Sept. 10, 2012 -- intro: Bob Woodward's new book, "The Price of Politics," addresses the condition of the American economy and how and why we got there. His book examines the struggle between President Obama and the United States Congress to manage federal spending and tax policy for the three and a half years between 2009 and the summer of 2012. Based on 18 months of reporting, it features interviews with key White House and congressional officials, some of whom provided documents, meeting notes, working papers, diaries, emails, transcripts and chronologies. Three key figures spoke to Woodward on the record: President Barack Obama, House Speaker John Boehner and Senator Minority Leader Mitch McConnell. Woodward claims Democrats and Republicans cooperated "in about equal amounts."
quicklist: 1 title: Rep. John A. Boehner, Speaker of the United States House of Representatives text: President Obama and House Speaker John Boehner engaged in secret meetings at the White House in an attempt to reach a historic spending and debt deal, which ultimately collapsed. In a preliminary meeting, Boehner recalled, "I look at myself, I look at the President, and I just started chuckling to myself. Because all you need to know about the differences between the president and myself is that I'm sitting there smoking a cigarette, drinking Merlot, and I look across the table and here is the president of the United States drinking iced tea and chomping on Nicorette."
"That's exactly right. And that's true," confirmed President Obama chewing on another Nicorette during an interview with Woodward in the Oval Office.
In another private meeting, the president and Boehner joked about the tension between Boehner and Republican Majority Leader Eric Cantor, who was perceived to be working against the deal. According to Woodward, the president told Boehner, "You know Cantor's trying to get your job … He's trying to screw you. He's stirring up stuff inside your caucus … He wanted you to take the blame if this thing falls apart."
Woodward writes that President Obama had "some sympathy" for Boehner who had to deal with the Tea Partiers. The president told Woodward, "You see how crazy these people are. I understand him … He just can't control the forces in his caucus now."
quicklist: 2 title: Rep. Paul Ryan (R-Wisc.), Chairman of the House Budget Committee text: When Congressman Paul Ryan became the new Budget Committee chairman, he was determined to challenge President Obama on basic federal budget issues, especially spending on Medicare and Medicaid. President Obama initially called Ryan's Medicare plan "a serious proposal … the major driver of our long term liabilities, everybody here knows, is Medicare and Medicaid and our health care spending … Nothing comes close. That's going to be what our children have to worry about." However, the president ultimately viewed Ryan's plan as a "model of excess," according to Woodward.
On April 13 the president gave a speech at George Washington University not knowing Ryan was in the audience. He attacked, according to Woodward, "not only Ryan's plan but his entire vision," leaving Ryan "genuinely ripped." Woodward writes, "Ryan felt betrayed. He'd expected an olive branch. What he got was the finger." President Obama later admitted to Woodward that had he known Ryan was there, he might have modified his speech: "I do think that they felt like we were trying to embarrass him … We made a mistake."
quicklist: 3 title: Rep. Eric Cantor, Republican Majority Leader for the 112th Congress text: Speaker of the House John Boehner insisted that Cantor be part of Vice President Biden's bi-partisan economic group to try and reach a spending and debt deal. Cantor spent five weeks in the Biden talks until he found out – from Biden – that Boehner was negotiating secretly with President Obama. Woodward writes that Cantor was "stunned."
"I get more information out of Joe Biden than I do my speaker," Cantor said.
Boehner had always been dismissive of the Biden group's efforts. "I'm sorry I'm making you go sit in a room for three hours and wasting your time," he told Cantor once, according to Woodward. Cantor, who had kept Boehner apprised daily, felt "he had been lied to" by his own speaker. According to Woodward, the "internal House Republican dynamic, as viewed by their staffs and by the House press corps, was Cantor vs. Boehner … Cantor referred to it as 'the soap opera,' but it was real."
quicklist: 4 title: Vice President of the United States Joe Biden
text: Vice President Joe Biden was labeled the "McConnell whisperer" by White House aides for his ability to cut deals with the often implacable Senate Minority Leader, Mitch McConnell. The vice president led a parallel set of bipartisan talks that reached breakthroughs without the president's direct involvement.
Biden also established a good working relationship with Eric Cantor, who was part of the Biden group. According to Woodward, Biden told Cantor privately, "You know, if I were doing this, I'd do it totally different." To which Cantor replied, "Well, if I were running the Republican conference, I'd do it totally different." Woodward concludes they agreed that if they were in charge, they could come to a deal.
quicklist: 5 title: Rahm Emanuel, Then the White House Chief of Staff to President Barack Obama (now Mayor of Chicago)
text: On Feb. 13, both the House and Senate passed the final $787 billion stimulus bill. All 177 House Republicans votes against it. Woodward describes Emanuel as "upbeat," in contrast with the president who was "surprised that no Republicans voted for the measure (since) Emanuel had voiced utter confidence that they would get a substantial number." His administration's early decision to forego bipartisanship for the sake of speed around the stimulus bill was encapsulated by Emanuel, who is quoted in the book as saying, "We have the votes. F--- 'em."
Emanuel, according to Woodward, was also in regular contact with Sam Palmisano, the CEO of IBM. In one of their phone conversations, Palmisano objected to one administrative health care proposal, saying it would cost IBM about $700 million over 10 years and result in firing some 20,000 employees out of his workforce of 426,000. "What the f---!" Emanuel shouted. Emanuel continued to object, according to Woodward, claiming that jobs were "a sensitive subject" and dropping "F-bombs over the phone." When Palmisano replied, "It's just math … Don't get yourself crazy. Economics is not politics." The phone call then ended abruptly with speculation that Emanuel had hung up on him.
quicklist: 6 title: Lawrence (Larry) Summers, Director of the White House U.S. National Economic Council (until Nov. 2010) text: When the presidential budget request was due February 2010, Larry Summers said, "Let's sort of just gimmick it up," to then Obama's budget director Peter Orszag, according to Woodward. These "gimmicks" including imposing a three year freeze on the budgets of departments like Transportation, Agriculture and Labor with a savings of $20 billion a year as well as reducing the allowance disaster costs to $5 billion a year even though in 2005 Katrina cost the government $108 billion. "He's come to the view," Orszag later remarked to others, "that this whole exercise is kind of silly anyway, so sure, let's play the game," he's quoted in the book as saying.
Greg Brown, the president and CEO of Motorola Solutions, met with the president on Oct. 12, 2010. According to Woodward, Brown complained about Summers describing him as "brilliant and ... probably an economic savant. But he's a pain in the ass to deal with. He's an obstacle. And nothing ever comes out the other end." The president assured Brown that Summers was leaving.
quicklist:7 title: Rep. Nancy Pelosi, Democratic Leader of the 112th Congress text: As "the final version of the stimulus package was being hammered out, and negations were getting intense," Harry Reid and Nancy Pelosi call Rahm Emanuel and Peter Orzag to Pelosi's office. Reid and Pelosi are in "deal-making mode," Woodward writes, strategizing as to how to avoid a Republican filibuster in the Senate and retain Democratic support in the House. At this moment, President Obama calls Pelosi, and begins to deliver a "high-minded," "uplifting" speech on how "they were going to save the economy with this bill." Pelosi puts the president on speaker for all to hear and— wanting to get back to business—puts the president on "mute." They could hear him, but the president could not hear them. Woodward writes, "The president continued speaking, his disembodied voice filling the room, and the two leaders got back to the hard numbers."
quicklist:8 title: Sen. Harry Reid, Democratic Majority Leader in the U.S. Senate text: When Vice President Biden and Republican Senate Minority Leader Mitch McConnell agreed privately to a basic two year extension of all the Bush tax cuts, Biden called key House Democrats to the White House Roosevelt Room to give them the "good news," according to Woodward. The House Democrats, per Woodward, felt "blindsided" and "erupted" in anger. Woodward describes Sen. Harry Reid as "frosty" and quotes him telling Biden, "You guys went and did this deal … You go sell it. Not my deal, not my problem … Hope you can line up the Senate Democrats behind you because I'm not going to." When the President later wanted Reid to come to the White House to discuss the deal, Woodward quotes Reid as telling the president, "I'm not coming in after the fact … No, Mr. President, you went and did this. You're going to have to live with it."
quicklist:9 title: Jack Lew, Then Director of the Office of Management and Budget (now President Obama's Chief of Staff) text: Jack Lew and President Obama's Director of Legislative Affairs Rob Nabors went to Capitol Hill on July 6 to meet with Boehner's Chief of Staff Barry Jackson and his policy aide Brett Loper in advance of another private Obama–Boehner meeting. Woodward describes how Loper handed them Boehner's counterproposal for $2 trillion deficit reduction deal, which Lew quickly read through and dismissed, describing it as "bad politics" for the Republicans. Woodward writes that Loper found Lew "obnoxious" because the budget director was doing most of the talking, "lecturing everyone not only about what Obama's policy was, but also why it was superior to the Republicans.'" He notes that Jackson also found Lew's tone "disrespectful and dismissive."
Lew, per Woodward, was trying to explain how drastic the Republican changes were with their proposed changes to Social Security, Medicare and other social programs that would "overturn decades of Democratic orthodoxy." Lew believed that the Republicans had fundamentally misread the politics of the budget debate. "You realize that all the Democrats think we've got you by the balls because of that Paul Ryan budget you voted for? And we're going to give it up in one fell swoop?" the book quotes Lew as saying.
President Obama was being subjected to the long, torturous ways of budget negotiations and Washington deal making. "We have to acknowledge we're governing," the book quotes the president telling his inner circle. "It's like King Solomon. We just have to accept we're the mom who's not willing to split the baby in half. And we're not going to have as much leverage." To Lew, the president's analogy was crucial to understanding Obama's position in the debt limit battle, i.e. "He couldn't pretend that default was an option," per Woodward.
quicklist:10 title: Valerie Jarrett, President Obama's Senior Advisor text: The White House invited Ivan Seidenberg, the CEO of Verizon and the longest-serving CEO of a Fortune 500 company, and two other CEOs to the president's Super Bowl party on Sunday Feb. 7, 2010. Seidenberg, Woodward writes, felt "courted" until he only spoke with the president for 15 seconds before the game. He then felt he had simply been used as "window dressing." When Seidenberg complained to Valerie Jarrett, her response, according to the book was, "Hey, you're in the room with him. You should be happy." Seidenberg was not.
On May 4, 2010 President Obama addressed the Business Council, another CEO group, who then sent the White House a 47 page report called "Policy Burdens Inhibiting Economic Growth" that listed hundred of complaints against regulations, taxes, the new health care reform law, the federal deficit and massive debt.
Woodward writes that nine days later, Seidenberg had a two hour meeting with Jarrett in the West Wing to receive the administration's response to the report. Jarrett, according to Woodward, was furious: "This is total bullshit, she said, carpet-bombing the White House … This was unfair, done without warning, not in the spirit of collaboration." Seidenberg was astonished at the reaction since Obama's budget director Peter Orszag had asked them to submit a detailed report.
Woodward describes how in yet another incident Jarrett contacted other members of the Business Roundtable to say that Seidenberg had insulted the president of the United States. Ultimately, Boehner heard this and called Seidenberg. "I'd like you to do a fundraiser for me," Boehner said, per Woodward. Seidenberg agreed and two weeks later the business community raised $1.5 million for the Republican opposition.
Woodward reveals Larry Summers' low opinion of Jarrett's role as the president's ambassador to the business community and how the president "paid a price … for keeping her in that role." "And she sure talked like she was speaking for [the president]," the book quotes Summers, "and he didn't disabuse them of that, so I think they felt patronized and offended by Valerie."
quicklist:11 title: David Krone, Chief of Staff to Senate Majority Leader Harry Reid text: On the morning of Thursday, July 7 a New York Times story headlined "President Looks to Broader Deal in Deficit Talks" revealed that Boehner and Obama were engaged in secret negotiations. The report said the speaker had shown a "new willingness" to bargain over revenues and mentioned that a figure of up to "$1 trillion or more" was in play. Woodward writes, "David Krone told (Boehner's Chief of Staff Barry) Jackson that the White House had briefed Pelosi and Reid, and it looked like the leak had come from the Senate Democrats."
quicklist:12 title: "The Price of Politics" text: Bob Woodward has authored or coauthored 16 non-fiction books in the last 36 years. His most recent book, "The Price of Politics," will be released on Sept. 11, 2012. On Sept. 10, Diane Sawyer will have the first interview with Woodward, to be aired on "World News." Woodward will sit with George Stephanopoulos on publication day for a live interview on "Good Morning America."