The Price of Politics (19 page)

A growing feeling of incredulity came over Van Hollen. The administration didn’t seem to have a strategy. It was unbelievable. There didn’t seem to be any core principles.

First Kyl, then Cantor, said they needed deeper cuts or they would not be able to sell it to Republicans in either the House or Senate.

Some revenue, Baucus said, almost pleading.

“We really have members who don’t get the need to raise the debt ceiling,” Cantor repeated. “It’s an existential question for them.”

“So you’re looking for Democrats to be more responsible than you?” said Biden. “You can’t use the irresponsibility of your own members to get your way.”

“I’m frustrated, because I think you don’t get our perspective,” Cantor said.

“Republicans want Democrats to sell their sisters!” the vice president
said. They wanted Democrats to give up “everything we hold dear” without making any sacrifices themselves.

Cantor threw his hands in the air.

“Why don’t you just say it’s the crazy Republicans made you do it?” he asked.

• • •

After the meeting, Biden called a Democratic huddle. They agreed to say something positive to the media—that these are tough issues but everyone is still at the table. The whole enterprise was very tricky politically, Biden conceded, and he was not sure how to navigate.

There was little show of confidence in the administration at Pelosi’s message meeting that day. Most were skeptical that the president would stand firm in the end, afraid instead he would cave to the Republicans as he had in extending the Bush tax cuts six months earlier.

• • •

The eighth meeting was in Reid’s Senate conference room on June 15. Biden opened with the enforcement mechanism that would kick in if the budget cuts they identified weren’t imposed. The trigger should include revenue, so everyone had skin in the game. The Republicans disagreed. They certainly would not go along with a trigger that would mean automatic tax increases.

A trigger requiring revenue would be more credible to the financial markets, Geithner said. He pointed out that the new Conservative government of the United Kingdom had included revenue in its deficit reduction plan.

Saying he was speaking only for himself, Biden said if they included sufficient revenue in a down payment, a chunk of money up front, maybe they would not need revenue in the trigger.

Van Hollen argued that they would have to have revenue in the trigger.

Kyl pressed for only spending cuts.

The retirement of the baby boomers would drive up all federal spending, Biden said, even if costs were frozen.

Kyl kept hammering. They had to try to get more Medicare savings, especially through increased co-payments from seniors or through a process called means testing, which would raise the costs of care for high-income seniors.

Some Democrats are opposed to means testing, Biden said. It could erode the near-universal support for the program.

Kyl again urged more Medicare savings.

Medicare, Biden said, was going to be one of the big issues in next year’s elections. Whoa! he blurted out, letting off some steam. They all recognized that they were not going to resolve all this right here around the table. Somewhat wistfully, he went through the possibilities for the next year. Who might win the White House? The Senate? The House?

Each of them could dream of breaking the electoral bank and taking all the chips home—the big prize of one-party government. With all the chips, there would be no need for meetings and negotiations like this.

• • •

In a private discussion after the meeting, Biden and Van Hollen agreed that the talks were getting difficult. Van Hollen noted grimly that polarization had increased among the Democrats.

Ugh, Biden said, Pelosi had hit him hard on the issues the night before.

Later, Baucus met with Van Hollen and Clyburn.

We have to limit agriculture subsidy cuts to $20 billion, Baucus said.

Clyburn said he would agree to that, but Van Hollen held out for getting to $30 billion.

If it was not kept down to $20 billion, Baucus threatened, he would walk away from the negotiations.

• • •

On June 16, day nine, at about 11:20 a.m., Biden had the group’s Democrats meet in his ceremonial Senate office. He laid out his slightly modified blueprint—$1 trillion in 10-year general federal spending cuts; $200 billion from other programs, including food stamps and unemployment insurance; and $300 billion from health programs. Add in the reduction in interest payments—about 20 percent of the total measured over 10 years—and it came to $1.8 trillion.

Van Hollen repeated the need for revenue. He said he could not support a deal without significant revenue, maybe as much as $600 billion. He knew a figure that high would be a stretch without any income tax rate changes.

Too much, not realistic, some countered. Van Hollen was worried that the administration was wobbling on revenue and too eager to cut a deal.

• • •

The full group was supposed to meet that morning, but a marathon series of votes had been scheduled in the House, which meant half the negotiators were unavailable.

With their bosses all busy voting, Biden called the group’s key Democratic staff into his ceremonial office.

“Speak for your bosses,” Biden said. “What revenue can you live with?”

The administration’s idea for limiting tax deductions in the upper brackets might work, one staffer offered, but Republicans would never go along. As Biden went around the room, the staffers made it clear that their bosses would not support lots of revenue ideas.

Biden became increasingly annoyed.

“You keep asking us to ask for more revenue, but you have trouble finding even $400 billion worth of revenue that you would be willing to vote for,” he said. “We can’t ask for more than our side is willing to support.”

• • •

At 4:15, the full group convened in Reid’s conference room.

Baucus had been waiting to launch his counterattack on the proposed cuts to agriculture subsidies.

I will “walk away from any deal” with $30 billion in cuts, he announced. It was a 20 percent cut—huge compared to what federal employees were being asked to contribute, for example. This was the clearest threat anyone had issued so far.

Baucus pulled out a three-page alternative, proposing cuts in other programs that were technically part of the Agriculture budget but had nothing to do with agriculture subsidies paid to farmers and ranchers. His proposed 10-year savings included $3 billion from the ethanol tax credit, $4 billion from eliminating duplicative job training in the food stamp program, and nearly $7 billion from reducing the Strategic Petroleum Reserve from 727 million barrels of oil to 650 million.

Participants in the meeting said it was difficult to tell whether the Democrats or Republicans had a harder time containing their laughter.

Dodging the conflict, Biden said the chairmen and ranking members of the Agriculture committees should work this out, but his frustration boiled over. This was “Mission: Impossible,” he said, and adjourned the meeting.

• • •

Biden called Van Hollen the next day, Friday, June 17.

Hope you and the president seal the deal on the links tomorrow, Van Hollen said. Obama, Biden, Boehner and Ohio Governor John Kasich were scheduled to play golf.

I’ll call you from the golf course if we get a deal, Biden promised.

Use the House and Senate Democrats as the bad guys with Boehner, Van Hollen suggested. Tell him that the Democrats would not agree in principle to any Medicare cuts or changes without an agreement in principle on revenue. I’m afraid that if we leave revenue to the end, the
Republicans will say we had a deal on everything, but the Democrats wanted to raise your taxes. The Democrats had to position themselves so they could say the Republicans had demanded Medicare cuts but refused to get rid of special interest tax breaks.

“I won’t screw you,” Biden said. “We’re all together on this.”

O
n Saturday morning, June 18, Boehner and Obama teamed up to beat Biden and Ohio Governor Kasich in a round of golf at Andrews Air Force Base outside Washington.
⁹⁴
“The president and I whupped ’em pretty good,” Boehner said.
⁹⁵
“But it was just golf.” The president and speaker, who shot a very respectable 80, collected two dollars each in winnings, and the foursome was photographed enjoying cold drinks on an outdoor patio afterward.

Later, the president recalled the conversation, noting that he and Boehner had already agreed that they were both interested in pursuing a “big deal”—something with deficit reduction of as much as $4 trillion over 10 years.
⁹⁶

“You know what, Mr. President? I meant what I said. I still believe we can do a big deal,” Boehner said.

“John, I completely agree,” said Obama.

Boehner said he didn’t think trying to negotiate a deal with the entire congressional leadership would be productive. “Maybe our teams should start talking,” he said.

“John, I’m all there with you,” Obama replied.

• • •

Back at the White House, Obama took Nabors, the head of White House congressional relations, aside.

“Rob, I just wanted to let you know, this is what Boehner said to me.” The speaker thought they should get together, just the two of them, to see if there was something they could get done here. “So he’s going to come up to the White House.”

Obama seemed energized. Boehner was a type he knew well, he said. “He reminds me of people I worked with in Springfield, Illinois,” he told his inner circle, referring to his eight years in the state legislature. “John Boehner is like a Republican state senator. He’s a golf-playing, cigarette-smoking, country-club Republican, who’s there to make deals. He is very familiar to me.”

Nabors and others in Obama’s inner circle knew that the president believed that a large number of Boehner’s rank and file—the extreme Tea Partiers—were dangerously irresponsible.

“John’s just not going to be able to force these people,” Obama said. “You know, I have some sympathy for him.”

Several aides disagreed. Boehner might appear softer, but he was the political opposition. The speaker represented the problem, and they had to be careful.

“I have some sympathy for him,” the president repeated. “You see how crazy these people are. I understand him.” Boehner was not one of the crazies. “His motivation is pure.” He wanted to do the right thing. “He just can’t control the forces in his caucus now.”

Plouffe thought Obama had developed a soft spot for Boehner.

“We’ll see what comes of this,” the president concluded.

• • •

Nabors had spent a lot of time analyzing the House Republican conference, and had concluded that Boehner was struggling to find balance among four distinct constituencies: the “Paul Ryan folks” who wanted structural entitlement reforms; the Tea Party, who wanted to shrink government and slash spending at almost any cost, but didn’t really understand numbers and policy; the members who would face tough
reelection races in 2012, and didn’t want their fingerprints on legislation attacking popular entitlements; and the old guard, in safe seats.

In Nabors’s view, Boehner would never be able to balance the concerns of the Tea Party with the concerns of Republicans in swing districts. No matter what he proposed, Nabors told Obama and the White House senior staff, the speaker “was going to have people who were complaining that the cuts weren’t deep enough, or that they were misplaced, or that revenue was part of the equation.” On any proposal, Boehner would always lose a significant portion of his now 240-member conference. It was hard to come up with precise numbers, but clearly there were blocks of dozens or more that could sink any proposal.

• • •

On Tuesday, June 21, day 10, Biden told the Democrats that he had met with the president and they had agreed that they needed to have increased tax revenue. There could be no deal without it. But I want to present it in a way, he said, that doesn’t prompt a Republican walkout. It was sometimes “Kyl’s style,” he said, to just get up and leave, donning the cloak of shock and dismay. That kind of stunt could overshadow the important speech on the war in Afghanistan that the president would make the next day. “Make sure if there’s a walkout, it’s not before Thursday.”

Later, the meeting with the entire group was tense. There would be no cuts to Medicare, Biden began, unless there was an agreement on revenue. Period. He noted that McConnell had said on
Face the Nation
over the weekend that if the group did not tackle entitlement reform, “then we’ll probably end up with a very short-term” debt ceiling for only a few months.
⁹⁷
“And we’ll be back having the same discussion again in the fall.”

Biden wanted a debt ceiling extension that would take them through the 2012 election.

I agree with the vice president, Cantor said. McConnell might welcome another set of negotiations, but Cantor wouldn’t. Everyone knew the House Republicans were going to hate voting to increase the
debt limit, and some never would. The difficulty of rounding up his conference’s votes made Cantor eager to ensure he would only have to do it once.