The New New Deal Read online

  “You just got pounded. It’s the lowest of the lows,” Rogers says. “And then you look at the numbers, it’s not as bad as you thought. All those guys winning in red seats, they’re going to vote with Obama and his agenda, and I don’t think the people who sent them here really want that. Hey, here’s how we can come back.”

  Two consecutive drubbings, while shrinking the Republican conference, had also dragged it even further right. Staunch conservatives from safe districts had survived, while the herd of moderates from competitive districts had been culled, including the entire House GOP delegation from New England. The Republican Study Committee, once a marginal outpost for hard-line conservatives, now included a solid majority of the conference, including Cantor, Sessions, and Mike Pence of Indiana, a former RSC head who was now conference chairman. Boehner had an occasional history of bipartisan behavior, cutting the No Child Left Behind deal with Senator Kennedy and Congressman George Miller in 2001, but that was “in a universe far, far away,” as Miller puts it. Even if Boehner had wanted to reach out to Obama, he had to guard his right flank against Cantor, whose interest in his job was poorly concealed. So Boehner was already mocking the idea that spending could ease the recession, berating Democrats to “start listening to the American people” as if Election Day had never happened.

  Some establishment Republicans feared the party was slipping into a suicidal feedback loop, doubling down on an anti-government, anti-immigrant, anti-science, anti-gay agenda that could command excellent ratings for Rush Limbaugh, but not a national majority. As the GOP downsized to its Fox News base, it would be tempted to pursue even harder-line policies, which could lead to further losses and an even harder-line caucus, surrendering the center to Obama. After Republicans got whipped in 2006, party stalwarts like the House campaign chairman, Tom Cole, a rock-ribbed conservative from a rock-ribbed Oklahoma district, had argued for a less dogmatic message. Cole had been a political consultant before running for office—House Republicans had hoped he could be their Rahm—and he had warned that the country was center-right, not right-wing.150 But after history repeated itself in 2008, Cole lost his post to the more dogmatically conservative Sessions.

  The new leaders who gathered in Annapolis had a new mantra: Our mistake was abandoning our principles, not following our principles. They saw John McCain as a typical Republican In Name Only who had sought electoral salvation in ideological equivocation—and look what happened to him. They even revised their opinions of George W. Bush, who in retrospect seemed less a conservative hero, more a big-spending apostate. And they viewed the homogeneity of their conference as an advantage. For the outside game, it could help them reclaim their brand as the party of limited government, firing up their base, and reminding the rest of the country what they stood for. For the inside game, it would be easier to unify a purer conservative team against Obama and Pelosi. They would have fewer “problem children,” as they privately described the conference’s moderates and iconoclasts.

  This was the main theme of the retreat, the need for unity. Boehner kept channeling Ben Franklin: If we don’t hang together, we’ll hang separately. And the only principles capable of uniting Republicans were traditional Republican principles.

  “That’s when you saw the seeds of: ‘We’re going to earn back our majority,’” says Collins, the Cantor aide. “Those were the kind of words we were going to use. We had to convey to the American people and our base: Sorry, we kind of screwed up the last few years. Got it. Message received. New team. Turn the page.”

  Around that time, Chairman Obey met with the top Republican appropriator, Jerry Lewis, to explain what Democrats had in mind for the stimulus. “David says: Jerry, this is what we’re going to do—now take notes,” Lewis says. “That way he could say he consulted me.” The last time they had chatted, they had discussed a $300 billion bill. Now Obey said it would be $800 billion.

  “I said, for God’s sakes, David, you’ve shifted gears,” Lewis recalls.

  Obey remembers something else Lewis said, after Obey asked whether Republicans had anything they wanted in the stimulus. “Jerry’s response was: ‘I’m sorry, but leadership tells us we can’t play,’” Obey recalls. “Exact quote: ‘We can’t play.’ What they said right from the get-go was: It doesn’t matter what the hell you do, we ain’t gonna help you. We’re going to stand on the sidelines and bitch.”

  Lewis blames Obey for the committee’s turn toward extreme partisanship. He says the chairman short-circuited regular order, cooking up a bill with Pelosi and jamming it through the House. He says Obey never made a genuine effort to reach out, and even ordered his committee staff to stop talking to Republicans. “That’s not a negotiation,” he said on the House floor. “That’s a travesty, a mockery, a sham.”

  But Lewis doesn’t deny that GOP leaders made a decision not to play. “The leadership decided there was no play to be had,” he says. “Obey was all-controlling. He can be very obnoxious and arrogant. Our people were turned off very early.”

  Boehner also telegraphed the Republican leadership’s unwillingness to play at an odd meeting in Pelosi’s office. The minority leader and the speaker had a cordial relationship, generally limited to discussing House logistics. They rarely bothered to debate policy; the southwest Ohio conservative and the San Francisco liberal knew they inhabited different ideological planets. But this time, Pelosi tried to persuade Boehner to work with Democrats on the stimulus, making an impassioned case that spending programs had higher Keynesian multipliers than tax cuts. Boehner didn’t believe in Keynesian theories any more than he believed in global warming or the tooth fairy.

  “Boehner was like: ‘Okay, let me get this straight, we’re going to take a dollar and turn it into $1.75?’” one of his aides recalls.

  Pelosi’s staffers recall the meeting a bit differently, although the upshot was the same. “Nancy said: We need to do something on jobs. And Boehner said: Why would we want to help you on that?” a senior Pelosi aide recalls. “You saw the beginning of their strategy right there: They didn’t want their fingerprints on anything. And then if the economy didn’t turn, they’d win.”

  Democrats weren’t interested in bipartisanship out of altruism; they wanted Republican fingerprints on the Recovery Act for similarly political reasons. As Tom Cole, now a deputy whip, wrote in his diary on January 7: “Dems are worried about a unified GOP opposition—not because they will not prevail but because they want joint responsibility.” In any case, House Republican leaders had already decided not to give it to them. They wanted the Democrats solely responsible for the economy.

  “It was apparent very early that this wasn’t going to be bipartisan,” Cole told me. “We wanted the talking point: ‘The only thing bipartisan was the opposition.’”

  “We Should Stand Up”

  Senate Republicans had endured an even rougher November than their House counterparts, and they felt even gloomier as they met for their own retreat in early January at the Library of Congress. McCain, who had endured the roughest November, lectured his colleagues that Republicans could not win national elections if they kept alienating women and Hispanics. “We might find ourselves in the minority for generations,” groaned Utah senator Bob Bennett. Five of the forty-one surviving Republican senators would announce their retirements within a month.151

  “We were discouraged, dispirited, and divided. Some of us were worried whether the party would survive,” Bennett recalls. “The one guy who recognized that it need not be so was Mitch McConnell.”

  The owlish, studiously bland Senate minority leader was the unlikeliest of motivational speakers. With his droning monotone and dour demeanor, McConnell was human Ambien. He was a strategy guy, cynical and clinical, a relentless repeater of messages, a master of arcane Senate rules, an inside player best known for his dogged efforts to thwart campaign finance reform in the 1990s. He had dubbed himself the Abominable No-Man, and his office walls were still cluttered with cartoons lampooning him as a defender
of corruption.152 McConnell was a determined fighter who had overcome childhood polio, rehabbing at FDR’s Warm Springs spa, but he was nobody’s idea of an inspirational leader.

  At the retreat, McConnell reminded the Republican senators that there were still enough of them to block the Democratic agenda—as long as they all marched in lockstep. In the library’s historic Members Room, amid oak-paneled walls, Italian marble mantels, and ornate mosaics, McConnell cautioned his own members to stay calm, stay true to their principles, and stay united. Politically, they had nothing to gain from me-too-ism. As always, he stuck to his talking points:

  “We got shellacked, but don’t forget we still represent half the population.”153

  “Even though we lost, we still have an obligation to represent those ideas.”

  “It’s important to keep an eye on regaining the majority.”

  “Most importantly, Republicans need to stick together as a team.”

  McConnell had invited pollsters, too. Their data suggested the election was about Bush fatigue, Iraq fatigue, and the Wall Street debacle; they saw no evidence of a pro-Democrat or pro-government wave. Americans were still much more likely to call themselves conservatives than liberals. And after TARP, the all-important independent voters were deeply concerned about the historically Republican issues of spending and debt. Sure, the Bush era had featured a Republican orgy of spending and debt; the CBO had just tripled its deficit projection to a staggering $1.2 trillion.154 McConnell’s own vote for the bank bailout had turned an easy reelection campaign into an unpleasantly tight race. But with deficits and debt at an all-time high, and Obama preparing to expand them, McConnell saw an opportunity for a revival if Republicans could rediscover fiscal conservatism. We don’t have to change who we are, he said. We’re the party that cares about spending and debt.

  “We’re the last line of defense,” he said.

  McConnell did not advocate immediate Obama bashing, even though conservative activists were clamoring for war, and he also emphasized the importance of offering solutions, to avoid looking like a Party of No. But his message was that No was a perfectly acceptable position: “When Democrats propose something we oppose, we should stand up and express our opposition.”

  “People were pretty demoralized, and there were two totally opposite thoughts on how to approach the situation,” a McConnell aide recalls. “One was, ‘we don’t like the president, we ought to pop him early.’ The other was, ‘he’s really popular, we should work with him, because that’s what people want us to do.’ The boss’s take was: Neither.” McConnell realized that it would be much easier to fight Obama if Republicans first made a public show of wanting to work with him.

  The minority leader understood the power of partisanship as well as anyone in Washington. He knew that few Americans have the time or inclination to follow the nitty-gritty details of policy debates, so issues tend to filter down to the public as either “bipartisan,” shorthand for a reasonable consensus approach, or “controversial,” shorthand for the usual political bickering. McConnell wasn’t sure he could stop Obama’s agenda, but he was determined to keep it controversial.

  “He wanted everyone to hold the fort,” recalls former Republican senator George Voinovich of Ohio. “All he cared about was making sure Obama could never have a clean victory.”

  McConnell recognized that Obama’s promises of bipartisanship gave his dwindling minority real leverage. Whenever Republicans decided not to cooperate, Obama would be the one breaking his promises. And since Democrats controlled Washington, Obama would be held responsible for whatever happened there. As long as Republicans refused to follow his lead, Americans would see partisan food fights and conclude that Obama had failed to produce change.

  “We thought—correctly, I think—that the only way the American people would know a great debate was going on was if the measures were not bipartisan,” McConnell explained later in one of his periodic outbreaks of candor.155 “When you hang the ‘bipartisan’ tag on something, the perception is that differences have been worked out.”

  Maybe Obama had rewritten the rules of electoral politics, but the rules of Washington politics still applied. The dream of hope and change was about to enter the world of cloture votes and motions to recommit. That was McConnell’s world.

  The stimulus was exactly the kind of legislation that McConnell wanted Republicans to oppose en masse, to create a narrative of conflict while letting the Democrats own massive increases in spending and debt. The goal was to portray it as a trillion-dollar spending bill at a time of trillion-dollar deficits, rather than an economic recovery bill at a time of economic crisis. Even before the bill was unveiled, he was raising public alarms about a partisan rush to fund “mob museums.” (A Las Vegas museum devoted to organized crime was on the Conference of Mayors list of eleven thousand local stimulus requests.) After Obama upped his Recovery Act jobs estimate to three million, and pledged that at least 80 percent would be in the private sector, McConnell slyly questioned why America needed 600,000 new government jobs.156 Obama was talking about rescuing the existing jobs of teachers, cops, and other public employees, but that kind of saved-or-created nuance tended to get lost.

  McConnell knew that after TARP, Republicans wouldn’t have to attack every provision of the stimulus; they just had to convey that Congress was up to its old tricks. There was no way a bill this gigantic could slip through the sausage-making process without picking up dubious provisions; the mob museum, which was never in the bill, was just a placeholder for big-government bloat. “If the president wants to spend more money, let’s debate money,” McConnell told his members. Judd Gregg of New Hampshire, the top Republican budgeteer, suggested attacking Democrats as the party of trillion-dollar bills.

  Still, McConnell knew it would be tough to maintain a united front. The Senate is less of a top-down institution than the House, and his caucus was more ideologically diverse than Boehner’s. Gregg himself had just published an op-ed in the Wall Street Journal endorsing several of Obama’s spending proposals for the Recovery Act, including roads, bridges, mass transit, and health IT.157 “It is fairly obvious that serious deficit spending is needed immediately,” Gregg had written, directly undercutting McConnell’s message. And Gregg was one of those New England fiscal hawks inevitably described as “flinty,” because “cheap” was considered impolite; plenty of his colleagues enjoyed deficit spending far more than he did.

  “We were really worried that everyone would just say, ‘Let’s cut a deal,’ and the president would get this big bipartisan accomplishment with eighty votes,” says one McConnell aide.

  The caucus trusted McConnell. His wooden delivery and matter-of-fact approach actually enhanced his credibility as a messenger of hope. But realistically, even his staff thought Republicans would be roadkill for the foreseeable future.

  “We didn’t leave the room like in Braveheart, pounding our chests,” says Derek Kan, a young budget analyst on McConnell’s staff. “Things didn’t look good for the next two years.”

  “He’d Tell You to Go to Hell!”

  On January 5, the president-elect, just back from a Hawaii vacation, sat down with congressional leaders, just back from winter recess. They met in the Capitol’s historic LBJ Room, another opulent space with frescoed ceilings and an elaborate crystal chandelier, a lovely setting for a ceremonial exchange of bipartisan platitudes. Obama said the freefall was an American problem, not a Democratic or Republican problem. He promised a balanced stimulus package with serious tax cuts, and urged everyone to put aside partisan differences. “There are times to score political points,” he said. “This is not one of those times.”

  McConnell and Boehner dutifully agreed that these were perilous times, that something needed to be done, that tax cuts were fine things indeed. They did stress the importance of letting Republicans shape the bill, and Cantor had a strained exchange with the president-elect about posting stimulus contracts on the Internet. But the only congressional
leader who directly confronted Obama was Jim Clyburn, the House Democratic whip, who delivered a pointed lecture about the racism of the New Deal. He said he’d heard a lot lately about FDR, but he preferred Harry Truman. When he thought of the New Deal, he thought of “Whites Only” signs at CCC camps.

  “It was a raw deal for the communities I represent,” Clyburn said. “Whatever you do in this recovery package, it better be fair to those communities.”

  Welcome back to Washington, Mr. President-Elect.

  Will Rogers famously said he didn’t belong to an organized political party; he was a Democrat. Decades later, Democrats still had a habit of giving Democratic presidents a hard time. They say it’s because they’re more diverse than Republicans, more small-d democratic, less inclined to play follow-the-leader. They don’t have a Limbaugh or Fox News to galvanize message discipline among their base. “Look, we don’t always smile and agree with each other,” Clyburn says. “We’re Democrats!”

  Whatever the reason, Democratic leaders wasted no time sending the message that while they supported Obama’s agenda, they did not intend to bow down to his White House. Biden was about to become the presiding officer of his beloved Senate, but Reid announced that he was no longer welcome at Democratic caucus meetings. “I do not work for Barack Obama,” Reid told reporters.158 Pelosi owed her gavel to Rahm, but sternly warned him not to meddle in House matters or even backchannel with his former colleagues without notifying her.

  This muscle flexing extended to substance, not just process. While Republicans were preparing a united front against the Recovery Act, Democrats were already squabbling about the details.

  Chairman Obey was not one of the Democrats griping about bailouts for governors. He knew state aid was terrible politics, but it was still his top Recovery Act priority; it didn’t make sense to inject stimulus if states were just going to counteract it. So when Jason Furman and Obama’s top domestic policy advisers, Melody Barnes and Heather Higginbottom, suggested $200 billion in state fiscal relief, Obey readily agreed. When they suggested half the money should flow through Medicaid to prevent states from cutting health care for the poor, Obey agreed again. Then they suggested sending the other half through an education fund that would require governors to adopt sweeping school reforms in order to qualify for the cash.