“Why not?”
“The debt limit increase. He refuses to agree to anything that might make this come up again. We have to start over.”
Once again, I knew I had no choice but to allow the anger I felt to quickly pass. What this situation called for was not emotion, but an almost athletic determination to keep my cool and figure out what was next. But one thing I knew for sure. I was done dealing with Harry Reid.
In the week before the deadline, the hope that we might resolve this issue continued to deteriorate. The House, under Speaker Boehner, developed a bill that would have made a debt limit increase contingent on huge cuts in spending and the adoption of a balanced budget amendment. The bill passed the House, only to be rejected by the Democrat-led Senate. The next day, the House rejected a plan drawn up by Harry Reid. On Saturday, I received a call from Joe Biden.
“I think it’s time we talk,” he said.
Over the nearly twenty-five years we served together in the Senate, I’d gotten to know Joe a little. As my dad would have said about the vice president if they’d ever met: if you ask him what time it is, he’ll tell you how to make a watch. I’d learned this pretty clearly a few years back, during a flight to Raleigh, North Carolina, to attend the funeral of Senator Jesse Helms. I’d been asked to deliver a eulogy for Senator Helms, and I flew to his funeral on a small plane alongside Bob and Elizabeth Dole, Ted Stevens, and then-senator Joe Biden. Well, Joe started talking the minute we got on the plane, and he didn’t stop until the moment we landed. I think this quality of Joe’s is endearing, but this day I was nervous about speaking at the funeral, and tried my best to review my notes during the incessant chatter. We got to Raleigh, the funeral went fine, and when we got back on the plane, Joe started talking again and talked nonstop all the way back. It was vintage Joe Biden.
Not only did I like Joe, but in the last several months I’d also learned that he didn’t only talk, he also listened. He was, therefore, someone I could work with. A few months earlier, he and I had successfully negotiated a means to address the imminent rise of taxes, with the scheduled December 2010 expiration of the Bush-era tax cuts. Allowing these cuts to expire would have meant a significant tax increase for every American taxpayer. After others had tried and failed over months to negotiate a solution, Joe and I had been able to do so in a matter of days. The reason we could get a deal done—and that I could work with Joe—was that we could talk to each other. I could tell him how far we could go, and he would reciprocate, unlike Obama. The president’s way of interacting and “negotiating” was utterly unproductive. Joe, on the other hand, made no effort to convince me that I was wrong, or that I held an incorrect view of the world. He took my politics as a given, and I did the same, which was what allowed us to successfully negotiate when it came to our discussion on taxes in 2010. The administration and congressional Democrats agreed to a two-year extension of all the Bush tax rates, and we agreed to a temporary cut in the payroll tax and the extension of unemployment benefits. As far as Republicans were concerned, the deal was terrific, as evidenced by the fact that come the day of the bill signing, I attended, while Harry Reid and Nancy Pelosi were conspicuously absent.
Now, with the debt limit deadline looming, and with a government we didn’t control, I understood there was a limit to what we could achieve. Given the cards we were dealt, what we needed to do—what was in the best interest of our country—was to forge the best compromise we could to avoid a default. Not only would a default plunge the economy back into a recession, but it would also likely result in a spike in unemployment and a risk of a global depression. And the blame for it would fall largely on Republicans. With the 2012 elections coming up, that was a foolish gamble to take.
When Joe and I spoke that Saturday night, three days before the deadline, we agreed to see what we might work out. Sharon Soderstrom, my chief of staff, and I called together the key members of our policy staff to explore how to bring about the best possible deal. We worked late into the night over pots of coffee and take-out Chinese food. Rohit Kumar, my policy director, was key to these negotiations. “Listen to this,” he said, pulling the thin piece of paper from a fortune cookie. “‘You may be spending too much money.’ I think we got the White House’s order.”
The next morning, I appeared on CNN and Face the Nation to voice my confidence that we were nearing a compromise, and then I returned to my office at the Capitol. That afternoon, I had several discussions with Biden, while also stopping by Boehner’s office—which meant following the smell of cigarette smoke down the hall—to make sure he was on board. We mapped out a deal that would become the Budget Control Act of 2011: we’d reduce discretionary spending by $900 billion over ten years and appoint what became known as the supercommittee, consisting of six Republicans and six Democrats, to come up with $1.2 trillion more in savings by November. We would not raise any taxes at a time when our economy could least afford them. And by raising the debt limit, we would avoid a government default.
I was proud of the deal we’d struck. In April, four months earlier, the president was asking us to raise the debt ceiling with no spending reductions whatsoever, and here we’d locked in more than $2 trillion of savings, the most significant spending reductions since right after the Korean War, without raising taxes. In 2005, when we’d had control of both the White House and Congress, we’d only been able to manage—and with a great deal of effort—a deficit reduction bill of less than $40 billion. Getting this measure enacted at a time when nobody could get anything out of this administration was particularly satisfying. After the vote, many senators, including a number who voted against the proposal, shook my hand and thanked me. Jim DeMint was among them. “That was the best we could do,” DeMint said.
This exchange perfectly illustrated the hypocrisy of DeMint and his whole enterprise. People like him were depending on me to pick up the pieces by brokering deals. He’d say it was the best we could do, privately, and then fund-raise by blasting me for the same deals. I found the fact that DeMint would shake my hand after railing against this deal both jaw-dropping and revealing, and I didn’t remain quiet about my frustration. “Jim,” I said to him one day, after calling him to my office, “if you want my job, run for it.” This time, he had very little to say. But regardless of what he might have been saying about how terrible the deal was, I agreed more with what Representative Charlie Rangel, a Democrat, said after the bill passed—that the Republicans “mugged the president but let him keep his wedding ring.”
The day after we passed the Budget Control Act, an article appeared in the Huffington Post claiming it was “Mitch McConnell’s moment” and that it likely wouldn’t be the last. Why? Because chances were good that with the upcoming elections of 2012, I would become the Senate majority leader.
I was prepared, and more than a little eager. After six years as the leader of my party, I was looking forward to the chance to finally assume the position I’d been working toward for the last twenty-eight years.
As I learned long ago, it’s not wise to allow your highs to get too high, because you just might then have to face some pretty serious lows. So it was for me on election night of November 2012. Obama was reelected and, defying expectations, not only did we not flip the Senate, we lost two seats.
There were a few reasons we failed to meet expectations. One was Obama’s tremendously successful campaign. He was able to revive the energy of his base, leading to Republican losses in several battleground states like Ohio, Virginia, and Florida. In Massachusetts, which Obama carried by twenty-three points, Scott Brown was defeated despite enjoying a 60 percent approval rating. We also simply had bad luck, especially in North Dakota and Montana, the single biggest disappointments in the cycle. While we ran better candidates who executed superb races, we still lost. The third factor was that, reminiscent of what happened in 2010 in Delaware, Colorado, and Nevada, thanks to groups like SCF, we threw away two seats with unelectable candidates, this ti
me in Missouri and Indiana.
The election results were, on a personal level, extremely disappointing as it began to appear that I might never actually meet my goal of becoming majority leader. I was reelected as minority leader, and John Cornyn of Texas was elected as whip. I was very happy, knowing how much I would be able to count on this very talented colleague as my deputy, and I would not be disappointed. But the election results also mattered nationally and even globally, because we were about to encounter a perfect storm of problems. Just weeks after the election, on January 1, 2013, the two-year extension of the Bush-era tax cuts that Biden and I had negotiated in 2010 was set to permanently expire, creating more than $500 billion in tax increases. At the exact same time, the supercommittee we’d created during the debt ceiling negotiations locked up. Because of the Democrats’ desire to raise taxes as a condition of any long-term entitlement fix, we couldn’t come up with the $1.2 trillion in savings, which then triggered budget sequesters and deficit reduction measures. This confluence of factors, which, combined, could paralyze the US economy, was what Federal Reserve chairman Ben Bernanke referred to as “the fiscal cliff.”
Failing to act was not an option. The combination of higher taxes for nearly every American—an estimated $2,000 to $3,000 per family—coupled with cuts in most federal programs, would be too much all at once for our still-weak economy. The cuts to the deficit included a $55 billion reduction in the Pentagon’s budget and across-the-board spending cuts. The question was not if this would be bad for the economy. The question, once again, was what to do about it.
Speaker Boehner and I were prepared to fight for the Bush-era tax cuts to extend to all Americans on a permanent basis, but we also had to be realistic. A cornerstone of Obama’s reelection campaign was the promise to increase taxes on the wealthy. It was not possible that the Democratic-controlled Senate would pass the bill we wanted—a bill that was in direct opposition to Obama’s promise—or that Obama would sign it. Knowing we couldn’t get our preferred policy enacted, we needed to determine how to give the White House the least amount of revenue possible while still maintaining as much of the tax cuts as we could. And all by midnight on New Year’s Eve.
The House and the White House once again deadlocked. Obama was insisting that the Bush-era tax cuts should not apply to those who earned more than $250,000 a year. By allowing taxes to rise on those making more than that, Obama believed we’d help cut the deficit. But we wanted the tax cuts to extend to everyone. Taxing the wealthy hurts job growth, and under the administration’s proposal, there was far too much of a cut to the military.
For several weeks I stayed behind the scenes while others tried, with little success, to find an acceptable compromise. Just before Christmas, Boehner presented his conference with the so-called Plan B, which included raising taxes only on those earning more than $1 million annually. But he couldn’t get the votes to pass it, forcing him to withdraw the bill and abandon negotiations.
During the Christmas weekend, Elaine and I attended a family wedding in New York before returning to Louisville to spend a quiet Christmas with my daughters. It was a welcome break from work, but I have to admit, I felt distracted and uneasy about where things were headed in the face of no compromise. The day after Christmas, I knew it was time to call Sharon Soderstrom, who’d gone home to visit her family in New York.
“I think it’s time to get involved here,” I said. “Nobody in DC is talking to anyone else. If we don’t act, taxes are going to go up on everyone in just five days. What do you think?” I trust Sharon so much that if she had said this was the wrong move, I would have largely reconsidered my plan.
“I think I’m coming back tonight,” Sharon said. “And I’ll get everyone else back as well.”
For the next few days, as most people in the country were enjoying the holiday break, my staff was back to working marathon sessions. On the afternoon of December 28, Obama called a meeting of the congressional leadership at the Oval Office. The meeting, which lasted about two hours, went exactly as I had expected. We—me, Nancy Pelosi, Harry Reid, John Boehner—all received a lecture from Professor Obama. On this day, however, Obama’s condescending attempts to lecture us about why everything we were negotiating for was wrong were particularly annoying, given that we were seriously under the gun. Even if he had, by some magic stroke of argumentative furor, been able to convince Boehner and me that we should raise taxes on every American, and that we should increase the death tax—the unfair tax the government levies on the transfer of an estate after its owner passes away—we surely weren’t going to sell any of it to our colleagues. He knew that, and he had to have known how much time he was wasting.
The same was true for Nancy Pelosi. Her role in these meetings (as with most meetings) was to come with one talking point and repeat it again and again. On this day, the talking point she’d been handed must have said “Don’t forget the children.” She must have uttered this phrase a dozen times in her attempts to get us to change our thinking on the death tax.
Obviously we got nowhere, and at the end of the meeting, Obama offered a closing suggestion. “Mitch, Harry,” he said. “Why don’t you guys talk and try to figure this out?” In other words, a meeting that took up two hours’ time of the leader of the free world and the four leaders of the US Congress ended with a suggestion that we talk. Those two hours would have been more productive had I spent them napping.
Despite my frustration, we still had to find a way to strike a deal to keep our economy from tanking. The next day, on December 29, instead of being at the U of L vs. UK basketball game as I had planned, I called Harry Reid at 7:00 p.m. and submitted an offer, telling him it was time to get this done and that everyone in my office was willing to work through the night to find common ground if necessary. Reid assured me I’d hear back from him by ten o’clock the next morning, but by 2:00 p.m. I hadn’t heard a thing. It was clear he either didn’t want to deal or was waiting around for somebody else to tell him what to do. Either way, with just thirty-six hours until the deadline, people were, understandably, growing uneasy. The Defense Department was preparing to notify 800,000 civilians who help keep our military moving that some of them might be forced to take unpaid leave. The IRS had issued guidance to employers who would need to begin withholding more taxes from paychecks beginning Tuesday.
When it became clear that nothing was going to happen with Reid, I picked up the phone and called Joe Biden. He was in flight at the time, so I left him a message.
“Is there anyone over there who knows how to make a deal?” I said. “I need you to get up to speed on this, Joe. Get off the plane, think about things, and call me in an hour.”
In case I wasn’t making myself perfectly clear that I was not going to allow our country to pass the deadline the next night and face the consequences, I went to the Senate floor. “I am concerned about the lack of urgency here,” I said, referring to Reid’s failure to get back to my proposal. “There is far too much at stake for political gamesmanship.” I then revealed that I had just placed a call to the vice president to see if he could help jump-start the negotiations on his side. There was no single issue that remained a sticking point. The only sticking point was the willingness—and the courage—to close the deal. “I want everyone to know I am willing to get this done,” I said. “But I need a dance partner.”
Biden had heard me loud and clear, and we finally spoke at 12:45 a.m. on Monday. And then again at 6:30 a.m. And then multiple times throughout the day. At one point, the talks looked like they might be headed toward a stall.
“I think you should call the president,” Biden suggested. I called in Rohit and we set up the call. Obama was as helpful as I had expected.
“Rohit is being a real jerk about the spending offsets,” the president said, to my surprise, and my frustration. Personally criticizing a member of my staff hardly seemed like the way to negotiate a deal.
“Wel
l, let’s keep trying to bridge this divide,” I said, and then hung up the phone. “Are you being a jerk, Rohit?”
“No, sir, I don’t think so,” Rohit said. “All the suggestions I’m making are coming from the president’s own budget, which hardly seems like a crazy place to start.” He paused. “But it’s not every day the president of the United States calls me a jerk.”
That conversation went nowhere, but by the afternoon, Biden and I were able to work out our final differences and reach a deal. I briefed my conference and by 8:45 p.m., New Year’s Eve, we were ready to announce the news to the media and the American people. With all food services at the Capitol closed for the holiday, my staff was left to fend for themselves. As I returned to my office that evening, I thought I detected the smell of a campfire. Stef snuck by, surreptitiously carrying a stack of paper plates into my office.
“You hungry?” Sharon asked me.
“Very,” I said.
I followed her to the back room. Gathered around the fireplace—a fireplace that may have been as old as the Capitol itself—stood the members of my staff, grilling hot dogs.
“Why didn’t you tell me about this earlier?” I asked.
“We thought you might be mad,” Stef said.
“Why would I be mad?”
“We forgot to get mustard.”
The bill I’d helped write passed the Senate at 2:00 a.m. on New Year’s Day—the first time the Senate was in session between Christmas and New Year’s since 1948. Most of my members met this bill with a sense of relief, as did I, partly because I was able to make my flight to New Orleans a few hours later. That afternoon, as the members of the House gathered to vote on the bill, Elaine and I sat with some friends at one of my favorite Cajun restaurants, eating black-eyed peas for good luck in the new year. They worked. The bill passed the House and my beloved Louisville Cardinals crushed the Florida Gators in the Sugar Bowl the next day.
The Long Game Page 22