Characteristically, the White House unknowingly agreed to concede more to Republican congressional leaders Boehner and Cantor than the Senate so-called Gang of Six from both parties had agreed to in parallel negotiations. This promoted Obama and his aides, alarmed that they would "look like idiot negotiators" to the DP base and the public, to plead with Boehner for further modest tax concessions. But the Republicans, flushed with success from their mid-term sweep and confident of ousting Obama when his term expired, wouldn't budge. The article again powerfully illustrates the identity of interest and collegiality of the party leaders at the top and their distance from their respective liberal Democratic and conservative Republican supporters, from whom they anxiously made conscious efforts to shield their respective "betrayals". It's a very long piece, with only the more relevant details included.
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Obama’s evolution: Behind the failed ‘grand bargain’ on the debt By Peter Wallsten, Lori Montgomery and Scott Wilson Washington Post March 17, 2012
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Around 11 a.m. July 17, John A. Boehner, the House speaker, and Eric Cantor, the majority leader, had slipped through a side entrance, out of view from the bank of television cameras stationed near the front gate off Pennsylvania Avenue. The on-and-off secret negotiations were on again. They had resumed with a Friday meeting at the Capitol. And they seemed to be going so well by the time Obama returned from church that he invited Boehner and Cantor into the Oval Office to talk, just the three of them.
...Against the vehement advice of many Democrats, including some of his own advisers, Obama was pursuing a compromise with his ideological opponents, a “grand bargain” that would move into unmarked territory, beyond partisan divides, pushing both parties to places they did not want to go. Now might be the moment.
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>From the White House point of view, those few days show a politically selfless president willing to rise above the partisan fray and make difficult choices for the good of the country — if only obstinate Republicans would meet him halfway.
On that Sunday in July, Boehner, the old-school pol from Ohio, seemed willing to hash it out. He had met in private with the president and his aides many times. Their sessions were so sensitive — especially for the speaker, who was dealing with a House teeming with tea party rebels — that Obama’s aides were under strict orders to “protect Boehner” and not talk about his private entreaties. Obama liked Boehner; they got along well during the private sessions and a round of golf. But there was doubt in the White House as to whether the speaker could bring his party along. He “probably could not deliver a pizza,” was one administration aide’s skeptical assessment.
Cantor, a Virginian, was more closely aligned with the tea party wing. The fact that he was there, and had been involved since Friday, however reluctantly, was taken by the White House as an encouraging sign.
The conversation during that brief gathering inside the Oval Office did nothing to dampen the optimism. When the trio emerged and returned to the roomful of aides, Obama appeared upbeat.
“I want a deal,” he said.
The aides put down their muffins and BlackBerrys and snapped to attention.
Secrecy would be essential as the details came together, the president told everyone. He spoke openly with Boehner about how the two sides might sell the emerging plan to their respective parties, an imposing task from either end.
“How soon can we get this drafted?” the president asked, according to notes taken during the meeting by a top Republican staff member. When Obama left, the negotiations rushed forward, staffers on both sides now energized by the prospect of a deal.
Three days later, the grand bargain was cold and dead.
What happened? Obama and his advisers have cast the collapse of the talks as a Republican failure. Boehner, unable to deliver, stepped away from the deal, simple as that.
But interviews with most of the central players in those talks — some of whom were granted anonymity to speak about the secret negotiations — as well as a review of meeting notes, e-mails and the negotiating proposals that changed hands, offer a more complicated picture of the collapse. Obama, nervous about how to defend the emerging agreement to his own Democratic base, upped the ante in a way that made it more difficult for Boehner — already facing long odds — to sell it to his party. Eventually, the president tried to put the original framework back in play, but by then it was too late. The moment of making history had passed.
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Cantor and Boehner brought their top aides, including Barry Jackson, the speaker’s chief of staff, who had worked in George W. Bush’s White House. When they reached Daley’s office, the Republicans were handed a four-page document that made changes, typed in red, to an offer Boehner had made two days earlier, during a secret meeting at the Capitol.
A lot of red ink, the Republicans thought. But the major elements of a bargain seemed to be falling into place: $1.2 trillion in agency cuts, smaller cost-of-living increases for Social Security recipients, nearly $250 billion in Medicare savings achieved in part by raising the eligibility age. And $800 billion in new taxes.
In Boehner’s offer Friday night, the taxes came with strings attached. The Republicans wanted Obama to give up plans to raise the tax rate paid by the wealthiest Americans, now set at 35 percent. Instead, they wanted that rate to go down. They also wanted to preserve low rates for investment income — one of the biggest perks for the wealthy in the tax code — and establish a blanket exemption from U.S. taxes for corporate profits earned overseas.
Another key caveat: Much of the $800 billion would have to come from overhauling the tax code — not from higher tax rates. The Republicans believed lower rates and a simpler code would generate new revenue by discouraging cheating and spurring economic growth. If the White House would agree to count that money, the Republican leaders said, then they might have a deal.
That last condition was a problem. For years, Democrats have mocked the Republican argument that tax cuts pay for themselves by boosting the economy, an assertion for which evidence is scant. Many independent budget experts say the effect, if it exists, would be almost impossible to measure and useless in crafting a budget. Fiscal “snake oil,” some Democrats say.
So there were issues to work out that Sunday but also reason for optimism. In its counterproposal, the White House appeared to accept the $800 billion tax offer and a lower top rate. The administration rejected the exemption for overseas profits, but Geithner told the Republicans, they said, that he could get most of the way there.
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The next morning at the White House, top aides circulated Boehner’s latest offer throughout the West Wing. They met repeatedly in Daley’s office, scouring budget tables and Democratic vote sheets. By mid-afternoon, they told the Republicans that they were about to take a plan to the president for his approval.
A senior administration official said the White House team recognized that the two offers were coalescing and that the time for a decision was at hand. People asked themselves, the official said: Is this something we can sell? Is this a deal we can live with?
At the Capitol, the Republicans waited. Shortly after 6 p.m., Daley called Boehner’s office and said an update was on the way. None came, and four hours later, Jackson told his staff to go home. The White House, he said, was continuing to “massage their counter on all sections.”
The next morning, Nabors called Jackson with an ominous question: Have you heard about the Gang of Six?
Nabors was using the Beltway shorthand for a group of senators — conservatives and liberals — who had been working for months on a long-range deficit-reduction plan based on recommendations from a fiscal commission Obama appointed the previous year.
The group included Sen. Richard J. Durbin (D-Ill.), a close ally of the White House, and Sen. Saxby Chambliss (R-Ga.), one of Boehner’s dearest friends. Another participant, Sen. Tom Coburn (R-Okla.), was close to Obama and Boehner. The senators said they kept Boehner and administration officials informed about their work. They said the White House had been pressing them for months to put something out, believing that getting a few Republicans to sign on to any tax increase would build momentum.
“The fact that we had Republicans willing to discuss revenue was a breakthrough,” Durbin said. “That’s why [the White House] thought it might help move the conversation forward in the House.”
The Gang of Six was unable to seal its own deal. But that morning — a Tuesday — they finally revealed their work at a closed-door briefing for 64 fellow senators. Coming at that moment, it had an unintended effect.
Desperate to resolve the debt-limit deadlock, senators enthusiastically and publicly latched on to the proposal, which included more taxes and stronger protections for the poor and elderly than the still-secret Obama-Boehner framework. Dozens of senators emerged from the briefing praising the group’s work, including Republicans such as Lamar Alexander (Tenn.), then the third-ranking member of his party’s leadership team. The Gang of Six had “come to a bipartisan agreement,” Alexander told reporters, “and I support it.”
At the White House, Obama showed equal enthusiasm. He made a rare appearance in the White House pressroom, surprising reporters who had been awaiting the regular briefing from press secretary Jay Carney. As Carney stood to the side, the president hailed the plan as “broadly consistent with what we’ve been working on here in the White House and with the presentations that I have made to the leadership when they have come over here.”
In private, however, he and his aides were alarmed. The emerging deal with Boehner looked timid by comparison.
“The Democratic leaders already thought we were idiot negotiators,” Daley said. “So I called Barry [Jackson] and said, ‘What are we going to do here? How are we going to sell Democrats to take $800 billion when Republican senators have signed on to” nearly $2 trillion?
Daley added,“I don’t think it was a mischaracterization on our part to say we’d be beat up miserably by Democrats who thought we got out-negotiated.”
Inside the White House, the offer reflected the new political reality shaped by the Gang of Six. In light of that farther-reaching proposal, White House officials worried that the deal under discussion with Boehner would meet resistance, particularly among Obama’s Democratic supporters. Higher taxes explicitly targeted toward the wealthy offered an element of fairness, in the White House view, and a way to sweeten any deal for the Democratic base.
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That night, Obama prepared his party’s congressional leaders. He warned Senate Majority Leader Harry M. Reid (D-Nev.) and House Minority Leader Nancy Pelosi (D-Calif.) that he might return to the position under discussion the previous Sunday — that is, cuts to Social Security, Medicare and Medicaid in exchange for just $800 billion in tax increases.
Would they support him?
The Democratic leaders “kind of gulped” when they heard the details, Daley recalled.
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Reluctantly, Reid and Pelosi agreed to do their best to support the plan.
Boehner, meanwhile, had gone dark.
The House speaker did not return Obama’s call until 5:30 p.m. the next day, a Friday, when he told the president that he was again breaking off the talks. The two men staged dueling news conferences. Obama said angrily that he had been “left at the altar” again. Boehner said dealing with the White House was “like dealing with a bowl of Jell-o.”
“There was an agreement with the White House for $800 billion in revenue,” Boehner told reporters. “It was the president who walked away from this agreement.”
Two day later, July 24, one week after the Sunday morning meeting that sparked such optimism, the president found himself trying to turn back the clock.
Working late into the evening, Obama asked someone to get Boehner on the phone. His message: I’ll take your last offer.
“Mr. President,” Boehner answered, “we don’t have time to reopen these negotiations.”
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