The New New Deal (30 page)

“Biden said: Look, man, we really need this to be bipartisan,” Martinez recalls. “I could’ve negotiated a pretty good deal for Cape Canaveral. I could’ve saved the Everglades!”

To Biden’s dismay, his targets were all echoing the complaints of their party leaders about the Recovery Act: too much money, too much spending, too much stuff that didn’t seem like stimulus, too much of a wish list for back-in-power liberals.

“If you put a six-year-old kid on a diet for a month, then put him in a bakery and say: ‘Okay, do what you want,’ that’s what this was like,” Martinez says.

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eid had a dozen Republicans on his own target list. And he had received at least one stimulus request from every senator in both parties. But as the Senate prepared to start debate in early February, he was getting the same negative feedback from across the aisle. “He turned
over every stone,” a senior aide recalls. “He didn’t have commitments from anybody.” Feeling desperate, he called three veteran conservative Republicans into his office—Grassley, Thad Cochran of Mississippi, and Mike Enzi of Wyoming—and urged them to support the bill for the good of the country.

“He was basically pleading for our votes,” Grassley says. “He said: ‘You all know something needs to be done. The Democrats did TARP for Bush. You’ve got to look past the substance.’”

When his appeal to patriotism didn’t fly, Reid tried an appeal to heartstrings. Ted Kennedy was home battling brain cancer, and Reid told the Republicans he didn’t want to call him back to work to break a filibuster.

“He said if you can’t vote with us, we’re going to have to bring Kennedy to the floor, and it really could kill him,” Grassley says. “We looked at each other like: Huh?”

If you can’t support the bill, Reid asked, could one of you at least vote on Kennedy’s behalf to spare him the trip? There was a long history of senators “pairing votes” as a courtesy in times like this, but not this time.
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Reid made a similar request to Kennedy’s best friend in the Senate, Orrin Hatch of Utah, to no avail.

“They all said: ‘Sorry, we have to be voting no on this,’” the Reid aide recalls. “These are people who profess to care about the man and the institution and all that. But he’s on his deathbed, and they wouldn’t pair their votes.”

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cConnell didn’t bother to make emotional appeals to his members. He made political appeals. He spoke a lot about 1984, the year of “Morning in America,” when a vibrant economic recovery carried Reagan to reelection. What people tended to forget was that the same recovery carried congressional Democrats to reelection. The only Republican to defeat an incumbent senator that year was the young Mitch McConnell.
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His point was that Republicans ought to stand tough against Obama’s plan, because they wouldn’t pay a price if it succeeded, and
they’d reap the benefits if it didn’t. An aide described his pitch: “If this thing works and the economy is booming and everybody is happy, your vote against the stimulus won’t be held against you. In good times, people get reelected.” On the other hand, if the economy wasn’t booming by 2010, Republicans could return from the wilderness.

“He was already looking two years ahead,” the aide says.

In the meantime, McConnell tried to build support for a filibuster. There were limits to his obstructionism; he talked Tom Coburn out of deploying a procedural trick called a “clay pigeon” that could have tied the Senate into knots.
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Reid had promised an open process, and McConnell thought abusing it would just create a media storm over the Party of No. “It would’ve fed the Democrat narrative very well,” an aide says. But McConnell didn’t consider the filibuster an abuse, at least not when he was in the minority. In fact, he was the senator most responsible for transforming an extreme measure reserved for
Mr. Smith Goes to Washington
situations into a routine procedural weapon.
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The Founding Fathers never envisioned a sixty-vote threshold, but they did envision the Senate as a check on tyrannical majorities, the proverbial saucer to cool the passions of the House. McConnell believed the filibuster honored that conservative spirit, requiring change to proceed by consensus.

So McConnell focused on making sure no consensus materialized. Reid made his job easier by promising unlimited amendments on the stimulus, giving Republicans unlimited opportunities to vote for things other than the stimulus. They tried to craft an official alternative, but quickly decided there was no point trying to unite forty-one senators around a single plan. What mattered was staying united against the Obama plan. “We just said: Forget it. We don’t need to do this,” recalls one Senate GOP aide. “We’ll let the Democrats sink themselves.” Instead, McConnell encouraged them to propose whatever alternatives, additions, and subtractions struck their fancy, with no pressure to vote one way or the other on anything but the overall bill. He didn’t care what they said yes to, as long as they ended at no when it counted. When Lisa Murkowski approached his staffers with a slew of energy amendments, including one to boost Alaska’s oil and gas revenues, their
reaction was, Great, we’re with you all the way—and you’ll oppose the stimulus, right?

“We were very much of the theory of let a thousand flowers bloom,” says one senior aide. “We weren’t trying Soviet-style top-down management. Where we were going to exert our muscle was rallying the caucus against the Democrat proposal.”

McConnell pushed his staff to find ammunition he could use to fire at the stimulus. One morning, he was surprised to see Derek Kan, his bookworm budget analyst, wearing glasses in the office for the first time. “I had my contacts in for ten straight hours last night,” Kan explained. “I was reading the bill.”

“I’m glad somebody’s reading the bill,” McConnell mused.

Kan read everything.
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After a new CBO analysis concluded the Senate bill would indeed meet Obama’s goal of getting 75 percent of the money out the door in eighteen months, he alerted the conference to some fine print: Less than half the discretionary spending would go out in eighteen months, and the total cost with interest would exceed $1.2 trillion. That number didn’t mean much—who calculates the price of a home by adding up decades of mortgage payments?—but it reinforced the message of bloat. Kan also highlighted a sloppy Democratic report that tried to pinpoint how many jobs various programs would create; State Department cyber-security upgrades penciled out to $1.35 million per job. Meanwhile, McConnell’s communications team blasted out every Democratic criticism of the stimulus—not just from centrists like Ben Nelson of Nebraska, but from liberals like Roland Burris, Obama’s successor in Illinois.

“No one wants to be to the left of Roland Burris,” as a senior Republican aide says.

F
or the most part, the Senate stimulus bill looked a lot like the House version that hadn’t attracted a single Republican. The only major difference was the addition of a $70 billion “AMT patch,” an annual must-pass ritual that exempts over twenty million upper-middle-class families from the Alternative Minimum Tax. The AMT fix would provide virtually
no stimulus, but Baucus included it as a favor to his buddy Grassley, even though Grassley and his party were trashing the rest of the bill.

The Senate bill also included somewhat more generous tax relief for businesses. For example, Baucus expanded a tax break for firms that restructured their debts, an urgent priority for Las Vegas casinos, the private equity behemoth the Carlyle Group, and the Chamber of Commerce. The Senate bill adopted several of the business community’s top priorities, and Democrats put heavy pressure on the Chamber and other Republican-leaning business groups to endorse it. Depressions, they pointed out, are bad for business. During one call, when a National Association of Manufacturers lobbyist said his group might have to remain neutral, a congressional aide exploded: “This is bullshit! Don’t you ever come here telling us to support business if you can’t support this!” He threatened that business groups would lose all credibility with the Democrats who controlled Washington if they parroted the Republican line when the economy was at stake. This wasn’t some environmental regulation that was irritating some manufacturer in Toledo. “This is the whole fucking enchilada!” the aide said. “This is whether we wake up in the morning with 20 percent unemployment!”

In the end, despite equally heavy pressure from their Republican allies, the Chamber and the manufacturers did endorse the stimulus. The Chamber did not label it a “key vote”—which meant Republican lawmakers could vote no without getting dinged on their annual pro-business report cards—but even the grudging nod from corporate America helped blunt charges of woolly-headed liberalism.

“A lot of Republicans said: I can’t believe you’re getting behind this,” says Chamber lobbyist Bruce Josten. “But when you sit where I sit, you don’t want a complete imbalance of supply and demand.”

On the other hand, the extra tax breaks that helped win the Chamber’s support inflated the cost of the Senate bill to $885 billion, providing even more ammo for McConnell. He told his members: This is bigger than TARP, and politically, it could be just as toxic. Let the Democrats be the party of Monopoly money. And don’t buy the post-partisan hype. Look what Obama did to us on S-CHIP.

“McConnell wanted to hold the line,” Martinez recalls. “He kept saying: ‘This is a partisan bill. Don’t give it a bipartisan imprint. Obama’s going to have to eat the results of this thing.’”

O
bama believed he was going to extraordinary lengths to reach out to Republicans, and getting nothing in return. They demanded tax cuts; he gave them tax cuts. They complained about sod on the Mall, condoms, herpes prevention, and “smoking cessation”; he killed all those Democratic cats and dogs. Obama showed unprecedented deference by visiting the Republicans on their turf in his first week; they signaled he was wasting his time before he even got into his motorcade.

Still, the president felt like he had to keep reaching out. If he couldn’t find a few Republican senators to work with, the Recovery Act—and the rest of his legislative agenda—would be doomed. Anyway, Obama was by nature a conciliator, even when his enemies were vowing to kick the hell out of him and run through him like crap through a goose. As an organizer, he had been trained to seek common ground and bipartisanship was part of his brand. Maybe Republican leaders would pay a price for rejecting his overtures.

“It’s like diplomacy with the Iranians,” explains one senior aide. “It’s important to extend your hand, even if you know they probably won’t shake it. You want the world to see you extending your hand.”

Obama also needed to make it clearer that Republican congressional leaders were not the only Republicans in America. Four moderate GOP governors—Schwarzenegger of California, Charlie Crist of Florida, Jodi Rell of Connecticut, and Jim Douglas of Vermont—had already endorsed the Recovery Act. Even the fiscally conservative Jon Huntsman Jr. of Utah was praising it as “the kind of stimulus that we could benefit from.” Plenty of Republican mayors, county executives, and ordinary citizens wanted stimulus, too. Obama strategist Anita Dunn wrote an email warning that the White House could not afford to let “bipartisanship” get defined in the media as whatever Eric Cantor wanted. “We made a huge mistake early on when we let Washington Republicans set the narrative,” Dunn says.

The president tried to unbake that cake. On February 1, he hosted several rank-and-file Republicans at his Super Bowl party, handing out oatmeal cookies, gently teasing Senator Specter for wearing a tie. The next day, he talked up the stimulus with Governor Douglas, who provided a perfect image of bipartisan cooperation when he helped Obama move a couch after their Oval Office photo op.
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The day after that, Obama announced stunning bipartisan news: New Hampshire’s senator Judd Gregg—a bona fide conservative—would be joining his cabinet as commerce secretary.

Gregg had voted against Lilly Ledbetter and S-CHIP, and had trashed the Democrats as a party of trillion-dollar price tags. But he had been impressed by Obama and his economic team during TARP, and thought he had the potential to be a transformative president. Reid recommended Gregg for the job, Rahm got excited about the concept, and before he really thought about it, Gregg was at the White House saluting his future boss. “You’ve outlined an extraordinarily bold and aggressive, effective and comprehensive plan for how we can get this country moving,” Gregg told Obama as the cameras rolled.
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McConnell tried to talk Gregg out of jumping ship, and so did less partisan colleagues. Mel Martinez, who had led HUD under Bush, reminded Gregg that cabinet secretaries don’t get to pursue their own agenda. Kent Conrad, Gregg’s closest Democratic friend in the Senate, also hinted that the fit might not be great, although he didn’t say so directly. “Judd was so enthusiastic, I didn’t want to be a skunk at the picnic,” Conrad says. Obama transition head John Podesta was even more skeptical.

“He doesn’t believe the things we believe,” Podesta told Rahm.

“If he takes the job, he’ll believe,” Rahm replied.

Gregg announced that he would recuse himself from votes on the stimulus, which struck some White House aides as oddly ungrateful. “Nobody was under the illusion that he would be a Barack Obama Democrat,” Gibbs says. “But you kind of expect your commerce secretary to support your recovery plan. Some of us were like: ‘Huh. That’s weird. Maybe this isn’t such a great idea.’” Still, the upside for Obama
was obvious. A conservative Republican was on record describing Obama’s supposedly scattershot plans as “extraordinarily bold and aggressive, effective and comprehensive.”
Politico
declared that Gregg’s mere presence would “make it harder for his fellow Republicans to demonize Obama and refuse to give the new president the running room he needs to put together his economic recovery plan.”
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O
h, really?