Banks had begun to sell the risky mortgages they’d made. The institutions they sold them to then shopped them around the world. These troubled—and now frozen—assets were on the balance sheets of the businesses that Americans rely on to buy everything from dishwashers to new homes. I had been hearing how the crisis had impacted Americans from the letters I was receiving from constituents. While the crisis had its roots in the actions of a few, the consequences were having an impact on every home in America.
The economic rescue plan that Bernanke and Paulson were suggesting, and which Bush was supporting, was mind-boggling: acquiring $700 billion worth of mortgage-backed securities. Bernanke explained this as necessary—a way to protect the vast majority of Americans from the misdeeds of Wall Street. And my colleagues and I understood. Doing nothing was not an option.
Harry Reid spoke up. “When do you need this?”
“In three days,” Paulson said.
Reid scoffed. “We can’t go to the toilet in three days around here.”
I leaned toward Reid and patted his forearm. “Harry, we can do this.”
When the meeting ended, I walked with Kyle, who had attended the meeting with me, down the back hallway that leads from the Speaker’s suite to my office. We were both quite shaken.
“I’m obliged to say this to you,” Kyle said. “But this is going to be really unpopular. And we’re just weeks away from reelection.”
“I’m aware of that,” I said. No voter was going to like the idea of giving money to the entities that had caused this mess. I could already hear the word “bailout.” I also knew what inaction would mean. It would be impossible to take out loans for college tuition, cars, and new homes. That would trigger a corresponding collapse in manufacturing and services that could wipe out savings and lead to massive job losses. I stopped and looked at Kyle. “I don’t think this will take me out,” I said. “But I do understand this is a huge problem. We can’t afford not to act. It’s too big. This is a crisis, and in a crisis, leaders are supposed to step up and confront things. We don’t have the time to act like we normally do—to take our time and deliberate. We can’t afford to wait.”
“All right,” Kyle said. “What do you want me to do?”
“Get a team together. Let’s get to work on this immediately.”
For the next few days, with the task we faced, my office had the atmosphere of a wake. I called on the help of my policy director, Rohit Kumar. At just thirty-three years of age, he was one of the smartest guys I knew, especially when it came to getting a handle on what we were facing here. By the Saturday after that meeting, the White House and Treasury had drafted language for the legislation they wanted Congress to consider, and then a marathon session began; the goal was to shape the final bill that all parties could agree on. The work was approached in a truly bicameral, bipartisan way. In these meetings, there was an overwhelming sense of anger at the forces and decisions that had gotten us here, and a determination that we would do everything to stop it. When there’s a fire threatening to burn your neighbor’s house down, you don’t go and lecture him about the hazards of keeping gas cans in the basement. You help him put the fire out before it destroys his home and then spreads to the next. Everyone understood the stakes, and there was a general agreement that we had to do what needed to be done to save our economy.
A team of staff met every day, all day, and well into most nights. By the end of the week, we had drafted a bill that satisfied everyone in the room. It was called the Troubled Asset Relief Program, or TARP, and it did what was necessary to bring us back from the brink of financial collapse, authorizing the purchase of $700 billion in troubled assets by the government. Ironing out the details had been no easy matter. Though we had all agreed to put our own political needs aside, objections to the bill still split along predictable ideological lines. The Republicans thought there were too many restrictions, and the Democrats wanted more oversight. We knew it would be called a bailout, and we would need both parties on board for it to pass.
John McCain’s decision a few days later to suspend his presidential campaign to return to DC surprised everyone and heightened the sense that things were falling apart pretty quickly. His opponent, Senator Barack Obama, then said he’d come back too, and Bush set up a meeting to discuss the financial crisis with members of the administration and congressional leaders at the White House.
We gathered in the Cabinet Room at the White House, seated around the large conference table, in front of windowed doors offering a view of the Rose Garden. President Bush welcomed everyone, and following the protocol that dictates meetings such as this, he invited Speaker Pelosi to speak.
“Thank you, Mr. President,” she said. “But Senator Obama will be speaking on behalf of us today.” For several minutes, and with no notes, Obama laid out an understanding of what we faced, and a promise to deliver the votes we needed to get TARP passed. Everyone in the room was spellbound. Not only because Obama had so masterfully shown how well he understood the issue—delivering what sounded like third-draft prose without any notes—but because the Democrats, in breaking protocol by turning over the floor to him, had shown how much they were behind him.
McCain said he was also on board. When we left the room, I was sure of two things. Even though support for TARP would be bipartisan, we Republicans would largely take the electoral hit come the November elections. And the other, having just watched how that meeting unfolded: come election night, we were in a whole lot of trouble.
Three days later, in a move that stupefied the entire Senate, if not every American who’d been reading the newspaper, the House of Representatives rejected the bill we’d created. It was an act of stunning defiance. Some members of my staff like to say that I go through the five stages of grief—from denial to acceptance—in about one nanosecond. In many ways this trait has been a blessing in my work, as it allows me to make clear-eyed decisions at times when others are overcome with emotion. The flip side, however, is that my equanimity while others are experiencing anger can make it appear as if I don’t care, or care a lot less than those who are so mad they’re kicking chairs or slamming their fists against tables (or, because this is the Senate, shaking their heads and frowning quite aggressively). This was just one of those times. Inside, I was furious. Doing nothing, as the House seemed intent on doing, was not a sustainable course of action. Anyone questioning that just had to look to the US stock market, which had begun to plunge as the vote went down. By the end of the day, the Dow Jones Industrial Average had fallen more than 5 percent, and other indexes fell even more sharply. That night I felt so unsettled I had trouble sleeping. While the House vote came and went, the threat to our economy had not.
But my anger was not what people saw the next morning, when I calmly got off the elevator at the Capitol. Brian McGuire was waiting with my morning remarks, but I didn’t need them, because I already knew exactly what I wanted to say. I went to the Senate floor and, speaking off the cuff, I delivered my thoughts. I assured everyone that Congress would act swiftly and decisively to protect millions of ordinary Americans from the aftershocks of a credit crisis they had no hand in causing, but which threatened to reach into every single household in the country. I assured them that the members of the congressional leadership were continuing to assess the legislative path forward, and that one thing was clear: we would work together to create a bipartisan solution. And we weren’t going home until we got to yes. We’d failed the day before, but I wasn’t going to let us fail on this day. I assured them that Harry Reid and I both understood that we had to work together on this, to get this rescue plan passed. And we intended to do both.
I returned to my office. Later, Stefanie Muchow knocked lightly on my door. “Boss?”
“Yes, Stef.”
“Just thought you’d like to know that your speech seemed to work. The markets are rebounding.”
I felt the weight lift, a
t least lightly, from my shoulders. “Well, I’ve had some good responses to floor speeches before,” I said. “But that’s certainly a first.”
Over the next few days, we were back in all-night sessions rewriting the bill to appease the members of the House. On October 3, 2008, just a few weeks after that meeting with Bernanke and Paulson, President Bush signed the Troubled Asset Relief Program into law. It had been a very difficult process, but when it was over, we had done our job. We had saved the economy from complete peril (and in fact, the money given away through TARP has since been repaid with interest). At the same time, the general election was just six weeks away. I knew that my work on getting TARP passed had been necessary, but it was also politically risky. While everyone involved vowed not to politicize the issue, within twenty-four hours of the bill’s passage, ads were running on Kentucky television lambasting me for my role in giving away taxpayer dollars to big banks. I didn’t question what we’d done. TARP was absolutely essential, and I had done what I’d come to the Senate to do more than two decades earlier—make decisions based on what I believed was best for the country, not my own political future. But, admittedly, I couldn’t help but worry about my chances of reelection. Around this time, just before returning to Kentucky to wrap up my campaign for reelection, I gathered with everyone in my office for our annual staff photo. I’d just received the news that after my vote on TARP, I had gone from a thirteen-point lead to a four-point lead.
“I sure hope this isn’t a farewell photo,” I said, just before the blink of the flash.
I might sum up my race for reelection this way: In both my 1996 and 2002 campaigns, there were approximately four million people living in Kentucky, I was not the Republican leader, and we spent about $6 million in each race. In 2008, there were still about four million people living in Kentucky, I was the leader, and we had to spend over $25 million.
Why? Because four years earlier, a very talented former South Dakota congressman named John Thune took on Tom Daschle, the Senate Democratic leader, and for the first time since 1952, a sitting Senate party leader was defeated. Prior to this, there was a sense of détente that guided the reelection campaigns for party leaders, likely stemming from the extremely difficult and expensive work required to even try to unseat one. But since Daschle’s loss, elections against party leaders have become highly competitive, all-out battles that, with respect to the money spent and the length of the campaign, are more reminiscent of presidential campaigns than runs for the Senate.
One significant obstacle I—and every Republican running for office—faced that year was the overwhelming disapproval of outgoing President George W. Bush. He had the same standing as Harry Truman in 1952 and Lyndon Johnson in 1968, who were each in the White House at the time of unpopular wars that drained their political capital. Even though they weren’t on the ballot, America’s opinion of the job they’d done had affected their party’s outcome in the next elections. I feared the same would hold true for Bush. Not only was he about to leave office with low approval ratings, but his unpopularity had enabled the opposition, creating, in 2008, a groundswell of dissatisfaction.
Despite public opinion in the last days of his presidency, I think George W. Bush was an outstanding wartime president. This era of instant news makes keeping public opinion on your side while sustaining a prolonged military action a very difficult thing to do. Imagine if you were Eisenhower on D-Day. The parachutes are falling over northern France, you’re getting pinned down on Omaha Beach, while back in the studios at CNN and Fox News, retired World War I generals, the Wesley Clarks of their day, are second-guessing every move you make. Had we operated then the way we do today, let’s just say I likely wouldn’t have been wearing my “I Like Ike” button back in 1952.
But when it comes to the war on terror that Bush was forced to confront, the measure of success has to be the level of security here at home. And Bush’s decision to go on the offensive, in both Iraq and Afghanistan, and to create the programs and policies to combat al-Qaeda, is the number one reason there have been no successful mass casualty attacks on American soil since 9/11. His strategy didn’t always go perfectly, but that can’t be expected, because there is no perfection in armed conflict. There can’t be, because the other guys shoot back.
In political combat, the other guys shoot back too, and my own fight for reelection was starting to feel less like strategic warfare and more like mortal combat. My opponent Bruce Lunsford was a wealthy businessman who could afford to self-fund and write himself million-dollar checks when needed—which is awfully helpful. As I always say, the three most important words in politics are “cash on hand.” The campaign itself seemed interminable. Not only did we spend a whole lot more than previous years, but we started a lot earlier and faced a much more aggressive deluge, especially, for the first time, from out-of-state forces. Well-funded groups like MoveOn.org, which has raised several million dollars for Democratic candidates, and VoteVets.org were on television as early as February of 2007—one and a half years before the actual election—accusing me of everything from killing soldiers to denying kids health care. The Democratic Senatorial Campaign Committee (DSCC) spent a significant amount in Kentucky alone. The attacks on me became so absurdly personal that one morning, after we aired a TV spot about my experience overcoming polio, I opened the Courier-Journal to see an article suggesting that I was lying about having been a Little League all-star. It was a concentrated, major, and well-funded attempt to soften me up for the election while trying to break my spirit.
And it hit home, literally. You might call the Highlands neighborhood where I live “the Berkeley of Kentucky.” Elaine’s and my votes are among the few I get in my precinct. But during this campaign, I felt particularly beleaguered. In the six years the war had endured, hundreds of thousands of people had taken part in antiwar marches in cities like New York, San Francisco, and Chicago. The protests in Louisville were more modest but also more targeted. Instead of gathering in the center of the city, they took to my own front yard. The first group of picketers arrived with their signs the week of the Kentucky Derby, held in Louisville the first Saturday each May. Later that summer, hundreds gathered one night at Bellarmine University, a few blocks away, and marched from there to my house, bellowing and screaming. They took over my front yard and blocked our street. The police eventually came, and the group peacefully disbanded, but smaller groups were present on and off throughout the following months. Not only did Elaine and I worry about being confronted by protesters hanging out on our small front lawn, but driving home from the airport each weekend, we passed signs on lawn after lawn in my neighborhood, all saying the same thing: “Ditch Mitch.”
The bad news didn’t stop there. In the summer, as I was preparing for Fancy Farm, the venerable Alaska senator Ted Stevens, the longest-serving Republican senator, became embroiled in a corruption case and was eventually indicted on seven charges of making false statements about lucrative gifts he’d received from corporate executives in the remodeling of his house in Girdwood, Alaska. (Stevens would go on to be convicted, just before the election, and defeated. He would later be exonerated, saving his reputation if not his seat. Years later, in a conversation with Brendan Sullivan, a noted white-collar defense lawyer in Washington, Sullivan told me this was the worst example of prosecutorial abuse he’d seen in his entire career.) Meanwhile, the recession we suffered was having ill effects throughout the globe, and John McCain was taking a battering in the polls.
I stopped reading the news, and every morning, seeing the blinking red light indicating a new e-mail on my BlackBerry, I knew it was likely an update from someone on my staff reporting the results of the night’s tracking polls, and I was almost too afraid to read my new messages. One morning I decided to leave them for a while, and after breakfast, I called Kyle.
“How are the numbers?”
“Haven’t looked yet,” he said. “Can’t quite bear it.”
“Me neither.”
“Sad,” he said. “Two grown men living in fear of a BlackBerry.”
On October 20, 2008, I embarked on a two-week, four-thousand-mile, sixty-eight-stop bus tour that ended November 2, just two days before Election Day. Elaine came along for the first leg of it, and as we climbed onto the bus that first morning and headed out, I was once again struck by the breathtaking beauty of Kentucky. I’d had tough races before, but this one was, at its best, a pure toss-up, the outcome very much in doubt. The first stop was in Greensburg, a town of just a few thousand residents about eighty miles south of Louisville. As the bus slowed to a stop, we saw the crowd gathered for our rally in the town’s public square.
I turned to Billy Piper, who was at my side. “What am I going to say?” I’m not sure whom the question surprised more, him or me. I’m never happier than when I’m on the campaign trail, meeting people, talking Kentucky issues, and I’ve never had to ask a staffer for talking points before addressing a crowd like the one gathered that day in the cold.
Billy made a valiant effort to answer my question. “Well, sir, you could talk about the energy crisis and our plan. You know, ‘Find more. Use less.’ And then, you know, how Lunsford—”
I stopped him. “Do me a favor. Clear the bus for me.”
“Clear it?”
“Yes. Ask everyone to leave, even the driver. Give me a few minutes alone in here.”
After the bus doors shut, I took a seat, relishing the silence. There were just two weeks left in the race, and all eyes were on Kentucky. The national press was standing in wait. They smelled blood in the water, and if I was going down, they wanted to be there to see it. The pressure was enormous, but so were the stakes. Barack Obama seemed likely to take the White House. The platform on which he was running included some of the most far-left policies I would ever have to face as a senator. I had been working for the last twenty-four years to protect the nation from exactly the type of changes I knew he’d be eager to enact. And I had been working hard for the last two years leading my party. It was now my job to work as hard as I could to win this fight. There was simply too much riding on this. It was not the time to retreat.
The Long Game Page 18