Obama Revealed: Bob Woodward's Explosive New Book

EXCLUSIVE: Inside the Oval Office as Obama faced perhaps the biggest test of his presidency.
3:00 | 09/10/12

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Transcript for Obama Revealed: Bob Woodward's Explosive New Book
Tonight, you'll get a glimpse behind the closed doors of power and into the dysfunctional relationships that can make or break this nation. Bob woodward is best known for uncovering watergate but his new book takes us into the obama white house where last year's clash with repcan leadership brought america to the brink of financial armageddon. Tonight you'll hear tapes from the president and speaker of the house and what happened in the heat of those crucial moments could provide large-lor ammunition. Diane sawyas the exclusive first look. Reporter: It is the kind of moment that tests a president, the nation on the edge of a financial cliff. Really say in the book nobody was in charge? In washington. And is that a failure of leadership? Some people are going to say he was fighting a brick wall. Others will say, it's the prent's job to figure out how to tear down that brick wall. Reporter: For 44 days last summer barack obama was hostage to events outside his control. The republican congress newly dominated by the tea party threatened for the first time in history to have america default on its debt. Journalist bob woodward takes an inside look at the debt ceiling crisis. His book "the price of politics," you talk about it as financial equivalent of the cuban ile crisis. It's so serious they couldn't tell the world how bad it was at the time. Reporter: The president and speaker of the house john boehner, the chain-smoking son of an ohio barkeep who is skilled in the art of backroom negotiation, still boehner has to deal with his new tea party caucus. Some of whom seem to want to see the u.S. Default. At one point of the meeting i look at myself, I look at the president and I just started chuckling to myself. Reporter: Here you're listening to speaker boehner when he talks to woodward about one of his early meetings with the president. Because all you need to know about the ifrps dids between the president and myself is that I'm sitting here smoking a cigarette drinking merlot and I look across the table and here's the president of the united states drinking iced tea and chomping on nicorette. Did you offer him a cigarette? Oh, I did not. I did not. Nor did he ask for one. Reporter: President obama spoke to woodward in the oval office. By that time I quit smoking, but, you know, I was making sure he had an ashtray, you know, you know he'd be having a sip of wine and we could have a good conversation and I permanently think he genuinely wanted to get something done, so I'm feeling fairly optimistic. Reporter: Woodward calls it the merlot and nicorette meetings and initially the two sides inched toward each other anplace they'd never gone before entitlement cuts plus tax increases, but then a single phone call will sink it all. The president says he simply called with the possibility of getting even more taxes. Even now the two men disagree on what they heard each other say. I want to be very emphatic here. At no point did I say, john, take it or leave it what I said to him was, you have to tell me how many votes do you plan to put on this thing? His position is he was not saying I have to have it, he was saying, I want you to consider it. No, no, no. No, no, no, hold on, no, no, no. No. I need 400 billion more revenue. I need. Then I pushed back a couple of times and he said, no, no, i need $400 billion. You need to think about this. Reporter: Boehner is livid and worried about the fraction rebels in the tea party. He refuses to return the president's 3 phone calls over 19 hours. This time boehner says the president erupts. He was spewing coals. Oh, he was pissed. He was pissed. He called and wanted $400 billion. I knew that he wasn't going to get a damn dime more out of me. Reporter: The stakes couldn't be higher, 11 days before default in front of the world. Somebody said can we sell national parks and the treasury secretary says, it won't work. We won't get enough money. Reporter: For his part, the president was now certain that some hard-core members of the tea party had decided to let the whole thing blow up rather than give him a deal. There were very prominent republicans in the caucus who told me to my face that the view in the caucus was that getting a deal with me would ensure my re-election. Reporter: But a lot of insiders tell woodward the president strengthened his opposition by being so aloof. Do you really think still in this tensely polarized world that schmoozing and charming and calling and spending the night with your feet up changes the course of history? Yes, ma'am. Human relations matter. Reporter: And indeed as the deadline inches closer it will be two old veterans of washington who salvage the situation. Vice president biden and minority leader republican mitch McCONNELL AND WITH JUST HOURS TO Go, a deal is finally struck but one that basically puts the country through it all again in january. But is that the president's fault? My conclusion is presidents clinton, president reagan and if you look at them, and criticize them for lots of things, they by and large work there well. Reporter: And he did not? On this, president obama did not. Reporter: But here in an election year there are going to be people who say you deliver some ammunition to his opposition. I am not delivering ammunition. I am trying to describe what happened. I also make the point that speaker boehner was responsible. Governor romney has said the president was in over his head. Is your bookmaking a case that that was true? No. He had partner -- dancer partn partner. He has the republicans in on this. I close the book with the thought that the result of all of this was the status quo, only worse.

This transcript has been automatically generated and may not be 100% accurate.

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