John Boehner

John Boehner: Late last Sunday morning, House Speaker John Boehner and his No. Two, majority leader Eric Cantor, found themselves in White House Chief of Staff Bill Daley’s West Wing office listening to Treasury Secretary Tim Geithner say them how tax reform, if done right, could produce $800 billion in new revenues over the next ten years through growth and by closing loopholes. Sensitive to an anti-tax promise taken by most of the House Republicans, the White House felt this would be a way to raise revenues without breaking the pledge. Cantor was not sure such a deal could pass the House, but Boehner seemed intrigued. Morning turned to afternoon and the meeting ended. The proposed deal would come with closely $1.7 trillion in spending cuts, admitting important concessions from Democrats on entitlements such as raising the Medicare eligibility age from sixty-five to sixty-seven and other cuts to benefits. Both Obama and Boehner left hopeful that a larger-than-anticipated deal on deficit reduction might be within their reach. It was the closest the two sides would come to a grand bargain to stem the tide of federal red ink and raise the borrowing limit. On Tuesday morning, the long-neglected bipartisan Senate Gang of 6, which had been acting for six months on a deficit reduction deal, made a surprise proclamation: Not only were they all back at the table - Oklahoma Republican Tom Coburn had left the group in mid-May - but they would agreed on a rough framework. Frustrated by weeks of inaction as leaders negotiated a bill behind closed doors, Senators from both parties happily looked into the $thirty-seven trillion proposal. Obama even welcomed it, saying it could help provide the basis of the deal. Little did he know, the Gang was unwittingly about to derail his negotiations with Boehner. On Wed morning, congressional Democrats began to grumble. If three GOP Senators - really 4, as Lamar Alexander, the Senate’s No. Three Republican had since signed on - could embrace the Gang of 6 plan, then why could not Obama get Boehner to agree to more revenues? The Gang’s framework called for $2 trillion in new revenues over the next ten years. “Mr. President, can you explain why you were offering a deal that was more generous than the Gang of 6, which you appeared to be embracing on Tuesday when you were here?” a reporter asked Obama at a Friday press conference just later the talks collapsed. Because what had become apparent was that Speaker Boehner had some difficulty in his caucus,” Obama responded. “There’s a group of his caucus that really think default would be okay and have said that they'd not vote for increasing the debt ceiling under any circumstances. Also on Wednesday morning, Office of Management and Budget Director Jack Lew was meeting with congressional staff at the White House to hammer out some of the trickier details. The bill would have to be split in 2 because of time constraints: Getting a grand bargain through Congress would take more than the then thirteen days left before the America. began to cut services to avoid defaulting on its obligations on August two. Most of the spending cuts would come with the 1st vote, earlier the deadline, and would includd caps on discretionary spending for the next ten budgets. The 1st bill would also admit some short-term stimulus like an employer payroll tax holiday. Next came the hard part: enacting sweeping tax and entitlement reform earlier the end of the year. Some strong incentives for deal-making were added to ensure both would get done. For Republicans, that incentive was the threat of losing the Bush tax cuts: fail to achieve entitlement and tax reform by the end of the year and the tax cuts for the wealthiest would be allowed to lapse. Knowing that the revenue increases would still be a tough sell to Republicans, Cantor’s staff suggested undoing the individual mandate in health care reform and getting rid of the Independent Payment Advisory Board (known as “death panels” to Sarah Palin). Cantor had been brought into the negotiations later his opposition brought down Obama and Boehner’s 1st grand bargain in early July. The Virginia Republican knows the feisty freshman class well, and if he were to sign off on a deal, it would go a long way to bringing the Tea-infused right on board. Cantor’s chief of staff argued that putting Obamacare on the table - the one thing loathed by Republicans even more than tax hikes -  would make the deal harder for Republicans to resist. Perhaps too hard. The White House was not keen to risk it. The meeting ended when Lew had to leave for the Senate to brief Democrats on the state of the talks. “There wasn't a deal, because we'd several significant open issues,” a senior White House official said, describing the feeling coming out of that meeting. “But, if you had asked me, ‘Are we close?’ I'd have had said, ‘Yes, we are close.’ Lew went to the Hill where he found a Democratic caucus in full revolt. Maryland Senator Barbara Mikulski practically yelled at him. California’s Diane Feinstein grilled him. “I am the majority leader,” Harry Reid demanded, “why do not I know about this deal?” There is no deal, Lew responded. But the White House got the message: Democrats were concerned Obama was conceding too much to Republicans. So, in a call on Thursday afternoon, the President went back to Boehner and asked for $400 billion more in revenue increases. “I understand you may not be able to come up on the revenue, and if you can’t, I am open to doing something else,” Obama told him, according to another senior White House aide. “We can come down on the revenue and we have to lighten up the mandatories, the entitlements, a little bit.  We can come together on this. We just have to get rid of putting the individual mandate in the trigger, which I think on its face, is something that was brought in for causes that weren't directly related to deficit reduction. But Boehner argued that he did not see a way to raise fifty% more revenue ($400 billion on top of $800 billion) without being forced to break their pledge and raise tax rates - something Boehner said would ne'er pass the House. “I can tell you it’s not in the finest interest of our country to raise taxes during this hard economy, and it’s not in the finest interests of the country to ignore the serious spending challenges we face,” Boehner told reporters in his own post-collapse press conference on Friday. “Listen, it’s time to get serious, and I am confident that the bipartisan leaders here in the Congress can act.  If the White House will not get serious, we will. The Gang of 6s plan, meanwhile, was also reverberating through the GOP’s ranks. The plan had lower tax rates the highest was at twenty-nine% versus the thirty-five% under the Obama/Boehner framework with higher revenues. Both sides say these numbers aren’t realistic. But Republicans began to question if they, too, were getting the best possible deal. Obama tried to call Boehner after Thursday night to follow up, but Boehner did not return the call. Still, Obama had so much faith that there would be a deal that on Friday morning, Reid yanked Senate plans to pass their own debt ceiling version legislation so that the White House could focus on negotiations with the House. After that afternoon, at 5:31pm, Boehner told the President - for the 2nd time - it was over. He was again walking away from the negotiations. “At some point,” Obama said, wrapping up his post-collapse press conference, “I think if you want to be a leader, then you have got to lead. Is the deal really dead this time? Boehner’s office says yes. But Obama and congressional leaders still must find a path forward, lest the government face disaster. And so Obama, Boehner, Reid and House Minority Leader Nancy Pelosi and Vice President Joe Biden will begin anew, again, at the White House Saturday morning. “We'll get an extension of the debt limit and we'll not default. I'm confident of that,” Obama said on Friday. “I'm less confident at this point that folks are willing to step up to the plate and actually deal with the underlying trouble of debt and deficits. That requires tough choices.” And the time for making them has run out.John Boehner