The New New Deal (27 page)

“On some of these issues, we’re going to have ideological differences,” Obama said. “Elections have consequences. And Eric, I won.”

He said it in a lighthearted way. “We took it in jest,” Cantor recalls. But “I won” became a rallying cry for Republicans, “a real shirts-and-skins moment,” as one GOP aide put it. When Cantor later described the scene in print, he claimed Obama’s message was: It’s my way or the highway.
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Deal with it.

“The ‘post-partisan’ president sure had a big partisan streak,” Cantor wrote.

A
t the time, House Republicans avoided attacking Obama publicly.

Oh, they didn’t dare criticize Limbaugh for declaring he wanted Obama to fail; their base would have crucified them. (One Republican congressman who said Limbaugh should “back off” set off such a firestorm he had to apologize the next day for his “stupid comments.”
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) But GOP leaders pointedly contrasted the president’s soothing words with the actions of “Washington Democrats.” They praised Obama’s commitment to timely, targeted, and temporary stimulus, sighing that they were so sorry that Pelosi, Obey, and Rangel had defied him by loading up the Recovery Act with pent-up liberal demands. They quoted his rhetoric about bipartisanship, accusing House Democrats of undermining him by writing the bill without Republican input. The speaker provided the perfect talking point for these gripes during her first press conference of the Obama era.

“Yes, we wrote the bill,” she said. “Yes, we won the election.”

Both Obey, who wrote the spending section, and Rangel, who wrote the tax section, say Republicans declined their invitations to participate. But the result was a partisan process. There were only a few legislative hearings and markups, and most Republican amendments were defeated on party-line votes. The Energy and Commerce Committee did approve six minor GOP amendments, but three vanished before the bill hit the floor.
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Even Majority Leader Steny Hoyer of Maryland, the most conservative Democrat on the leadership team, thought inviting Republicans to help shape a recovery bill would be like recruiting pyromaniacs to work for the fire department.

“I am hard put to take the advice of people whose policies have put us deeply in debt and led to the weakest economy since the 1930s,” Hoyer told reporters.

After a month of all-Democratic planning, Furman and Rob Nabors did hold courtesy briefings for Republican leadership staff, where they talked about conservative economists who favored a big stimulus, and suggested the Recovery Act was bipartisan in spirit because it was heavy on tax cuts. “I remember thinking: You guys are insane,” one senior
Republican Senate aide recalls. The Republicans made it clear they wanted a lot more tax cuts—and real tax cuts, not welfare handouts wearing refundable tax cut masks.

“There’s nothing we could do that you’d be happy with,” Furman complained.

Understandably, Republicans rejected the idea that a bill without serious bipartisan input could be bipartisan simply because Obama decided it had bipartisan ideas. “Democrats operated under the assumption that they got to choose what bipartisanship means,” Cantor says. “There was no willingness to work together.”

It’s a fair point. But Furman had a point, too. Republican leaders did not really want to work together. They were about to make that abundantly clear.

B
oehner opened the weekly House GOP conference meeting on January 27 with an announcement: Obama would make his first presidential visit to the Capitol around noon, to meet exclusively with Republicans about the Recovery Act.

“We’re looking forward to the President’s visit,” Boehner said.
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The niceties ended there, as Boehner changed the subject to the $815 billion stimulus bill that House Democrats had just unveiled.
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“The bill Congressional Dems have written is not focused on jobs or tax relief. It’s focused on slow and wasteful Washington spending,” he told his members. Boehner said it would spend too much, too late, on too many Democratic goodies. He wanted to see members trashing it on cable, on YouTube, on the House floor. “It’s another run-of-the-mill, undisciplined, cumbersome, wasteful Washington spending bill,” he repeated.

“I hope everyone here will join me in voting NO.”

Cantor’s whip staff had been planning a “walk-back” strategy where they would start leaking that fifty Republicans might vote yes, then that they were down to thirty problem children, then that they might lose
twenty or so. The idea was to convey momentum. “You want the members to feel like: Oh, the herd is moving, I’ve got to move with the herd,” Rob Collins explains. That way, even if a dozen Republicans defected, it would look like Obama failed to meet expectations.

But when he addressed the conference, Cantor adopted a different strategy. “We’re not going to lose
any
Republicans,” he declared. His staff was stunned.

“We’re like, uhhhhh, we have to recalibrate,” Collins recalls.

Afterward, Cantor’s aides asked if he was sure he wanted to go that far on a limb. Zero was a low number. Centrists and big-spending appropriators from Obama-friendly districts would be sorely tempted to break ranks. “We had people who were really being Nervous Nellies,” Collins says. Take Anh Cao, a Vietnamese American who had just won a fluke election in a heavily African American New Orleans district after the Democratic incumbent was caught with cash bribes in his freezer. Why would Cao want to use his first big vote to defy a president his constituents revered? If Cantor promised unanimity and failed to deliver, his team warned, the press would have the story it craved: Republicans divided, dysfunction junction, still clueless after two straight spankings.

But Cantor said yes, he meant zero. He was afraid that if the Democrats managed to pick off two or three Republicans, they’d be able to slap a “bipartisan” label on the bill. And he figured leaders ought to lead.

“We can get there,” Cantor said. “If we don’t get there, we can try like hell to get there.”

Shortly before 11
A.M
., the AP reported that Boehner and Cantor had urged Republicans to oppose the stimulus.
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Press secretary Gibbs handed Obama a copy of the story in the Oval Office, just before he left for the Hill to make his case. Here we were, making this real effort to go talk to them as a group,” Gibbs says. “You know, we still thought this was on the level.” Axelrod says that after the president left, White House aides were buzzing about the insult. And they didn’t even know that Cantor had vowed to whip a unanimous vote.

“It was stunning that we’d set this up and before hearing from the president, they’d say they were going to oppose this,” Axelrod says. “Our feeling was, we were dealing with a potential disaster of epic proportions
that demanded cooperation. If anything was a signal of what the next two years would be like, it was that.”

Republicans point out that the House bill was scheduled for a vote the next day; did the West Wing expect them not to have a position? “It’s not so much a rebuke against Obama,” one leadership aide says. “It’s recognizing the sky is blue.” But if Obama’s aides thought the fix was in, they were right. Congressman Mike Castle, a moderate Republican from Delaware, says his leadership and most of his colleagues were always determined to fight Obama no matter what he did.

“The caucus had decided we weren’t going to give Obama a bipartisan victory on this,” Castle says.

O
bama’s hour-long visit with the House Republicans was cordial enough. Some of them asked for his autograph. Many were impressed with his command of policy details. He got a cheer when he said he was running late to a meeting with Senate Republicans—and they could wait. But he didn’t win any converts. There was an ideological divide in that conference room, and an undercurrent of hostility. Republicans didn’t need to hear the professor-in-chief lecture them about change. They didn’t like his insinuations that they didn’t know what was in the bill, and they resented his suggestion that they ought to be happy with his tax cuts, as if he knew what they wanted better than they did. Some of them were annoyed that he mentioned his legacy, which seemed a tad presumptuous after a week in office.

“When Bush talked about his legacy in his seventh year, people started ripping on him,” recalls Representative Mike Rogers, the former FBI agent.

The basic problem was that House Republicans didn’t want a new New Deal. Most of them didn’t think much of the old New Deal. During the Q-and-A, eighty-two-year-old Roscoe Bartlett of Maryland told Obama he was six when FDR took office, old enough to see that government couldn’t spend its way to prosperity.

“I don’t remember that Roosevelt’s spending had anything to do with bringing us out of the Depression,” Bartlett said.

At the time, the must-read book in Republican circles was
The Forgotten
Man
, a revisionist history of the Depression by the conservative columnist Amity Shlaes.
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“That book caught fire,” one House leadership aide recalls. GOP leaders like Boehner as well as right-leaning pundits like George Will were flogging its argument that FDR, the New Deal, and fiscal stimulus actually made the Depression worse. But Shlaes relied on a slew of skewed statistics and selective anecdotes to make that case; her employment data, for instance, left out work-relief jobs at New Deal agencies. Most economists agree that some New Deal initiatives unrelated to fiscal stimulus were unhelpful, and the Depression didn’t end until World War II took fiscal stimulus to new extremes. But as Obama told the House Republicans, there is voluminous evidence that in FDR’s first term, deficit spending helped slash 25 percent unemployment almost in half. Then in 1937, after FDR’s shift toward austerity, the recovery stalled and unemployment spiked. The New Dealers, Obama suggested, didn’t spend enough.

Republicans weren’t buying what he was selling.

“Mr. President, I don’t think there’s any precedent in history that says this will work,” Bartlett said. The conference burst into applause.

The Republicans were just as irate about process as they were about substance. Before Obama left, conference chairman Mike Pence asked him to remember three things. First, House Republicans would pray for him. Second, he was welcome back anytime. The third message was less pleasant.

“Several times, you talked about ‘the bill that was negotiated in the House,’” Pence said. “There was no bill that was negotiated in the House, because Democrats didn’t negotiate with us.” Once again, the Republicans cheered.

R
ahm Emanuel was Obama’s fixer, doing deals, putting out fires, offering his two unexpurgated cents on strategy, policy, and anything else that had occurred to him within the last second or two. He was basically, as it said on a nameplate in his office—which, he liked to point out, was bigger than Biden’s office—the Undersecretary of Go Fuck Yourself. He set the frantic pace for Obama’s first two years in the
White House. He always seemed to have a million contradictory ideas in his head, and that head often seemed like it was about to explode.

While Obama was visiting the Republicans, Rahm was in Hoyer’s office meeting with Blue Dog Democrats, who were almost as critical of the House bill. They didn’t like Obey, who called them “bed wetters,” and they believed in fiscal discipline, although some of them seemed to forget that when it came to weapons systems, farm subsidies, and other goodies. In any case, they were tired of waiving pay-as-you-go rules to pass deficit-busting bills. In Congress, Rahm had shared their policy concerns about drunken-sailor spending and their political concerns about out-of-touch liberalism; he had persuaded many of them to run in the first place. Now Baron Hill of Indiana, one of his recruits, told him the Blue Dogs wouldn’t vote for Obey’s money pot without some changes, and without a firm presidential commitment to rein in the deficit once the crisis passed.

“You motherfuckers!” Rahm screamed. “You mean to tell me you’re going to vote down the very first piece of legislation the president puts forward?”

“Rahm, I’m sympathetic,” Hill replied. “I’m just the messenger here.”

Rahm eventually persuaded most of the Blue Dogs to back off the ledge, assuring them Obama cared about budget discipline as much as they did. He had already agreed to kill the money for contraception and the Mall. Rahm also promised that Orszag would write a letter pledging the White House’s commitment to pay-as-you-go.

“The Recovery Act wouldn’t have happened without Rahm,” Orszag says. “He was pure energy, banging heads, freaking out. Just a force of nature.”

That same night, Rahm hosted some Rust Belt House Republicans in his spacious new office, which was still full of unpacked boxes. Rahm was an avid practitioner of pre-post-partisanship, but he had cultivated good relations with this group of moderates as a congressman, working together on Midwest issues like Great Lakes restoration, meeting for Tuesday lunches at the Monocle restaurant on the Hill. Now Rahm told his Monocle pals that Obama wasn’t just lip-synching bipartisanship.
They told him the House bill was a strange way to show it. The final text had just been released yesterday, with the vote scheduled for tomorrow. Members had submitted over two hundred amendments, and Pelosi was only allowing votes on eleven. It felt like a typical spending bill fast-tracked under the pretense of stimulus, freezing Republicans and even rank-and-file Democrats out of the process.

These were the kind of Republicans who wouldn’t be automatically opposed to stimulus. Their industrial districts were being crushed, and they weren’t violently antagonistic to federal spending. “Everybody at home wanted something done,” says Steve LaTourette of Ohio. A businessman in his Cleveland district had walked up to him and said: “If you don’t think we need stimulus, you’re a jackass.” But LaTourette wanted to see more infrastructure in the bill. Others wanted more tax cuts. At the same time, the Republicans were all unnerved by an $815 billion price tag so soon after TARP.