Dan Pfeiffer, the White House communications director, recalled that the president and his team felt the weight of the global economy “on our shoulders.”
“Is there political benefit to coming to a big budget deal with John Boehner? Sure,” Pfeiffer said. “But every other political and message imperative was thrown out the door to prevent a disaster and do the right thing for the country. That’s why we were willing to do things we wouldn’t normally do.”
Reluctantly, Reid and Pelosi agreed to do their best to support the plan.
Boehner, meanwhile, had gone dark.
The House speaker did not return Obama’s call until 5:30 p.m. the next day, a Friday, when he told the president that he was again breaking off the talks. The two men staged dueling news conferences. Obama said angrily that he had been “left at the altar” again. Boehner said dealing with the White House was “like dealing with a bowl of Jell-o.”
“There was an agreement with the White House for $800 billion in revenue,” Boehner told reporters. “It was the president who walked away from this agreement.”
Two day later, July 24, one week after the Sunday morning meeting that sparked such optimism, the president found himself trying to turn back the clock.
Working late into the evening, Obama asked someone to get Boehner on the phone. His message: I’ll take your last offer.
“Mr. President,” Boehner answered, “we don’t have time to reopen these negotiations.”
White House officials said this week that the offer is still on the table.
The following night, Obama delivered a prime-time address from the East Room to update Americans on the status of the talks. He left no doubt about whom he intended to blame for the failure of the grand bargain.
The only reason a deal is not on its way to becoming law, he said, “is because a significant number of Republicans in Congress are insisting on a different approach — a cuts-only approach — an approach that doesn’t ask the wealthiest Americans or biggest corporations to contribute anything at all.”
In the following days, congressional leaders and Obama worked out a bare-minimum agreement to lift the government’s borrowing limit just enough to get past the election.
The tough choices on deficit reduction were handed to a special House-Senate “supercommittee,” and if that group failed to secure legislation by the end of 2011, then the deal required $1.2 trillion in automatic, across-the-board cuts to agencies, including the Pentagon.
Although Obama had denounced “kick the can down the road” deals as a candidate in 2008, he was now adjusting to the realities of his office. The agreement was at least a tactical victory. He used it to wash his hands of Washington’s dysfunction, presenting himself as a well-intentioned man unable to secure a fair deal, because of the capital’s enduring partisanship.
But White House advisers conceded that the collapse of the debt talks was a disaster from a policy perspective and, at least in the short term, from a political one. For the first time, Standard & Poor’s, the credit rating agency, downgraded U.S. debt. Polls showed that the public blamed Obama as well as congressional Republicans, with approval ratings for both reaching new lows.
In mid-August, Obama escaped for a week of golf and relaxation with his family on Martha’s Vineyard. He reviewed his strategy, concluding that it was time for a dramatic shift in approach. With the debt-ceiling debate over, he would focus more fully on jobs, the chief concern of most Americans, including his Democratic base.
At the White House, economic advisers who had devoted so much time to meeting with House Republicans now turned their attention to drafting the American Jobs Act, a package that would extend a temporary payroll tax holiday, provide fresh money for roads and bridges — and set up a new confrontation with Republicans.
“You say you’re the party of tax cuts? Well then, prove you’ll fight just as hard for tax cuts for middle-class families as you do for oil companies and the most affluent Americans,” Obama said to thunderous applause at a Labor Day speech in Detroit. “We’re going to see if congressional Republicans will put country before party.”
Suddenly, the same Democrats who had accused Obama of meekness in negotiating with the GOP were praising his aggressive new tone. What happened during those days in July when the grand bargain was almost reached, but not quite, had changed him. He no longer seemed divided.
His goal now was unequivocal: to win a second term.