Allen West, a frustrated tea party freshman from Florida, derided the 2011 budget cuts as “a raindrop in the ocean” and said House leaders needed to have a “come to Jesus” moment.
“I like people to be upfront with me. Surprises are for birthdays,” West told reporters.
In the midst of that battle, Ryan rolled out his 2012 budget blueprint, in part to revive his party’s flagging spirits. As chairman of the House Budget committee, Ryan had a high-profile platform to pursue the Young Gun agenda.
Republicans enthusiastically embraced his plan to privatize Medicare for future retirees, slash spending on Medicaid and sharply reduce tax rates for corporations and the wealthy.
Still, the success of the Ryan budget in the House (it never passed the Senate) couldn’t fully erase the bad taste of the first bite of the budget apple. South Carolina’s Scott called the battle over the 2011 budget a “defining moment” for the newcomers. “It strengthened our resolve to stick together,” he said, “not necessarily against anyone, but for the people back home.’’
Others felt the leadership built up expectations even more by suggesting that the real battle lay ahead. Rep. Mike Coffman, a freshman from Colorado, said the message from Boehner and Cantor was clear. “They were saying, ‘This is really not the place to take a stand. We’re going to have a lot more leverage with the debt ceiling.’ ”
Chapter 7: ‘Hold the freaking line’
At town halls back home, many GOP legislators encountered constituents who beseeched them to refuse an increase in the debt ceiling outright, or else not to vote for an increase without massive spending cuts.
Meanwhile, in the lightning-fast feedback loop of the Internet, a host of outside influences kept reminding the freshmen that their words and actions were being watched.
FreedomWorks and other tea party groups warned Republicans to stick to their fiscal promises. FreedomWorks president Matt Kibbe, declared, “There will be serious consequences at the ballot box for Republicans blinking on this issue.”
The Tea Party Patriots encouraged organizers in districts across the country to keep up the pressure on their representatives.
“We’ve got to keep watching them,” the group’s co-founder, Jenny Beth Martin, said as she wrapped up a hot afternoon of meetings on Capitol Hill. “Quite a few of them are blindly trusting the leadership, and that’s very disappointing.”
Martin warned that her group would recruit candidates to challenge any GOP lawmakers who wavered on the debt limit. Her threat revolved around a new verb that had begun to crop up in tea party circles. “I think we are going to see people who are ‘primaried’ next year,” she said.
Erick Erickson, editor of RedState.com, a conservative blog with a large following, attacked the House leadership’s apparent willingness to compromise. He implored rank-and-file conservatives to stand strong.
“Fear has no business entering into your negotiations,” he wrote. “There is no fallback. There is no alternative. Hold the freaking line.”
A similar message also came, in a quieter way, from the trade groups for the nation’s hedge funds and private equity firms. Their members had billions at stake, thanks to a White House proposal that would raise some tax revenue at their expense. As the July home stretch arrived, they had already spent $4.2 million on lobbying expenses for the year.
Chapter 8: Behind closed doors
At the White House, uncertainty colored the administration’s negotiating strategy. In private, Boehner acted as the same old negotiator he’d always been. But once he left the room to sell something to the firebrands in his party, he couldn’t seal the deal.
Twice during the battle over the 2011 budget, White House officials believed both sides had settled on a figure for spending cuts. Twice, they said, Boehner backed away after consulting with his caucus.
Still, Obama and his advisers believed Boehner and his troops might prove more flexible in talks aimed at meeting their demand for spending cuts to accompany the debt limit increase. Dramatic changes to Medicare proposed in the Ryan budget had sparked a public outcry. Democrats believed that Republicans would be eager to hide that stain by striking an agreement with Democrats to cut the program less sharply. The political downside: It would leave Democrats unable to use Medicare as an issue against Republicans in the 2012 campaign.
Obama, Vice President Biden and other White House officials firmly believed that it would be easier to sell a big deal, if it actually stabilized the debt, than trying to persuade lawmakers to vote for cuts that were both politically painful and too modest to solve the problem. “Don’t die on a small cross,” Biden was fond of saying.
By the time Obama teamed up with Boehner for a round of golf in mid-June, many in the administration believed that a bipartisan grand bargain that raised tax revenue and took a swing at Medicare costs could happen.
But when talk turned to new tax revenue, the Republicans kept shutting down.
In June, Cantor walked away from talks led by Biden after Democrats pressed him to accept a plan that limited some tax breaks for corporations and wealthier Americans in exchange for cuts to federal health programs. Cantor said it was up to Boehner to make such decisions. Boehner, meanwhile, engaged Obama in secret talks over a grand bargain. But he, too, walked away as Cantor argued that they couldn’t get the caucus to accept any tax hike.
“There was always a sense that Cantor had his finger on the pulse of the tea party crowd,” a Democratic official involved in the talks said. Cantor and Boehner both emphasized that the new hard-liners were a “different breed,” an “extreme force that could not be controlled.”
The official added: “I, for one, was never sure whether they were using this as a negotiating tactic or expressing genuine frustration.”
Boehner’s office acknowledged the newcomers’ effect on the negotiations. Asked about the leader’s tactics after the deal was made, spokesman Michael Steel said the early focus on the debt limit was dictated by the attitudes of the new majority. The leadership drove a hard bargain out of necessity, he said, knowing that anything less wouldn’t stand a chance of passing the House.
“We could see this fight was coming, because we had a new group of people who weren’t interested in the way Washington has always done business,” Steel said. “If they were going to vote for a debt-limit increase, they were going to need serious spending cuts and real reforms.”
Chapter 9: Doubts and suspicions
As the Aug. 2 default date drew closer with no deal in sight, GOP leaders intensified their campaign to convince the holdouts that the “adult moment” Boehner warned of last fall had arrived.
The leadership arranged for numerous experts from rating agencies and think tanks to brief the caucus on the likely consequences of default. One presentation, a slide show by a former Treasury official who served under President George H.W. Bush, soberly detailed the daunting choices that the government would face if it ran short of cash.
Some members were convinced. Others, including South Carolina’s Scott, were unmoved. Scott said he understood that breaching the deadline could inflict short-term pain. But without serious cuts, he said, “there won’t be a long term.”
The leadership, having made the debt limit into a rallying cry, was trying to make sure that the newcomers didn’t push too far. “Leaders like me would try to tell them: Look, no, really, we think it could be bad,” Ryan said. “They’d look at it with suspicion . . . If there was any semi-credible source saying default wouldn’t be so bad, they clung to that.”
Still, Ryan sympathized with their ardor and desire for change. “I was like that when I first got to Congress,” he said, recalling his time as an angry back-bencher, throwing procedural monkey wrenches into the gears of the House.
Ryan told the newcomers that he learned to work within the system without sacrificing his principles, and he tried to persuade them that they could do the same. He counseled them to be patient, to accept partial victory.
“You have to get a mandate from the country that’s big enough” — control of House, Senate, White House — “to do what we want to do,” he recalled telling them. “We don’t have that kind of mandate right now.”
Chapter 10: Burning down the house
In mid-July, Boehner tried again for a big deal. On Friday, July 15, as Capitol Hill began emptying out for the coming weekend, he invited White House chief of staff William Daley and Treasury Secretary Timothy F. Geithner to his office. With Cantor in the room, Boehner laid out an ambitious plan to tame the debt that would include a rewrite of the tax code that would raise an additional $800 billion over 10 years — the equivalent of letting the Bush tax cuts expire for the nation’s top earners, a key Democratic demand.
If White House officials had any skepticism that Boehner could deliver, they felt they had little choice but to engage him. The deal was big and bold, and White House officials believed it was worth going the extra mile to see whether it would work.
On Thursday, July 21, Obama’s senior advisers met at the White House with top aides to Boehner and Cantor. For two hours, they went line by line through the emerging agreement. It felt like they were “very close” to the promised land, a senior administration official said.
That afternoon, Obama called Boehner and gave him a choice: If you want aggressive entitlement cuts, I need more revenue. But if you can’t stomach extra revenue, we can dial back the entitlement cuts and still do something important.
The call went well, according to Democrats in the room. That evening, Obama met with Democratic leaders and told them to prepare for tough cuts to Medicare and Medicaid.
Twenty-four hours later, the deal was dead. Once again, Boehner walked away. Worse, from the administration’s point of view, Boehner’s rhetoric was growing harsher, at times echoing the most uncompromising voices in his new majority.
Administration officials now faced what they saw as a frightening possibility: That the controlling party in the House might be willing to “let the house burn down,” in the phrase bandied about at the White House — unless its demands were met.
Obama’s top advisers, surveying their options, decided to open some doors to compromising on their tax demands. In their view, with flames licking the rafters, House Republicans were not just slamming doors shut. They were locking them.
In the end, the White House backed off its demand for new tax revenue and agreed to a multi-phase deal that may produce only spending cuts. In return, Congress gave the Treasury sufficient borrowing power to pay the government’s bills through the 2012 election.
On the Hill, leaders congratulated themselves for averting disaster. Republicans considered it a win-win: deep spending cuts to come and no new taxes. But the markets were less impressed with the turn toward austerity. After slumping for days, they swooned Thursday amid mounting fears of a new global slowdown. On Friday, the rating agency Standard & Poor’s issued the first-ever downgrade of the nation’s credit rating, saying the “political brinkmanship of recent months” had shown evidence of “America’s governance and policymaking becoming less stable, less effective, and less predictable.”
The public shared the markets’ unhappiness. In a New York Times poll released Thursday, 82 percent of those surveyed said they disapproved of how Congress was doing its job, a record number. Republicans earned more criticism than Democrats.
For Democrats, the deal’s lack of new tax revenue was hard to swallow. But some believed they would be able to regain leverage this fall, when a new committee begins working to tame the debt, and late next year, when the Bush-era tax cuts are set once again to expire.
For Republican leaders, there was pride in a hand well played. “I think some of our members may have thought the default issue was a hostage you might take a chance at shooting,” Senate Minority Leader Mitch McConnell (R-Ky.) said. “Most of us didn’t think that. What we did learn is this — it’s a hostage that’s worth ransoming.”
McCarthy was more plain-spoken.
“Would Democrats have ever agreed if they thought the new freshman class was going to roll over? No. The freshmen made our hand so much stronger,” he said in an interview. “You had a fear of how far they would go. I’m sure the president looks back, too, and was fearful. But in negotiations, isn’t that the best thing?”
Chaffetz, who voted against both Boehner’s first proposal and the final bill, said he was well aware of how the leadership had used his and others’ willingness to let a default happen as a negotiating chip, and said he didn’t mind at all. “We weren’t kidding around, either,” he said. “We would have taken it down.”
For the freshman class, most of whom ultimately voted for the final deal, there was ambivalence about this bite of the spending apple. The cuts should have been deeper, many said, and the deal should have included a balanced budget amendment to the Constitution. Still, it recognized how far it had shifted the debate.
Rep. Tom Graves of Georgia, who arrived last year with strong support from tea party groups and Cantor’s PAC, voted no on the deal. Hours later, he changed into faded jeans to attend a $1,500-per-head fundraiser on his behalf, held at the AT&T box at Nationals Park, a classic Washington-style event. The next day, he was flying home for a corn roast in his district and looking forward to explaining his vote to his constituents.
“Unfortunately, it was a compromise,” he said of the deal. “Compromises led us into this mess, and you can’t compromise your way out of it.”
The House leadership, meanwhile, has already started to focus on maintaining its majority. Cantor and McCarthy, through their PACs, have together bestowed nearly $440,000 in early contributions to fellow conservatives, according to campaign financing reports.
Freshmen have received most of their largess: Of a combined 69 contributions made, 52 have gone to newcomers. Boehner’s PAC hasn’t made as many donations, contributing $170,000 to 20 of the freshmen, and 23 candidates overall, the reports show.
In July, the NRCC re-launched its Young Guns program for 2012. More than a dozen candidates have qualified as “on the radar,” the first step toward increased fundraising support.
McCarthy isn’t spearheading the recruiting effort this time around, but he hasn’t abandoned the search for diamonds in the rough. The ink on the debt deal was barely dry when he made plans to visit a potential candidate in Arkansas.
“There’s so much more to go,” he said. “We’re fighting for the long term. We’re always going to be striving for more.”