A combination of miscalculations, ideological rigidity and discord within the leadership of both political parties brought the U.S. government to the brink of a catastrophic default during the 2011 showdown over the federal debt ceiling, according to a new book by journalist Bob Woodward.
"The Price of Politics," Woodward's 17th book, chronicles President Obama's contentious and still unresolved fiscal policy battle with congressional Republicans that dominated the White House agenda for nearly all of 2011. The book is scheduled for release on Tuesday. Woodward is a Washington Post associate editor.
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As the nation's leaders raced to avert a default that could have shattered the financial markets' confidence and imperiled the world's economy, Obama convened an urgent meeting with top congressional leaders in the White House. According to Woodward, House Speaker John Boehner pointedly told the president that the lawmakers were working on a plan and wouldn't negotiate with him.
Obama, surprised, told Boehner and the others that they could not exclude him from the process, Woodward reports.
"I've got to sign this bill," he is quoted as saying.
Senate Majority Leader Harry Reid then said the four leaders wanted to speak privately, asking Obama to leave a meeting he had called "in his own house," in Woodward's words. The president, fuming, agreed to let them talk.
"This was it," Woodward writes. "Congress was taking over."
Congress's reemergence as a political force is one of the book's underlying themes. For decades, Capitol Hill has been ceding influence and authority to the White House, especially to presidents who were bent on expanding the powers of the executive branch. In Woodward's account, the balance of power has shifted at least temporarily back to the legislative branch during the past two years, aided by the Obama administration's failure to nurture the alliances that it needed to offset the GOP's huge victory in the 2010 midterm elections. The Republicans took control of the House, claiming 63 new seats, the largest turnover since the 1930s.
The book points out that the administration seemed unprepared for the road ahead, as demonstrated on election night in 2010. "Protocol dictated that the president make a congratulatory call to Boehner," Woodward writes. "The trouble was, nobody in the White House had thought to get a phone number."
The timing of the book's publication, with just two months left before Election Day, may pose more of a challenge for Obama than Mitt Romney, the Republican nominee. The president and his White House team occupy center stage in Woodward's account, along with Boehner, while Romney has no role in the events covered by the book.
Woodward's portrait of Obama, sketched through a series of scenes from meeting rooms and phone calls, reveals a man perhaps a bit too confident in his negotiating skills and in his ability to understand his adversaries. Obama is described as believing that he had a particular bead on the motivations and temperament of Boehner, now in his 11th term as a House member from a district in southwest Ohio.
The two men engaged in secret talks for several weeks in July 2011 as they attempted to resolve the stalemate over raising the federal debt ceiling, then set at $14.3 trillion. Boehner was seeking large spending cuts as part of an overall deal. Obama wanted the Republican to agree to new revenue. Without the authority for new borrowing beyond the $14.3 trillion limit, the government would immediately run out of cash to pay its bills and debt.
By Woodward's account, Boehner fit a type that Obama believed he knew well from his eight years as a state legislator in Illinois.
"John Boehner is like a Republican state senator," the president tells his inner circle, according to Woodward. "He's a golf-playing, cigarette-smoking, country-club Republican who's there to make deals. He's very familiar to me." Obama's advisers felt the need to warn their boss that he was underestimating the political risks of dealing directly with the GOP leader.
The president, bent on making a "grand bargain" with Boehner on deficit reduction, is characterized as sticking to a kinder and gentler view of his negotiating partner.
"His motivation is pure," the president told his aides. "He just can't control the forces in his caucus now."
Boehner sized up his adversary during one of his early private meetings with Obama, telling Woodward: "I just started chuckling to myself. Because all you need to know about the differences between the president and myself is that I'm sitting there smoking a cigarette, drinking merlot, and I look across the table and there is the president of the United States drinking iced tea and chomping on Nicorette," the gum for smokers trying to break their habit.
Boehner says, in his interview with Woodward, that his first pullout from the secret talks was a strategy intended to "rattle the president a little bit into being serious." Obama succeeded in getting Boehner to tentatively agree to as much as $800 billion in new revenue, a major concession, only to surprise the speaker with a request for an additional $400 billion as their negotiations neared the final stages. Unable to muster support among his lieutenants for such a proposal, Boehner ducked the president's phone calls before pulling out of the talks for good.
Obama reacted angrily to Boehner's refusal to take his calls, according to Woodward, telling the speaker when they talked next: "That's not a reason to cut off the conversation. I asked you to consider it. And you never got back to me." "He was spewing coals," Boehner told Woodward in the interview.
In his final chapter, Woodward faults both Obama and Boehner for their handling of the fiscal crisis, concluding that "neither was able to transcend their fixed partisan convictions and dogmas. Rather than fixing the problem, they postponed it. When they met resistance from other leaders in their parties, they did not stand their ground."
He has tougher words for Obama. "It is a fact that President Obama was handed a miserable, faltering economy and faced a recalcitrant Republican opposition," he writes. "But presidents work their will - or should work their will - on important matters of national business. ... Obama has not."
Lengthy narratives exploring the collapse of the Obama-Boehner talks have appeared previously in several news outlets, notably The Post and the New York Times Magazine. Woodward's book covers that terrain as well but also breaks new ground with a detailed account of how the two sides reached the agreement now being called the "fiscal cliff" - because it will trigger large automatic spending cuts at the end of the year, unless Congress acts to change the law.
Woodward's account - based on interviews with Obama, Boehner and others, as well as participants' meeting notes - often shows how the rough-and-tumble nature of Washington politics has left not only bruised egos but also lingering resentment within both parties.
For example, in 2010, the Democratic congressional leadership wanted Obama to stand fast against a Republican call for a two-year extension of George W. Bush-era tax cuts. Obama decided to go along with an extension. Woodward quotes an angry Reid as telling the White House: "You go sell it. Not my deal, not my problem. ... Hope you can line up the Senate Democrats behind you because I'm not going to."
Woodward also documents the disarray inside the House Republican caucus, particularly the depth of distrust between Boehner and House Majority Leader Eric Cantor. Boehner kept Cantor in the dark about his secret talks with Obama, Woodward reports. At the same time, Cantor was meeting - on the speaker's instruction - with a bipartisan group led by Vice President Biden, trying to work out a deal.
When Cantor learned from Biden about the covert Boehner-Obama negotiations, he felt "lied to," according to Woodward. "I get more information out of Joe Biden than I do my own speaker," the majority leader is quoted as saying.
Similarly, Woodward quotes Obama as complaining openly to his aides about Reid and House Minority Leader Nancy Pelosi, his main Democratic allies on Capitol Hill. "The one thing that I said I actually needed, they didn't get," he fumes to his advisers as he tries to avoid a plan that would raise the debt ceiling enough to cover a few months. "I needed this to go past the election, and they didn't get it for me."
Boehner, Cantor and other Republicans were insisting that they would agree only to a short-term deal. An angry Obama told his aides, according to Woodward: "It's hijacking the economy, putting a gun to the head of the economy." In his interview with Woodward, the president confirmed that he was adamant in his opposition to a "two-step" deal. To give in, he said, would hand the Republicans a permanent weapon. "We can't do business by threatening to default every three months."
The book portrays Obama as a man of paradoxical impulses, able to charm an audience with his folksy manner but less adept and less interested in cultivating his relationships with Reid and Pelosi. While the president worries that he can't rely on the two leaders, they are portrayed as impatient with him. As the final details of the 2009 stimulus package were being worked out on Capitol Hill, Obama phoned the speaker's office to exhort the troops. Pelosi put the president on speakerphone so everyone could hear.
"Warming to his subject, he continued with an uplifting speech," Woodward writes. "Pelosi reached over and pressed the mute button. They could hear Obama, but now he couldn't hear them. The president continued speaking, his disembodied voice filling the room, and the two leaders got back to the hard numbers." In the same vein, Woodward portrays Obama's attempts to woo business leaders as ham-handed and governed by stereotype.
At a White House dinner with a select group of business executives in early 2010, Obama gets off on the wrong foot by saying, "I know you guys are Republicans." Ivan Seidenberg, the chief executive of Verizon, who "considers himself a progressive independent," retorted, "How do you know that?" Nonetheless, Seidenberg was later pleased to receive an invitation to the president's 2010 Super Bowl party. But he changed his mind after Obama did little more than say hello, spending about 15 seconds with him. "Seidenberg felt he had been used as window dressing," Woodward writes. "He complained to Valerie Jarrett, a close Obama aide. ... Her response: Hey, you're in the room with him. You should be happy."
The book also offers an inside account of the weeks-long bargaining sessions that Biden oversaw as part of the administration's effort to end the debt-ceiling stalemate. The vice president's back-channel relationship with Senate Minority Leader Mitch McConnell proved crucial to the ultimate legislative deal that staved off default, according to the book. White House aides are said to refer to Biden, a former senator, as the "McConnell whisperer." At the Biden meetings, the two sides identified more than $1 trillion in spending cuts, but stalled on the issue of additional revenue. Obama wanted the Republicans to drop their long-standing opposition to any new taxes as part of what Obama called a "balanced" approach to deficit reduction.
Cantor warned Biden that many new House Republicans were willing to risk a default in their zeal to reduce government spending, telling the vice president: "We really have members who don't get the need to raise the debt ceiling." "So you're looking for Democrats to be more responsible than you?" Biden said. "You can't use the irresponsibility of your own members to get your way."
Cantor is quoted as replying: "Why don't you just say it's the crazy Republicans made you do it?"
Woodward, 69, has written books on the inner workings of presidential administrations going back to the early 1970s. His work with Carl Bernstein in breaking the Watergate story prompted investigations that led to the 1974 resignation of Richard Nixon, the first president in U.S. history to quit the White House.