Drama Boils Down to Tale of Two Men
Policy + Politics

Drama Boils Down to Tale of Two Men

Nobody returned the president’s call.

On Thursday afternoon, President Obama and House Speaker John A. Boehner (R-Ohio) had discussed a sweeping agreement that would have averted default on the national debt. On Thursday evening, Obama called back to talk more.

The president left a message, and waited.

Thursday evening turned to Friday morning. Morning turned to afternoon. Until then, President Obama said, he had believed a major agreement was close.

“Up until sometime early today,” he told reporters in a hastily called late-day news conference, “when I couldn’t get a phone call returned.”

By then, everything was in pieces. Boehner had called back and said he was backing out of the talks, blaming Obama for seeking increases in tax revenue. Obama had gone on television to blame Boehner, saying he had been “left at the altar” for the second time in a month.

The grand bargain was, apparently, dead — again.

Those 24 hours were the most dramatic in a weeks-long showdown, one that started as an effort to get the nation’s fiscal house in order but has also become a test of whether a government divided between hostile parties can function.

By Friday evening, as aides to each man recounted their versions of the same long day, a hopeful moment seemed to have vanished. The two sides seemed more divided and distrustful than ever. The only thing that had moved forward was the clock, ticking down to an Aug. 2 deadline.

“Sometimes it’s good to back away from the tree and take a look at the forest,” Boehner said at day’s end. “And yesterday afternoon, after the president demanded more revenue in this package, I came back . . . away from the tree to take a look at the forest.”

Friday’s events underlined how much this massive drama boils down to a story of two men. Twice in the past month, Boehner and Obama have been drawn together by the prospect of a sweeping deal — and then pulled apart by that deal’s potential price.

Aides said Friday was the culmination of talks between Boehner and the White House that began July 15, six days after Boehner pulled out of earlier discussions in a dispute over taxes.

By this week, aides said, Obama and Boehner were deep in the weeds of a potential agreement. In all, its provisions might have shaved about $4 trillion off the national debt over 10 years, which is $14.3 trillion and growing.

The deal, as envisioned by the two sides, would work in two steps. A relatively simple bill, short enough to hammer out in the next week, would have raised the debt ceiling and cut spending in the near term.

Then, Congress would have to work out broader changes to the tax code and huge entitlement programs such as Medicare and Social Security.

Among the ideas that seemed to be agreed upon:

• $1.2 trillion in cuts to “discretionary” spending, which includes the budgets of federal agencies.

• $250 billion in savings from Medicare. These might have been achieved by altering premiums for some programs, reducing payments to hospitals, and raising the eligibility age from 65 to 67 over time.

• Raising $800 billion in new tax revenue, achieved by closing some loopholes, while overhauling the tax code to make personal tax rates lower overall.

• Extending unemployment compensation for the long-term unemployed, as well as a one-year payroll tax holiday Obama won last year to help prop up the economic recovery.

But serious disputes remained. Boehner’s aides said the White House had upped its demands on taxes. From $800 billion, it wanted to add $400 billion in revenue, staffers said.

And, GOP staffers said, there was a dispute over a “trigger” inserted into the law. This was a provision intended to make sure the two sides kept their promises to return, after raising the debt ceiling, and reform the tax code and entitlement spending.

Boehner’s aides wanted something that would be painful for Democrats, to be sure they followed through. They suggested a trigger that would repeal two cherished elements of the health-care law: the individual mandate to purchase health insurance and a special board tasked with monitoring Medicare spending.

Obama’s staff said he wouldn’t agree to put those two provisions in the trigger. And Obama said he wouldn’t accept such large cuts to Medicare if Boehner wouldn’t accept that additional $400 billion in tax revenue.

On Thursday afternoon, these problems seemed serious, but not fatal.

Then Obama called Boehner back, and didn’t get him.

At the other end of Pennsylvania Avenue, Boehner had begun to pull back to see the forest.

“I spent most of the morning and afternoon consulting with my fellow leaders, members of our conference and others about the way to go forward,” Boehner said. After those discussions, he decided that the White House had demanded too much: the increase in tax revenue, particularly, was an insurmountable problem.

Obama called again, in early afternoon, and was told that Boehner would call at 5:30 p.m. As that time got closer, Boehner was chatting calmly with reporters in the Capitol, joking with one guy about his tan, and puffing on a cigarette.

Asked by reporters whether he was having a bad day, Boehner said: “Have you ever seen me have a bad day?”

Then he thought of one. It was the day in 2008 when a vote to approve the Troubled Assets Relief Program failed in the House. The stock market dropped 800 points. “TARP was a bad day,” Boehner said. It could be a worrisome memory now, with world markets predicted to rumble if Aug. 2 arrives with no deal.

Staff writers Paul Kane and Rosalind S. Helderman contributed to this report.