Showdown: The Inside Story of How Obama Battled the GOP to Set Up the 2012 Election

347 Pages·2012·13.48 MB·English

by  David Corn

SHOWDOWN
The Inside Story of How Obama
Fought Back Against Boehner,
Cantor, and the Tea Party
David Corn
Dedication
For Welmoed, Maaike, and Amarins
Epigraph
It is silly not to hope.
—ERNEST HEMINGWAY, THE OLD MAN AND THE SEA
Contents
Cover
Title Page
Dedication
Epigraph
Introduction: Bending the Arc
Chapter One: Before the Shellacking
Chapter Two: The Deal That Worked
Chapter Three: A Complete Win
Chapter Four: A Quiet Victory
Chapter Five: The Strategy
Chapter Six: Leaning Forward
Chapter Seven: The Battle Begins
Chapter Eight: Leading from Behind the Scenes
Chapter Nine: The End of the Beginning
Chapter Ten: Mission Accomplished
Chapter Eleven: Return of the Hostage Takers
Chapter Twelve: The Big Cross
Chapter Thirteen: Obama Unleashed
Chapter Fourteen: The Battle Ahead
A Note on Sources
Index
Acknowledgments
Photo Section
About the Author
Also by David Corn
Credits
Copyright
About the Publisher
Introduction
Bending the Arc
IT WAS THE FIRST SATURDAY MORNING OF DECEMBER 2010. President Barack Obama
was in the Oval Office with Vice President Joe Biden, surrounded by his top
aides: message guru David Axelrod, press secretary Robert Gibbs, acting chief
of staff Pete Rouse, longtime friend and adviser Valerie Jarrett, Treasury
secretary Timothy Geithner, National Economic Council chief Larry Summers,
budget director Jack Lew, economic adviser Gene Sperling, and others. Once
again, the nation’s chief executive had a tough presidency-defining decision to
render.
A month earlier, Obama had experienced what he had accurately dubbed “a
shellacking” at the polls: in the first midterm elections of his presidency, the
Republicans had won sixty-three seats in the House of Representatives, seizing
control of that body. In the Senate, the GOP had also advanced, cutting the
Democrats’ edge by two-thirds. With unemployment still terribly high—the
ongoing result of the financial collapse that had occurred during George W.
Bush’s administration—the president and his Democratic comrades had been
soundly repudiated by the voters, with an electoral loss greater than many
observers had predicted and far worse than Obama and his team had anticipated.
Whatever ideas Obama had for bolstering the still-flagging economy, for
funding his preferred public investments for the future, for responding to climate
change and other challenges, the House Republicans—dominated by the
extremist, Obama-hating Tea Party wing of their party—would be there to thwart
him.
Yet the president was determined to demonstrate that he was still a leader who
could deliver results and, yes, hope. And this weekend morning, he and his aides
had gathered in his office to consider a private—and politically risky—proposal
the vice president was bearing.
FOR MONTHS, A BATTLE HAD BEEN BREWING OVER A FUNDAMENTAL political and
policy question: Should wealthy Americans, at this time of economic peril,
continue to receive the generous tax-cut bonus Bush had awarded them in his
first term? The Bush tax cuts were due to end on December 31, 2010. If Obama
and Congress did nothing, taxes would not only go up on the wealthy—but also
on middle-class Americans covered by the Bush cuts. That would cause personal
hardship for millions of Americans. Worse, Obama and his economic team
worried, this would likely damage the tenuous economic recovery that was
sputtering along.
Obama had been unambiguous: he favored continuing the lower rates for
middle-class earners, and allowing the top-income rates to return to the pre-Bush
levels of the 1990s (when the economy was zipping along rather well).
Smothering the Bush tax cuts for the well-to-do had been a prominent promise—
and a major applause line—during his 2008 run for the presidency.
But the filibuster-wielding Republicans were not interested in decoupling the
middle-class cuts from those for the rich. They wanted to see all the Bush tax
cuts extended. They were willing to hold the middle class hostage: no cuts for
these Americans, unless the extra breaks for those making over $250,000 a year
continued—even if the tax cuts for the rich would add an estimated $700 billion
to the deficit over the coming decade.
Obama knew many of his Democratic allies on Capitol Hill and progressive
activists and commentators were spoiling for a fight—particularly in the
aftermath of the midterms debacle. Such a confrontation would define the
difference between the parties; it could revive Democratic prospects. If it could
be won. Obama and his aides had long wondered whether enough House and
Senate Democrats would stand fast in this sort of face-off and resist the
hackneyed GOP charge that Democrats favored tax hikes. Not likely, Obama and
his crew had concluded. They assumed a standoff would probably be lost due to
Democratic weakness. (“There’s one thing I know,” Biden told the president
more than once, “and that’s the Senate, and I’ve never seen the Democrats hold
all together on a tough tax vote.”)
Another factor was shaping Obama’s thinking: he was the president of all
Americans—even those who had not voted for him—not merely the leader of a
political party. He had to take into account the immediate well-being of millions
of citizens. He was playing dice with their money—and he was reluctant to
gamble on a fight that could end up with no agreement and, consequently, higher
tax bills for middle-class workers. The imperatives of governing, he knew too
well, don’t always line up with those of politics.
And this dilemma was nothing new. “In the first two years of the
administration,” a former senior Obama White House official later said, “there
was a split between those who believed in fighting for things even if you know
you’re going to lose and those who said get the best thing possible passed. As for
the president, he really is a stone-cold progressive. But he believes you have to
get stuff done.”
The president was aware of the rap on him. He realized that if he cut a deal, he
would be accused of capitulating to political terrorists, of being too enamored
with consensus building, of rewarding the bad behavior of the Republicans who
had been trying to derail his presidency from the first moments of his
administration. He would be called a sellout.
Polls showed that most Americans supported ending the Bush tax-cut bonus
for the most fortunate. But Obama was operating within a conservative and
hostile political environment that would soon be more conservative and more
hostile to him and his policies. His approval ratings were not strong, and the
recent elections had created a sense of political momentum for the opposition.
In previous meetings, Obama had told his aides: if you can outline a path for
me in which a bare-knuckles political fight yields a better outcome for the
Americans we most care about, I’ll choose that course. No one spoke up. They
all realized that in a few weeks’ time, the Republicans would be running the
House. Winning a legislative battle over taxes—or anything else—at that point
would be nearly impossible for the White House.
The president was at the intersection of crosscutting currents. He had an
obligation to govern and do right by most Americans. He had a campaign
promise to keep—one based on a principle he held dear. And he had his own
political future to consider, while meeting his obligation to lead the besieged
Democratic Party into what appeared to be an uphill 2012 battle.
Progressives could howl about yielding ground to the Republicans on Bush’s
tax cuts. But the biggest setback for liberals would be a Republican in the White
House in 2013. Forging a compromise with obdurate GOPers might well prevent
the economy from worsening—a necessary condition for Obama’s reelection—
and improve the president’s standing among the crucial block of independent
voters, many of whom had become skeptical of the president and his policies.
Obama remained caught between the two halves of his political base:
independents looking for a nonpartisan leader who could stay above the fray and
force Washington to do its business and progressives yearning for an ideological
champion who would charge into that fray, dispatch his Republican foes, and
triumph. Obama could not satisfy both groups at once—especially while dealing
with opponents he publicly likened to hostage takers.
The president—at this juncture—was leaning toward cutting a deal. But he
had an idea: if the Republicans were holding middle-class tax cuts hostage, he
would hijack the entire tax-cut fight and exploit it to advance progressive
policies that assist middle-class families and juice up the economy. While the
rest of the world would be watching a scuffle over the Bush tax cuts, Obama
would be maneuvering on a different field—a field, for better or worse, not
widely recognized. He was aiming not for a zero-sum political victory—denying
the Republicans their cherished tax breaks for the well-heeled. His goal was a
victory he couldn’t otherwise achieve: more federal support for financially
stressed-out Americans and hundreds of billions of dollars in another shot of
stimulus for the economy. But, he would tell aides, don’t use the s-word. It was
as if he had a secret.
THAT SATURDAY MORNING, BIDEN PLACED BEFORE OBAMA AN offer from Senator
Mitch McConnell, the top Republican in the upper chamber, for a tax-cut deal
that included preserving the high-end breaks, and Obama had to make a call:
whether or not to pursue a compromise that would require him to concede on a
matter of principle in order to gain on grounds of policy.
In the Oval Office, Obama was surrounded by reminders of Martin Luther
King Jr. He had placed a bust of the inspiring civil rights leader on a table across
the room from his desk. On the wall was a gift from a friend: a framed program
from King’s famous 1963 March on Washington, where he had proclaimed, “I
have a dream.” On the floor was a rug that included a saying King often cited:
“The arc of the moral universe is long, but it bends toward justice.” These were
not totems of political compromise. Yet as the president and his closest advisers
in this room evaluated the McConnell offer, they were contemplating yielding to
Republican intransigence—albeit to achieve a higher goal.
In a 2004 interview, Obama, then running for the US Senate, had explained his
days as a state senator bent on concocting strong compromises: “You can’t
always come up with the optimal solution, but you can usually come up with a
better solution. A good compromise, a good piece of legislation is like a good
sentence. Or a good piece of music. Everybody can recognize it. They say, ‘Huh.
It works. It makes sense.’ That doesn’t happen too often, of course, but it
happens.”
Obama was now trying to write a symphony. He was aiming for a compromise
—to help those millions of Americans, to do what he could to bolster the