ve called him probably four times that day.

“And the speaker of the House is avoiding my phone calls. And then comes back to me, not saying, here’s the best I can do, but rather just saying, I can’t do anything, so I’m just going to try to see if we can work something out over in the House.”

He said you were “spewing coals” like a furnace.

“Well, I . . . I was . . . Well, look, there’s no doubt I thought it was profoundly irresponsible, at that stage, not to call me back immediately and let me know what was going on. Because this is the president
of the United States calling to try to resolve a national crisis, and he’s trying to reach the speaker of the House. And if he had called me and said, look, I don’t know yet, or, I’m still trying to work it out, or, here are the problems that I have—any of those responses would have been acceptable to me. Because I was sympathetic to how difficult it was for him to manage his caucus. To leave us waiting . . . And it wasn’t simply that he calls me back to announce that he can’t do it. It’s actually, we don’t get the call until there’s a readout in the press that these negotiations have gone down. Before I get the call.”

What did you say to him?

“I don’t remember my exact words. I think it’s fair to say that . . . I think I was very insistent and very clear that I had not presented him with an ultimatum. Because at this point, you’re already starting to hear spin. And he was trying to spin me. And I said, John, that’s not the conversation we had. And I said to him at that point, if $800 billion is the best you can do, then you need to let me know, and I will be able to tell you how many votes I think I can get out of the Democrats. But to suggest somehow that I made a take it or leave it offer is not accurate, it’s not the conversation that we had. And more to the point, I’m prepared right now to have a discussion with you about the $800 billion. So if you actually still think you can do that, you need to tell me that.

“At which point he just said, ‘You know what, Mr. President? We tried. It got too close.’ ”

• • •

Plouffe saw Boehner’s pullout as an immediate political problem. The president, he said, had to go out publicly and explain what he was trying to do, remind everybody why the debt ceiling was important, and why the deal fell apart. But politics aside, Plouffe had a larger worry. Like Boehner, he used the nursery rhyme comparison: “How on earth are we going to put Humpty Dumpty back together here?”

Within 45 minutes, Obama appeared in the White House Briefing Room to open his veins and bleed a little in public over his disappointment
in the speaker. One White House aide said he seemed to want to sound a bit like Michael Douglas in the movie
The American President:
Damn the politics and full speed ahead on principle.

“I just got a call about a half hour ago from Speaker Boehner,” the president began, “who indicated that he was going to be walking away from the negotiations.”
²⁰⁶
Obama said his offer had been generous. “What we said was give us $1.2 trillion in additional revenues.” He was lumping the $800 billion from Boehner’s offer in with his $400 billion request. This could all be done, he claimed, without raising tax rates and was “compatible with the ‘no tax’ pledge” of Grover Norquist.