The Price of Politics (37 page)

“Our guys want something real,” Cantor said. They wanted an ironclad enforcement mechanism. “How do we ensure that it happens?”

No one had an answer.

“Decoupling is a huge issue for our guys,” Cantor continued. The trigger was unbalanced because Obama wanted decoupling in the trigger. If everyone has what is most important to them in this trigger, then everyone is motivated to get this done, he said.

“Tax hikes are bad politics for us,” Obama said.

The Republicans did not believe this, especially Cantor. If so, why were the tax hikes on the wealthy the very centerpiece of Obama’s political attack? For Cantor and Boehner, the claim was phony.

“The debt limit is the ultimate solution,” Boehner repeated.

“No,” the president said sharply. “Can’t do that.”

“I would bet anything,” Biden said, “if there were secret polls of Democrats, they would say you Republicans would trade decoupling for the repeal of health care reform.” Getting rid of health care reform would be too big an incentive for you guys. In other words, you’re asking for too much. During his meetings with Cantor in the spring, they had taken those issues off the negotiating table.

“I think this is constructive,” the president said. “The trigger needs to be decoupling.” If it went off, the Bush tax cuts for the rich would expire—anathema to the Republicans. “Medicare is not enough for you.”

Boehner said, hey look, cuts in Medicare aren’t exactly great for us.

“You have asked us to come up with something you think is painful for us,” the president continued.

“The logic behind the trigger was equal pain,” Lew said.

“The trigger right now looks like you’ve been set on fire and stabbed,” Obama said.

Laughter.

The Democrats had it better, he conceded. “We have just been set on fire.”

More laughter.

“I think there’s a way to do that creatively.” So they needed to find something to add to the trigger that would stab the Democrats also. “Is there a way to work on the trigger?” A scalp for a scalp? He suggested that their staffs work on it.

“Both of you have been very solid in these negotiations,” Obama continued, complimenting Boehner and Cantor. “And I know it’s been hard. Some of your guys are unreasonable.” He said nothing about his own guys. “We’re running tight on time. John, how are you going to roll out?” The president was talking optimistically, as if it was all or mostly done. How would they publicly describe the deal and some of its components?

He had one request. “Help us say that the economy is not going to be in danger.”

It was an unusual moment. On one hand, it was an appeal to the high purpose of his office and theirs to serve the larger national interest by helping him build and hold confidence. They would collectively reassure the markets, investors, businesses, and not least, the credit rating agencies, Moody’s and S&P. It sounded high-minded. But it was also personal, because everyone in the Oval Office realized precisely what Obama needed to win reelection: public confidence that the economy was strong and wasn’t on the verge of collapse.

Boehner turned to the next year’s discretionary cuts to education, transportation and domestic spending, hoping to cut additional billions more.

“We want 1.040,” he said, meaning $1 trillion 40 billion.

Obama jumped into the auction, wanting 1.048—$8 billion more. “I can’t go to 1.040. Let’s not nickel-and-dime each other, John.”

Boehner said that $1.048 would not work.

“How about 1.045?” Lew suggested, adding another nickel.

Agreement was not reached.

It was almost funny. With the economy nearing disaster, the president, the speaker and the House majority leader needed to reach agreement on a deal involving trillions of dollars. But they couldn’t reach token accord when positions differed by only $8 billion.

“All right guys,” Obama said, “let’s work on the trigger. See how creative we can get.” Cantor interpreted this to mean, I’m keeping decoupling in there. Let’s see what else you need to get there, but it’s not going to be Obamacare.

The president continued, Work on the $150 billion cut in non-Medicare
health programs. Let’s work on the overall discretionary number, the Medicare doctor fix, unemployment insurance, and the payroll tax cut, which will expire at the end of the year.

And the all-important revenue number. Go work on it, guys.

• • •

Driving away from the White House, Boehner and Jackson had two questions. What was the president trying to do here? Are we being gamed or not? Neither had answers. Boehner indicated he was trying to balance the interests and keep working the two tracks: one with Obama and the other with the Senate leaders.

• • •

After the meeting, Biden pulled Cantor aside and hustled him down to his office. He thought of Cantor as his contact, even his guy, in the House Republican camp, much like McConnell in the Senate. They could talk candidly.

“I trust you, Eric,” Biden said. “You trust me. We’ve developed this relationship.” I think we’re close on a deal. Let’s keep the line of communication open, let’s not screw this up now.

Cantor could see a path to agreement. If he could get Obamacare into the trigger—and he was very skeptical—it was possible that he could deliver the Republican conference, or enough of it.

Would the administration really buy into an Obamacare trigger? Cantor later asked Stombres and Bradley.

Probably not, Stombres said. It was a fantasy. By discussing it, even seemingly putting the Bush tax decoupling and Obamacare on the table, they had identified the red lines for both sides. Didn’t that really mean, let’s talk about something else, find some other trigger that would not go over a red line? By defining where they couldn’t go, they might figure out where they could, he added hopefully.

Cantor said it was clear the president was not open to doing Obamacare—his signature achievement. But he seemed to comprehend the political need of the Republicans. As a practical matter, Cantor could sell repeal of Obamacare or of its major parts to his
members, but nothing else. But Obamacare in the trigger was just not going to happen.

The stakes were high for Cantor. Now that he had been brought back into the direct talks with the president, the tom-toms would start beating. Was he challenging Boehner? He concluded that if Obama and Boehner were committed to this big deal—and they seemed to be, even overly so—he would have to do everything possible to fall in line and help them get it. He could not be seen as the spoiler. So, he asked, how could he make the most of it, help get a deal that would upset the fewest of his members while still getting the necessary votes? All without violating the core anti-tax principle?

Though he was now majority leader, Cantor had never abandoned the habit, developed during his two years as Republican whip, of constantly staying in touch with the rank and file of the Republican conference. He had every member’s contact information stored in his BlackBerry, and he emailed them constantly. Communication flowed both ways. Members came to understand that they were free to contact Cantor by email on almost anything, and that they could often expect a response within a few minutes.

His initial conclusion was that this $1.2 trillion would not fly. At the Capitol that night, he went to Kevin McCarthy’s whip office, where a big buffet of Chinese food was laid out for Republican members. The buffet was a routine for nights like this one, when the House had late votes. Cantor took McCarthy, Ryan and Hensarling aside. This trio was the key. As whip, McCarthy knew the members better than anyone. Ryan was the bellwether for policy in the conference. And Hensarling, the No. 4 in leadership, had been chairman of the Republican Study Committee, an influential group of more than 170 conservative House Republicans.

Cantor told them that the speaker was getting too far out in front. The White House was floating a revenue number of $1.2 trillion. It seemed impossible to him, he said, but he didn’t want to be the lone objector. “Tell me I’m not crazy.”

All three said they agreed. He was not crazy. The number was too big to camouflage with tax reform.

So here was the bind, Cantor said. What if the speaker went for it? What would they do? Boehner talked tough in private but down at the White House he was acting as if they were on track. The speaker was like a runaway horse, he said. How best to pull back on the reins?

No one had an answer, and soon staffers from the speaker’s office began asking about the meeting that Cantor was having in the whip’s office.

• • •

The president called some Senate Democrats after the meeting to bring them up to date. They were getting anxious, not being part of the direct negotiations.

With $800 billion in revenue, the president said they would have to accept moderate entitlement cuts. But if the revenue could be increased to $1.2 trillion, they would wind up with significant entitlement cuts.

N
abors gathered key White House and Republican staff around the table in his large West Wing office the next morning, Thursday, July 21. Lew, Sperling and Bruce Reed, Biden’s chief of staff, represented the president. Jackson, Brett Loper, Steve Stombres and Neil Bradley, Cantor’s main policy staffer, spoke for Republicans.

We don’t think we can get any more votes, Nabors said. We’re going to need more revenue in order to convince more Democrats, and you’re going to need more entitlement cuts to convince more Republicans. The $800 billion was not enough to get the Democratic votes they would need in the House. They needed $400 billion more in revenue, for a total of $1.2 trillion.

No one said yes, no one said no, but it sounded positive to the White House people. Jackson and the other Republican staffers said the revenue issue was way above their pay grades. It would be decided by Obama and Boehner.

They cleared away some underbrush, such as Pell Grant reforms. Left on the table was the trigger, though Cantor’s staff said that if Obama wanted decoupling to be part of it, their boss would require that some major portion of Obamacare be included. That was the only plausible way to sell it to his members.

They turned to the Medicare age increase. It would be raised eventually over time to 67.

Yes, okay, everyone seemed to agree.

When would it start? In 2022 as Obama wanted? Or 2017 as Boehner proposed?

Well, they would have to work that out.

When would they eventually reach age 67? In 2046 as Obama wanted? Or 2029 as Boehner did?

That would have to be worked out also.

It seemed a century away to Jackson, and there was no agreement. He thought they were bypassing all the important decisions.

Nabors said the prospective deal was about four matters—Medicare, Social Security, Medicaid and revenue. As they went through them they were a little skittish.

“This is above all of our pay grades,” Nabors said. “Let’s just put that off on the side and keep working through the details.” All four major issues would be left to Obama and Boehner. So they tackled some small things and seemed to reach agreement and took some steps on writing actual legislation. They discussed timing. Under House rules, legislation had to be publicly available for three days, so they looked at a calendar to calculate how much time was available.

“If we do this deal,” Jackson said almost conspiratorially, “you guys have to wait till after the vote before you start describing it as raising $800 billion.” If they did that, it was a deal breaker.

At one point Jackson accused Nabors and the White House of engineering the Gang of Six’s decision to come out with their vague plan two days before.

“I don’t know how you can say we engineered it,” Nabors replied. “The speaker’s best friend”—Chambliss—“is on the Gang of Six.” Republicans must have known or been involved somehow.

We were surprised, Jackson insisted.

Lew and Nabors were scheduled to speak to the Democratic Senate policy lunch that afternoon. The weekly meeting of the Senate
Democratic caucus was an important communications forum for the White House.

“I’m only leaving now because I have to be up on the Hill,” Lew said as he got up to leave. He was being served up as the administration’s “sacrificial lamb,” he added grimly.

Jackson turned to Lew. “We all agree we’re going to get to yes, right?”

Yes, Lew said.

The meeting ended after two hours. A good meeting, thought the Democrats. It seemed like they had accomplished a lot, and Jackson’s insistence they get to yes seemed to be a tip-off.

But there was no feeling of accomplishment on the Republican side. Cantor’s staffers, Stombres and Bradley, and Boehner’s, Jackson and Loper, felt the meeting was unproductive and that they were still not close to a deal.

Loper, in particular, was extremely pessimistic. They had been near a deal on Sunday. Then on Tuesday, the Gang of Six came out. Who cared what six senators were saying? Not Loper. Their math didn’t even add up. The power was with the president, the speaker and the Senate. The Gang of Six was not a reason to step away from the deal. Maybe it was an excuse? he wondered.

Jackson, who was the most bullish on a deal because Boehner wanted one desperately, left thinking, perhaps for the first time, that they would not get there. He gave his assessment to Boehner.