POLITICS AND POLICY
Behind Debt Deal: Silence, Distrust and Hardball
Both parties focused mostly on trying to kill any plans that emerged—both from the opposing party and their own colleagues.
Oct. 17, 2013 8:08 p.m. ET
Republican Susan Collins and a dozen other senators from both parties were busy last weekend hashing out what looked like a budget compromise, a rare glimmer of hope amid a bitter impasse that shut the government and threatened a debt default.
But top Senate Democrats hated the emerging deal, which included spending limits and changes to the health-care law, and so did the White House. After the White House chief of staff phoned lawmakers and urged them to back away, five Democrats working with Ms. Collins issued a statement saying there was no agreement. A sixth, West Virginia Sen. Joe Manchin, tracked down on his boat, signed, too. Momentum fizzled.
President Obama leaves after speaking about reopening the government. AFP/Getty Images
The budget fight that ended Wednesday night marked a new low in an increasingly dysfunctional capital. Interviews with more than a dozen lawmakers, congressional aides and administration officials about what transpired behind the scenes revealed that the traditional back-channel negotiations and 11th-hour bartering that produce most legislative deals didn't happen. Instead, both parties focused mostly on trying to kill any plans that emerged—both from the opposing party and their own colleagues.
In addition to the Collins plan, the White House also nixed an offer from House Republicans. House conservatives, for their part, rejected numerous proposals from their own leaders. Vice President Joe Biden, an architect of previous compromises, was sidelined. The deal passed Wednesday does little more than push the debate a few months ahead, when a similar standoff could ensue.
Both sides emerged more entrenched and distrustful of one another, and that bad blood could spill beyond the budget questions. Republicans, defeated in their bid to neuter the health law, are unlikely to provide assistance to President Barack Obamaas he tries to get his second term on track. Democrats have less faith in House Speaker John Boehner's ability to deliver votes from his own rank-and-file.
Communication between congressional leaders was so bad that when the Congress was ping-ponging bills to keep the government open, the staff of Senate Majority Leader Harry Reid (D., Nev.) resorted to gathering information from Twitter to brief him on the next House proposal.
Back on July 17, Mr. Boehner (R., Ohio) sat down with Mr. Reid to discuss the showdown that was coming.
They reached a tentative agreement: Mr. Boehner would pass a government-funding bill at the low spending levels set in 2011, a concession Mr. Reid was willing to accept to avoid a shutdown. Mr. Boehner told Mr. Reid that Republicans would attach some vehicle to cut funding for the health-law, on the assumption Democrats would strip it out. Mr. Reid was skeptical about the strategy, but agreed to pursue it.
But as the push to cut funding from the health law gained steam among conservatives, the rank-and-file Republicans gathered in Washington in September and rejected the latest proposal from party leaders as a gimmick.
Democrats had their own intraparty tensions. Mr. Reid was still fuming about the deal cut by Mr. Biden with Senate Minority Leader Mitch McConnell (R., Ky.) in an earlier battle over the Bush-era tax rates. In a July White House meeting, Mr. Reid and the president hashed out their differences and agreed this time there would be no talks on the debt limit.
On Sept. 12, Messrs. Reid and McConnell gathered in Mr. Boehner's office with House Minority Leader Nancy Pelosi (D., Calif.). The speaker told them that any government-funding bill would have to include changes to the health law.
The stalemate poisoned an already rocky relationship between Messrs. Boehner and Reid. Mr. Reid felt betrayed by the speaker for not delivering on the loose deal hashed out in July. As the showdown continued, Mr. Reid openly taunted Mr. Boehner in the press and even on the Senate floor.
The Sunday before the government shut down, Mr. Obama reached out by phone to former President Bill Clinton. They talked about Mr. Clinton's experience with the 1990s shutdowns.
The first serious conversations didn't begin until the second week of the shutdown, when centrist senators from both parties—led by Ms. Collins, a Republican from Maine—started to hash out a plan that might reopen the government and extend the country's borrowing authority, while giving Republicans a face-saving exit.
On Oct. 10, 10 days into the shutdown, House Republicans trekked to the White House. It wasn't supposed to be a formal negotiating session—the president was still insisting there would be no talks until the government reopened and the debt ceiling was raised—but the GOP sought to turn it into one.
Gathered in the Roosevelt Room, Mr. Boehner opened the meeting by telling the president that Republicans were willing to meet him halfway. House Majority Leader Eric Cantor (R., Va.) told the president they were willing to reopen the government early the next week in exchange for broader budget talks.
Mr. Obama said he considered the idea reasonable, but pressed the Republicans on why the government needed to be shut down.
Republicans challenged the president. Rep. Cathy McMorris Rodgers (R., Wash.) asked Mr. Obama to stop using harsh rhetoric, saying, "Why do you keep using language like 'gun to the head'?"
Mr. Biden told the Republican delegation he had been "sidelined," said House Majority Whip Kevin McCarthy (R., Calif.). "He told us he could not negotiate at the direction of the president."
About 45 minutes into the meeting, Republicans weren't sure that the president believed they were making a serious offer. House Budget Chairman Paul Ryan (R., Wis.), the 2012 Republican candidate for vice president, told Mr. Obama if he failed to seize this moment, the president would have a hard time achieving the remaining goals of his second term. "You're going to miss your moment," Mr. Ryan said.
That night, Boehner and Cantor aides met senior Obama aides to outline what they hoped to discuss in a broader budget negotiation, including means-testing for Medicare and changes in retirement benefits for federal employees. They left with an agreement to talk in the morning. The White House never called.
Last Friday afternoon, before financial markets closed, Mr. Obama called Mr. Boehner and told him, "Harry and Nancy will need revenues," according to a person familiar with the calls, meaning Mr. Reid and Mrs. Pelosi would expect Republicans to offer tax revenue as part of any budget talks.
The president also insisted on a long-term debt-limit increase and refused to link that extension to broader budget negotiations. The two sides agreed to keep talking.
On Saturday, Mr. Boehner told his fellow Republicans the White House was no longer negotiating.
That same day, the discussion returned to the Senate. One of the first moves by Mr. Reid and the White House was to kill the Collins plan. Among other elements, they weren't happy with a provision that would delay a medical-devices tax. Mr. Reid also didn't want to lock in the 2011 spending caps.
Messrs. Reid and McConnell picked up the mantle, much as they did in many past legislative fights. The two traded offers over the course of the next day and came to a tentative agreement Monday night.
Mr. Boehner didn't want to get jammed by any Senate deal. On Tuesday, he sought to put the McConnell/Reid plan on hold while his chamber passed one more bill of its own.
"We're running out of time," Mr. Boehner told a caucus meeting of House Republicans. In the same meeting, Mr. Ryan asked colleagues to show unity. "Your 'no' vote has consequences," he said.
Republicans, rejecting the advice of their leaders, fought about the strategy and the substance of the effort, and GOP leaders were forced to scuttle the bill.
An hour or so after the House effort collapsed, Mr. McConnell called Mr. Reid to restart negotiations. The Republican leader added a few demands to where the two parties ended talks on Monday night. Mr. Reid rejected them.
Mr. McConnell called back about 15 minutes later and agreed to start where the pair left off the night before.
The next day, with the deal largely finished, Mr. Reid wandered to the floor to wait for Mr. McConnell, who was briefing his caucus on the final result. When the Republican leader made it out of his meeting, the two men sealed the deal with a handshake on the Senate floor.
—Peter Nicholas contributed to this article.
Write to Janet Hook at janet.hook@wsj.com and Carol E. Lee at carol.lee@wsj.com
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