The New New Deal

by Grunwald, Michael

  “Honest to God, I had no intention of doing this,” Biden told me, with somewhat less than his usual honesty to God. “But it was all about credibility. People don’t think government can deliver.”

  Joseph Robinette Biden Jr. was determined to prove those people wrong.

  “Nobody Messes with Joe”

  “The first principle of politics, the foundational principle, I learned in the 1950’s in my grandpop’s kitchen.”264 Thus begins Promises to Keep, Biden’s 365-page stream of consciousness masquerading as an autobiography. And then he’s off, stopping at the Handy Dandy to get caps for his cap gun, checking out the live monkey at Mr. Thompson’s market, reenacting the latest Tarzan movie with Charlie, Larry, and Tommy, and so on for a few thousand words until he gets to grandpop’s principle. Except it’s two principles, one about equality, one about honesty. And then he’s off again, a few thousand more words about his heroes, his passion for the Senate, his tumultuous career, the horror of September 11, until suddenly he remembers grandpop’s real principle: “Get up! The art of living is simply getting up after you’ve been knocked down.”

  Joe Biden is an American original.

  He was a stutterer as a kid, teased as Joe Impedimenta and Buh-Buh-Biden, but he tirelessly practiced his elocution—Get up!—and is now a veritable tornado of verbiage. His first wife and baby daughter were killed in a car crash after his first Senate election. He was forced out of the 1988 presidential race over a plagiarism scandal, and nearly died of a brain aneurysm a few months later. But he’s always gotten up. He’s still an enthusiastic backslapper with a “hey man” for everyone, constantly respinning his favorite yarns, quoting his Scranton relatives, giving his solemn word as a Biden.

  Sure, he can be a gasbag; during one of Biden’s Senate soliloquies, Obama handed an aide a note that read: “Shoot. Me. Now.” Sure, Biden’s mouth often outruns his brain. He had just aired his off-message concerns about the stimulus: “If we do everything right, there’s still a 30 percent chance we’re going to get it wrong.”265 But that was Joe being Joe. Muammar Gaddafi once asked him why the United States still classified Libya as a terrorist nation, and he replied: “Because you’re a terrorist!” As an aide says, you never have to wonder what Biden thinks, because he just said it. He’s the least mysterious politician in Washington. And while Beltway types often caricature him as a buffoon, he’s smart in a nonacademic way, with an acute understanding of human needs. Some of the best-and-brightest Ivy Leaguers filling up the West Wing rolled their eyes at his simplistic comments—okay, okay, we’ll explain what this means for an ordinary middle-class family—but he had some insights that they lacked.

  By the time Biden moved into his office—which, while indeed slightly smaller than Rahm’s, had priceless portraits of former vice presidents John Adams and Thomas Jefferson on the walls—he no longer doubted Obama’s readiness.266 In private, Biden could still mock the president’s people skills, chilliness, and inability to curse properly. When talking about policies, he often said the president “gets it,” a condescending Bidenism for “agrees with me.” But he also talked up his boss in genuinely awestruck tones: a steel backbone, a brain bigger than his skull, a heart in the right place, a guy who gets the facts and makes the call and never looks back. After watching Obama’s crisp decision making during the transition, he told Klain: They got the order of this ticket right. Obama warmed up to Biden, too. He was a straight shooter, giving the blunt advice presidents often have trouble finding. “He wanted me to be the bastard at the family picnic, which, politely, I am,” Biden says. He had Beltway knowledge that Obama lacked, and he embraced the personal-contact side of politics that Obama found tiresome; his Energizer Bunny salesmanship had come in handy during the stimulus debate. A week after signing it, Obama announced that Sheriff Joe would be his enforcer, holding mayors, governors, and cabinet members accountable for every buck.

  “Because nobody messes with Joe,” Obama said with a smile.

  Over the next two years, Biden would convene twenty-two cabinet meetings on the Recovery Act, more than the president would convene on all topics, and visit fifty-six stimulus projects. He’d host fifty-seven conference calls with governors and mayors, and spend countless hours checking in, buttering up and banging heads to keep the cash flowing. He’d speak about the stimulus with every governor except Sarah Palin, who abruptly resigned to pursue a career in punditry and reality TV before he had a chance. He’d also block 260 Recovery Act projects that didn’t pass his smell test, from recreational bike paths to skateboard parks to a $120,000 Army Corps of Engineers plan to print brochures advertising a lake cleanup in Syracuse.267

  “We said, ‘Hey, man, put it on a website,’” Biden says. “Stupid little thing, but it saved that dollar amount.”

  Another time, Republican Pat Roberts complained on the Senate floor about a Kansas highway that was about to be resurfaced with stimulus money, just in time for heavy trucks working on a nearby stimulus-funded environmental cleanup to rip up the road again. Biden says he immediately picked up the phone and told the Transportation Department to rearrange the schedule: “Hey, man, don’t pave that road before the project is finished with the heavy trucks. Flip it!” The next day, Roberts sheepishly returned to the floor. “The White House moved in an expeditious fashion,” he admitted. “Quite frankly, I didn’t expect they could move that fast.”

  Biden heard that a lot about the Recovery Act, and he developed a stock response: “Look, I’m in charge of it, man. My rear end is on the line.” If the Recovery Act perpetuated business as usual, he often warned, Americans would never trust government again. So he promised state and local officials that any stimulus-related question would be answered within twenty-four hours, stunning his own staff as well as the officials. “If you have any problems getting an answer, just call me,” he told them. “People used to call me all the time. I miss it!” He demanded monthly updates on major projects, even though the law only required them quarterly; he told the cabinet that anyone who had a problem with that could take it up with Obama.

  Biden often stressed that the push for accountability was coming from his boss. Obama frequently grilled him about the Recovery Act, especially about waste and fraud. At an introductory meeting in Washington for stimulus coordinators from every state, there was a gasp when Obama barged into the room unannounced, as if Santa Claus had arrived during a reading of “The Night Before Christmas.”

  “All of you are on the front lines of what is probably the most important task we have in this country,” he said.268 He gave a stirring pep talk, but he also warned that his administration wouldn’t stand for misspent money. Keynes might not have cared if stimulus cash got into the economy in a messy or crooked way, but in the words of Biden’s devoutly Keynesian chief economist, Jared Bernstein: “I’m loath to be critical of the master, but that’s not how we rolled.” Scandals wouldn’t just be bad politics; they could stop the stimulus in its tracks, which would be disastrous economics.

  “If someone can prove we wasted a billion dollars, it’s gone, man!” Biden told his staff. “Gone!”

  Biden and Obama sent a zero-tolerance message from the top. But human nature being what it is, they also wanted a tough cop walking the stimulus beat.

  Earl Devaney was ready to retire to Florida. He had spent forty years in law enforcement—as a local officer, Secret Service agent, and finally inspector general for the Interior Department, where he had exposed the sex-and-drugs scandal among Bush’s oil regulators and broken open the Jack Abramoff lobbying scandal. When Biden summoned him to chat about running the new Recovery Accountability and Transparency Board, he practiced saying no to the vice president in the mirror. But once he arrived, Biden immediately ushered him into the Oval Office. “I hadn’t practiced saying no to the president,” Devaney says with a rueful laugh. “Hey, I’m Secret Service.”

  A few minutes later, Obama was introducing Devaney to the nation as the new independent stimulus watchdog.
Golf in the sunshine would have to wait.

  “I hadn’t even mentioned anything to my wife,” Devaney recalls. “Someone told her: ‘Hey, your husband’s on TV.’ Whew. Mother’s Day was expensive that year.”

  Devaney has the gift of gab, but as Biden says, he is one hard-ass dude, a hulking former college lineman and a junkyard-dog investigator. On his first day on the job, Biden told him: Earl, I know we’re at arm’s length now, but I’d like to ask a favor. If you see anything going wrong, please tell me so I can announce it.

  “That’s a novel idea,” Devaney said. “But sorry, we can’t.” And he didn’t.

  The next day, Devaney had a request for Biden. The White House had put together the initial version of recovery.gov, the official stimulus website, and had just handed it over to Devaney to run independently. But on the home page, the lead video was Obama hailing the importance of transparency and accountability, which didn’t send a very independent message.

  “Mr. Vice President, the video’s got to go,” Devaney said. And it did.

  Now Devaney had to set up new systems to follow all the money, an unglamorous task he compared to building a ship while it was leaving the port. His so-called RAT board had five months to create a centralized reporting system from scratch, to track what tens of thousands of stimulus contractors were doing with their money. The board also had to scramble to upgrade recovery.gov, so that citizens could look up every grant, loan, and contract online. Meanwhile, in a nondescript office building near the White House, Devaney set up a state-of-the-art command center that felt like a mini–Mission Control, where investigators from the worlds of finance and intelligence as well as law enforcement could use advanced software tools to prevent and detect fraud. When I visited, they were tracking a day care operator who had been flagged electronically after receiving a grant to help crime victims. Database checks suggested she was more likely to create crime victims; she had been disqualified from federal contracting in the past, and her corporate documents revealed links to all kinds of sketchy enterprises.

  “This is a completely new way of doing oversight,” Devaney told me. “The old way was: Whoops! The money’s missing. I wonder who took it. Now it’s: Hey, there’s a risky situation. Let’s stop the fraud before it happens.”

  According to Devaney and other watchdogs, Recovery Act fraud has been virtually nonexistent. Devaney thinks there were just too many eyeballs on the stimulus money; any minimally intelligent criminal would go after different money. Outside experts had warned that 5 percent of the stimulus could be stolen, but by the time Devaney finally got to retire at the end of 2011, the RAT board had documented only $7.2 million in losses, about 0.001 percent.269270

  “It’s been a giant surprise,” Devaney says. “We don’t get involved in politics, but whether you’re a Democrat, Republican, communist, whatever, you’ve got to appreciate that the serious fraud just hasn’t happened.”

  People don’t appreciate that, because fraud that doesn’t happen gets about as much media coverage as planes that land safely.

  Biden was glad to have a bulldog of a cop patrolling the stimulus. But as he told Ed DeSeve, a Clinton-era management official who had come to his office for a job interview, what he really needed was a crackerjack CEO running it. The fireplace in Biden’s office was roaring, and DeSeve—another big-boned guy who used to match up with the legendary linebacker Chuck (“Concrete Charlie”) Bednarik in pickup hoops games “about forty years and forty pounds ago”—was sweating through his wool suit. He figured, what the heck, maybe this will be a short interview.

  “With all due respect, sir, I don’t think you need a CEO,” DeSeve said. “You need a coordinator.”

  The cabinet was stocked with CEOs. America’s statehouses had fifty CEOs. Biden didn’t need someone to tell them what to do. He needed someone to keep them on the same page, hold them accountable for results, and help them troubleshoot problems. DeSeve was a student of management, and he thought the Recovery Act, like the war on terror or a hurricane response, required a network, not a command-and-control hierarchy. He didn’t think the job called for a team manager; he envisioned it more like a league commissioner.

  DeSeve got the job. He also got a closet of an office with a view of scaffolding, which sent a penny-pinching message to visiting politicians and corporate titans. He got a team that never exceeded eight people. But he didn’t need fancy trappings or a big staff; all he needed was the authority to help the trains run on time. He was given three titles to reflect the high-level support for his mission, as a top aide to Obama, Biden, and Orszag. He attended Rahm’s staff meeting every morning, and ran daily conference calls with every agency. The message from the top was simple: This is a big deal. Don’t blow it.

  The White House’s main concern was the spending deadlines. Dollars parked in the Treasury would not stimulate the economy, and busted deadlines would create failed-stimulus political feeding frenzies. So DeSeve’s list of his top priorities on his office wall started with “Get The Money Out” and “Get The Money Under Contract.” Often, that would be relatively easy. Making Work Pay, food stamps, and most of the other tax cuts and safety net benefits would start going out the door almost automatically. Aid to states was mostly a matter of tweaking formulas and cutting checks; the first Medicaid dollars went out on Day Eight. New funding for existing programs to help local police forces hire new officers or Americorps take on new volunteers didn’t worry DeSeve, either. The feds would just pour money into the top.

  But getting transformative programs like health IT and Race to the Top up and running would be a brutal challenge. An obscure Commerce Department agency with a $19 million budget was supposed to distribute $4.5 billion in broadband grants.271 A small safety agency inside the Transportation Department would run the $8 billion high-speed rail initiative. The sclerotic Energy Department would be responsible for a mind-boggling 144 stimulus programs. As the Biden Bridge illustrated, traditional infrastructure projects would be a struggle, too. And when Obama launched the Recovery Act in mid-February, he hardly had any appointees in place to deal with all these problems. Only two of his fifteen cabinet departments had deputy secretaries in place, and three didn’t even have confirmed secretaries.272

  The bureaucratic blocking and tackling that got the money moving was not the stuff of epic poetry. Peter Orszag’s sixty-two-page single-spaced implementation memo, which was sent to every agency the day after the bill signing, was not gripping literature.273 But a week later, HUD secretary Shaun Donovan announced that his notoriously troubled agency had obligated 75 percent of its stimulus funds to local housing agencies. “That was a jaw-dropper,” Donovan says. The Recovery Act required the similarly calcified Labor Department to rule within fifteen days on all appeals by laid-off workers denied COBRA health subsidies—and the department didn’t even have an appeals process in place. “It seemed like Mission: Impossible,” says deputy labor secretary Seth Harris. The department would receive over 25,000 appeals, and would adjudicate 99.8 percent of them within fifteen days.

  Harris likes to tell the story of 13(c), a preexisting rule that requires his department to sign off on all transit grants, usually after a few months of haggling between transit officials and their unions over labor issues. But the Recovery Act had use-it-or-lose-it rules, so its $8.4 billion in transit grants needed speedy approvals. “I was waking up in the middle of the night screaming: 13(c)!” Harris says. “The vice president was pounding on the table saying: Get the money out! The grants were going to get delayed, and it was all going to be our fault.” But after intense outreach by the department—calls, meetings, “webinars”—most stakeholders agreed to skip their usual 13(c) confrontations. The grants all went out on time. “It’s probably not the most exciting story,” Harris says. “But this could have been a gigantic barrier to success.”

  Every agency had to report on every stimulus program every week, so DeSeve could see in real time when programs lagged behind schedule. One chro
nic problem was the Environmental Protection Agency’s water and sewer projects, and after DeSeve’s chats with agency officials failed to solve it, Biden called in EPA administrator Lisa Jackson for a come-to-Jesus chat. After she explained the contracting bottlenecks, Biden called some of the laggards around the country and threatened to take their money back. “To tell the truth, I wasn’t sure I had the authority to take the money back,” Biden recalls with a grin. The deadline for getting those EPA projects under contract was the Recovery Act’s one-year anniversary, and DeSeve says the last contract was signed just a few minutes before midnight.

  Two months later, at the same cabinet meeting where Secretary Chu explained his swing-for-the-fences theory of clean-energy research, I watched Biden badger the cabinet about another upcoming deadline as if he were a junior high teacher. He warned that if any agency couldn’t hit its targets, he wanted a written explanation. “I know I’m harping on this,” he said. “But guess what, folks? We’re going to be held accountable. And we have No. Margin. For. Error.”

  Biden then put Secretary LaHood on the spot, asking why transportation spending was behind schedule. Like the kid in the back row who hadn’t done the reading, LaHood started stammering about bad winter weather, then quickly realized that wasn’t the right answer, especially now that it was springtime. “No excuse. We need to hold everyone’s feet to the fire,” he said. “We’ve got to tell these governors to get the contracts out.”

  The vice president’s face lit up. Just give me some names, he said. I’ll call from Air Force Two tonight. “It’s the new slogan!” he said. “You don’t say no to Joe!”