The 10 juiciest tidbits from the ‘fiscal cliff’ talks

January 3, 2013

Three excellent reconstructions of the fiscal cliff talks have been released by the Washington Post, the National Journal, and Politico. Here are the juiciest and most important parts:

Republicans did not believe President Obama would hold firm on increasing rates

No, you blink first. (Jewel Samad / AFP/Getty Images)

From the National Journal: "The speaker’s team fell prey to overconfidence. They just didn’t believe that Obama meant what he said about raising tax rates for the wealthy. 'That he has to have increases in the top two rates come hell or high water was the president’s campaign position,' one of Boehner’s aides said shortly after the election. 'That’s not necessarily his governing position.'...Yet when Boehner’s aides started haggling with their counterparts at the White House in the days before Thanksgiving, they ran into a wall. There would be no deal without higher tax rates on the wealthy and an extension of the debt limit, the president’s aides said. Take it or leave it. The president was willing to dive off the cliff."

This is more important than it might seem: If the White House had agreed to raise revenue through tax reform, there'd be no way to raise revenue through tax reform in future negotiations. Because the White House raised its revenue through increasing rates, it can still raise revenue through tax reform in a future negotiation. 

Obama spent a lot of time lecturing Speaker Boehner during meetings

Let me finish. (Pete Souza/White House)

From the National Journal: "The president spoke almost the entire 50-minute meeting, telling Republicans that if he did not get an agreement he liked, he would spend the next four years blaming them for what could turn into a global recession. The blame game would begin in earnest with his Inaugural Address and would follow up with a repeat performance in the State of the Union, a GOP source recalled. If they deny him now, he said, he would block future spending cuts for the next four years."

From Politico: "The president — speaking for 45 minutes in a 50-minute meeting, Republicans said — suggested they could find a middle ground but warned that if they did not, he would use his inauguration address, State of the Union speech and every other lever of power to lash Republicans."

The White House tapped Tim Geithner to protect Jack Lew

More evidence Jack Lew will be the next Secretary of the Treasury? (Bloomberg)

From Politico: "The president asked Geithner, rather than White House chief of staff Jack Lew, to serve as his chief negotiator. The move pleased Republicans who hadn’t liked Lew’s negotiating style during the 2011 debt limit talks. But that wasn’t the main reason Lew was kept out of the spotlight: As a top choice to replace Geithner at Treasury, Obama was 'saving him,' reluctant to embroil him in tense negotiations if he needs the Senate to approve his nomination."

Republicans watch too much Mad Men


Save us, Don Draper! (Michael Yarish - AMC)

From Politico: "Republicans began to fret about losing the PR fight. In a closed-door meeting, some GOP House lawmakers suggested that each member kick in $5,000 to hire a big Madison Avenue advertising firm to craft a communications strategy for them. But Boehner and other party leaders quickly shot down the idea."

McConnell used the talks to try to scare Democrats off filibuster reform


This is going to get ugly. (Alex Wong - GETTY IMAGES)

From Politico: "The bad blood was evident from the start. When Obama sat down for an opening meeting with congressional leaders on Nov. 16, McConnell attacked Reid over the majority leader’s proposal for filibuster reform, an issue that had nothing to do with the fiscal cliff talks. The broadside stunned others in the room."

The secret, second half of Boehner's "Plan B"

John Boehner had a plan. (AP Photo/Jacquelyn Martin)

From Politico: "In a phone call Dec. 21, Boehner told Obama that his game plan all along was to pass the bill setting the $1 million threshold, send it to the Senate to drop it down to $500,000 or so, and ship it back to the House for approval. Obama, perplexed by the secret strategy, asked Boehner whether he had shared it with Reid or House Minority Leader Nancy Pelosi (D-Calif.), suggesting that they might have helped him. Boehner said he had not."

John Boehner did not have a good week


Tough times for John Boehner. (Jonathan Ernst/Reuters)

From the Washington Post: "When Boehner saw Reid at the White House, the normally amiable speaker was steaming. 'Go f--- yourself,' he said, pointing a finger at Reid, according to both Democratic and Republican aides who were there. 'Excuse me?' Reid responded. Boehner repeated himself. Reid just stared."

"The meeting went ahead. Democrats talked tax rates and trade-offs with McConnell. But Boehner refused to engage, sitting stone-faced on a deep couch. Reid pestered him with questions. House Minority Leader Nancy Pelosi (D-Calif.) tried to play good cop. 'John,' she said, 'Are you going to try to be a little bit constructive?' Boehner would not. 'The House has acted,' he said. 'It’s up to the Senate.'"

House Republicans don't trust Mitch McConnell


Wouldn't a real conservative be wearing a red tie? (Chip Somodevilla/Getty Images)

From Politico: "McConnell, worried about the fallout for Republicans if there were no deal, was privately floating a 'two-bill strategy' — one to extend the current tax rates for everyone and another to allow taxes to increase on the wealthiest Americans. That infuriated House Republican leaders, who believed McConnell was undermining their talks with Obama. Some House Republicans mistrust McConnell more than they do Obama or Reid because they are confident they always know where Democrats stand, unlike the Kentucky Republican."

House Republicans chose to pass the deal


House Republicans knew what they were doing.

Don't believe their "no" votes. House Republicans had a chance to kill the deal and they chose, instead, to let it pass.

From National Journal: "Boehner, still smarting from his Plan B fiasco, decided to leave it up to his members to decide between two options. In another closed-door conference, rank-and-file Republicans were told that Whip Kevin McCarthy would do a count of those who wanted to push for the spending cuts. If 218 of them committed to doing that, a measure would be brought to the floor, passed, and sent to the Senate. But Boehner, joined by Cantor, also cautioned about the risk entailed in such a strategy. They advised that there would be no guarantee the Senate would act on such an amended measure, leaving the House holding the bag. In the alternative, the members were told that if a commitment of 218 votes was not found, the House leaders would bring up the Senate-passed measure for an up-or-down vote. The leaders’ warnings about the perils of amending the bill ultimately took hold."

Harry Reid is not a huge fan of the White House right now


Into the fire! (The Washington Post)

From the Washington Post: "Reid and Obama had disagreed privately about what their next offer should be. At one point, Reid was unhappy with an idea that Senate aides said came from Obama — to put the change in Social Security benefits back on the table in exchange for a delay in spending cuts and a rise in the debt limit. Aides said Reid actually tore up the proposal and threw it into the blazing fire in his ornate green marble fireplace. The paper burned. Reid said he didn’t want evidence that the idea had ever been considered."

That story also appears in the Politico article. Reid's office might have wanted to destroy the paper, but they want it known that the White House considered putting chained-CPI back on the table, and that they killed it.

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Neil Irwin | January 3, 2013