Missed chances to seal budget deal early

AP News
Posted: Oct 19, 2013 3:56 AM
Missed chances to seal budget deal early

WASHINGTON (AP) — It always seemed likely that the partial government shutdown would end with a deal largely on President Barack Obama's terms. But that outcome wasn't preordained.

There was plenty of anxiety in the White House along the way, as well as opportunities missed by both sides. One came more than a week ago, when both Democrats and Republicans say the seeds of the solution were planted — a serious proposal from Republican House Speaker John Boehner — but they took nearly a week more to bear fruit.

Why so long? To be sure, big issues had to be ironed out. But the major problem with it and other offers was no doubt timing. The essential day for a deal was Thursday, so leaders wanted to get it done before midnight Wednesday night. And this was one of those many Washington fights where everyone would press for advantage until the final hours.

Senior administration officials and aides to congressional leaders described private conversations and certain pivotal closed-door moments to The Associated Press on condition they not be identified. Highlights in the progression of the standoff, resolved with a budget law that reopened government and raised the country's borrowing authority:


In retrospect, the tipoff that Washington's doings would get weirder and weirder came Sept. 24 on the Senate floor. From that historic chamber, designed for sober deliberation, the words rang out, a clarion call to, well, something. "Do you like green eggs and ham? I do not like them, Sam-I-am."

Ted Cruz's clock-busting quasi-filibuster, which detoured into Dr. Seuss to eat up time and give his daughters a bedtime story from afar, set the stage for a wild ride, a shutdown precipitated by demands from tea party conservatives like him to throw the nation's new health care program, that plate of green eggs and ham, out the window. Instead, Obama's health care law emerges in almost exactly the same shape as it was before.

As the Oct. 1 shutdown approached, aides say, Obama called former President Bill Clinton, in office during the last shutdown 17 years ago, to go over his experience leading a nation in financial peril on one hand while trying to outwit his political foes and work with them on the other.

The shutdown closed national parks, sent 800,000 federal employees home and left the political impasse in the hands of Republican and Democratic crisis managers who worked in largely cleared-out buildings, including the White House, where 80 percent of the staff was furloughed and those who were left had to pick up slack.

To lighten the mood, Obama jokingly offered to extend loans to his senior aides.

For months, Obama had insisted he would not negotiate over the debt ceiling as he had done in 2011. Nor was he interested at all in unraveling his health care law.

But as the debt ceiling approached its limit this week, meaning the government could no longer borrow money to pay its bills, angst took hold in the West Wing.

Treasury Secretary Jack Lew, senior economic adviser Gene Sperling and budget director Sylvia Mathews Burwell were veterans of budget deals and their instincts told them that at some point you sit down and hash out differences, senior officials said. Others wouldn't waver from the no-negotiation stance, among them Rob Nabors, the deputy chief of staff, and senior counselor Dan Pfeiffer. They urged sticking with the plan, which they argued was high risk, but high reward. Most important, Obama was firm on the strategy.

In one sense, the shutdown was breaking the Republicans' way. Vital services and more were maintained. Defense Secretary Chuck Hagel interpreted the laws governing the shutdown to mean he could bring back hundreds of thousands of civilian Pentagon employees to support the military personnel still on the job, so he did. Americans didn't like seeing their national parks closed, but states were finally able to reopen some on their own dime.

Who outside Washington would care if IRS audits stayed on ice?

The polls were tanking for the GOP nonetheless. And the debt deadline soon overshadowed everything. Leaders on neither side wanted to munch on a default, Sam-I-am.

Obama appeared to recognize that his unyielding stance might wear thin with the public. He signaled readiness to negotiate with Republicans on deficits and parts of the health care law, but only after they restored government finances and increased the debt ceiling. The tone changed. Sure, he would bargain now but not, as he saw it, pay ransom.



The public rhetoric was fierce during the impasse, almost all about blaming the other side, but privately there were overtures and a few held promise. These started to develop last week.

On Oct. 8, Obama made it known that he was open to a short-term extension of the debt ceiling and to negotiating with Republicans once that happened, "absolutely."

That was intended to give Boehner some wiggle room. He wiggled.

Later that day, Boehner's office called the White House. The speaker's aides wanted to know, what did the president have in mind?

On Wednesday of that week, the White House invited House Republicans to come over the next day. Boehner agreed, but wanted to bring only 20 or so Republicans, not all of them. The White House publicly complained that Boehner was limiting the attendance.

But the meeting that Thursday, with the smaller group, proved to be more useful than if all 232 Republicans had descended on the White House.

Two things intrigued Obama and the aides with him: Boehner had a serious plan to avoid default, and there were no longer any demands to undermine the health care law. Extending the debt ceiling was tied to a plan to hold official budget talks later among House and Senate budget negotiators. But the proposal did not satisfy one key insistence by Obama — it did not reopen the government. In the West Wing's Roosevelt Room, Obama pressed the Republicans to end the shutdown. They said they'd get back to him.

That evening two Boehner aides and two for House Majority Leader Eric Cantor of Virginia came to the White House and met Nabors. They proposed ending the shutdown and adding a total of $100 billion to the 2014 and 2015 budgets as long as that money was made up with savings over the next 10 years, in other words, easing up somewhat on the automatic spending cuts known as sequestration.

The plan would make up the additional money by increasing pension payments by federal workers and raising Medicare premiums for high income beneficiaries, among other measures.

White House officials deemed the offer serious and sincere.

But those steps, although they had been proposed by Obama himself in his budget, are unpopular with Democrats. The president thought he would need time to work with Senate Majority Leader Harry Reid of Nevada and House Democratic Leader Nancy Pelosi of California to build Democratic support. There wasn't time, in his view.

On Friday, Obama met Senate Republicans. The meeting displayed the fissures between the House and Senate GOP. The senators, one administration official said, made it clear that they did not like the position the House had put them in. They also acknowledged that reopening the government had to be part of the deal.

In a 15-minute conversation later that day, Obama told Boehner he couldn't do the deal the speaker had put forward. At least not without revenue increases to mollify congressional Democrats. Boehner said no dice to that, and informed his colleagues Saturday that the effort had failed.

Even so, Democrats saw the episode as a turning point. Some saw Boehner's offer a day earlier for a clean, six-week debt limit extension as a "blink moment," the first indication the GOP would not allow a default to happen despite loose talk about that prospect from some lawmakers.



By late last week, the universe of sticking points was relatively small. Republicans had given up trying to starve the health care law of money or making radical changes to it, largely abandoning the point of their fight. Instead, they wanted to repeal or delay a tax on medical devices, just one source of money for the health care overhaul, settle on how long a debt extension should be, lock in some existing spending cuts and achieve a few other things that could only be described as face-saving.

Sen. Susan Collins, R-Maine, was gaining traction as leader of a bipartisan group of 12 trying to come up with a solution. The White House grew concerned that Senate Democrats would give away too much.

That Friday evening, Obama aides called Democratic senators involved in the Collins effort and urged them not to sign off on it.

By Saturday, Reid had rebuffed the Collins plan. But he hinted at yet another opening as he and Senate Republican leader Mitch McConnell began direct talks. Obama gave his blessing to those talks without giving ground on the conditions for a deal.

McConnell, Reid and their "missionaries" to the other side — GOP Sen. Lamar Alexander of Tennessee and Democratic Sen. Chuck Schumer of New York — got hung up on disputes over spending. That cleared the way for one more round of Washington's favorite sport, a blame-fest on the Sunday morning talk shows.

Yet Sunday was when everything gathered steam, in a couple of phone conversations between Reid and McConnell. There were football games on television in Reid's suite of offices at the time. Reid was in his inner, personal office, where those who visited were offered a variety of pretzels, but no pizza. Several Democratic senators came in and out of the suite.

Reid and McConnell met in person Monday morning and the parameters of a deal were in sight by that evening.

Of course, it wasn't midnight Wednesday night yet. So let's have some more wrinkles.

International money people and business leaders were getting wide-eyed over Washington's game of chicken, wondering what had become of the world's financial bedrock.



At a House GOP meeting on Tuesday morning, Boehner told his colleagues they could wait for the Senate to produce a bipartisan plan "or we can go on offense" and pass something to send to the Senate, which he said he preferred.

"But he also made the point that it has to be reasonable," a GOP aide said. So Republicans set about drafting legislation that would embrace the emerging Senate plan but add minor changes to the health care law. Senators could only wait to see how that played out, with the Reid-McConnell talks now on hold. Democrats followed developments through their aides and through Twitter.

"There'd be staff in the room with members keeping track of the Republican gesticulations by watching various Twitter feeds throughout the day," said a Senate Democratic aide.

Boehner's gambit unnerved the White House. But by midday it was clear to Senate Republicans that the speaker didn't have the votes to move forward, just as the White House had predicted.

By late Tuesday, Reid and McConnell were back in charge of the effort, and very much no-nonsense about it. Tea party conservatives by now had been marginalized in the process and treated with increasing animosity by GOP colleagues. Cruz and company opted not to delay things any longer but to fight another day.

By Wednesday morning, the Senate deal was ready and the House was ready to buy it.

Senate Republicans gathered in the Strom Thurmond room, not far from McConnell's office. They spoke about the need to accept the compromise, move on and close ranks.

Illinois Sen. Mark Kirk, who had suffered a debilitating stroke a year ago and relies on a wheelchair to maneuver around the Capitol, said he wanted to speak and to stand when he did it. With the assistance of Collins, Kirk stood and talked about the deal. He then led the 45 Republicans in a round of "hip, hip, hooray for McConnell."

With midnight now fast approaching, but the outcome no longer in doubt, the Senate passed the plan by an 81-18 vote and the House followed suit, 285-144. It was soon in Obama's hands, and signed into law.

The government went back into business, borrowing authority was extended and budget negotiations were set up. Proposed changes to the health care law were watered down to practically nothing, a requirement that Health and Human Services Secretary Kathleen Sebelius produce a report stating that her agency is capable of verifying the incomes of individuals who apply for federal health insurance subsidies.

The truce, though, expires in mere months, with the government financed only through Jan. 15 and the debt ceiling looming again in February or March.

So a new chapter of Washington discord could soon be opened — perhaps a whole new children's book. Let's say, "Where the Wild Things Are."


Associated Press writer Alan Fram contributed to this report.