Obama’s evolution: Behind the failed ‘grand bargain’ on the debt

By Peter Wallsten, Lori Montgomery and Scott Wilson,March 17, 2012
(Page 4 of 6)

At the Capitol, the Republicans waited. Shortly after 6 p.m., Daley called Boehner’s office and said an update was on the way. None came, and four hours later, Jackson told his staff to go home. The White House, he said, was continuing to “massage their counter on all sections.”

The next morning, Nabors called Jackson with an ominous question: Have you heard about the Gang of Six?

Nabors was using the Beltway shorthand for a group of senators — conservatives and liberals — who had been working for months on a long-range deficit-reduction plan based on recommendations from a fiscal commission Obama appointed the previous year.

The group included Sen. Richard J. Durbin (D-Ill.), a close ally of the White House, and Sen. Saxby Chambliss (R-Ga.), one of Boehner’s dearest friends. Another participant, Sen. Tom Coburn (R-Okla.), was close to Obama and Boehner. The senators said they kept Boehner and administration officials informed about their work. They said the White House had been pressing them for months to put something out, believing that getting a few Republicans to sign on to any tax increase would build momentum.

“The fact that we had Republicans willing to discuss revenue was a breakthrough,” Durbin said. “That’s why [the White House] thought it might help move the conversation forward in the House.”

The Gang of Six was unable to seal its own deal. But that morning — a Tuesday — they finally revealed their work at a closed-door briefing for 64 fellow senators. Coming at that moment, it had an unintended effect.

Desperate to resolve the debt-limit deadlock, senators enthusiastically and publicly latched on to the proposal, which included more taxes and stronger protections for the poor and elderly than the still-secret Obama-Boehner framework. Dozens of senators emerged from the briefing praising the group’s work, including Republicans such as Lamar Alexander (Tenn.), then the third-ranking member of his party’s leadership team. The Gang of Six had “come to a bipartisan agreement,” Alexander told reporters, “and I support it.”

At the White House, Obama showed equal enthusiasm. He made a rare appearance in the White House pressroom, surprising reporters who had been awaiting the regular briefing from press secretary Jay Carney. As Carney stood to the side, the president hailed the plan as “broadly consistent with what we’ve been working on here in the White House and with the presentations that I have made to the leadership when they have come over here.”

In private, however, he and his aides were alarmed. The emerging deal with Boehner looked timid by comparison.

“The Democratic leaders already thought we were idiot negotiators,” Daley said. “So I called Barry [Jackson] and said, ‘What are we going to do here? How are we going to sell Democrats to take $800 billion when Republican senators have signed on to” nearly $2 trillion?

Daley added,“I don’t think it was a mischaracterization on our part to say we’d be beat up miserably by Democrats who thought we got out-negotiated.”

In lauding the plan quickly, Obama hoped to harness the enthusiasm for it on behalf of his own talks. But his appearance that day caused more problems by increasing suspicions among conservatives about the group’s framework — and boosting their distrust of any bipartisan dealmaking.

Coburn, a staunch conservative and the only member of his party who openly acknowledged the need for higher taxes to balance the budget, had developed a close personal bond with Obama dating to their shared opposition to federal budget earmarks when both were senators. But Coburn was “shocked,” he said later, when he saw Obama’s remarks that day on television. His effusive praise for the Gang of Six, Coburn believed, was a tactical mistake that revealed Obama’s inexperience in the ways of Washington. It signaled to skittish conservatives that a tax hike was on the way.

Obama’s announcement, Coburn said in an interview, “absolutely killed anything we were doing with the Republicans.”

That afternoon, with concern mounting in the West Wing, Nabors called Boehner’s office with a message from the president: He still wants a deal.

Obama had empowered the aide who knew the Hill best to try to pull it out. Shortly before 7 that evening, he sent a new proposal that, Republicans said they were told, had not been vetted by other senior advisers at the White House. It was his own pitch, underscored by its title: “Deficit Reduction Package — Nabors Draft.”

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