Sept. 05 2012 -- An explosive mix of dysfunction, miscommunication, and misunderstandings inside and outside the White House led to the collapse of a historic spending and debt deal that President Obama and House Speaker John Boehner were on the verge of reaching last summer, according to revelations in author Bob Woodward's latest book.
The book, "The Price of Politics," on sale Sept. 11, 2012, shows how close the president and the House speaker were to defying Washington odds and establishing a spending framework that included both new revenues and major changes to long-sacred entitlement programs. "The Price of Politics" examines the struggles between Obama and the Congress for the three and a half years, between 2009 and the summer of 2012. It offers exclusive behind the scenes access to what the President and the Republicans did, or rather failed to do.
But at one critical juncture, with an agreement tantalizingly close, Obama pressed Boehner for additional taxes as part of a final deal -- a miscalculation, in retrospect, given how far the House speaker felt he'd already gone.
The president called three times to speak with Boehner about his latest offer, according to Woodward. But the speaker didn't return the president's phone call for most of an agonizing day, in what Woodward calls a "monumental communications lapse" between two of the most powerful men in the country.
When Boehner finally did call back, he jettisoned the entire deal. Obama lost his famous cool, according to Woodward, with a "flash of pure fury" coming from the president; one staffer in the room said Obama gripped the phone so tightly he thought he would break it.
"He was spewing coals," Boehner told Woodward, in what is described as a borderline "presidential tirade."
"He was pissed…. He wasn't going to get a damn dime more out of me. He knew how far out on a limb I was. But he was hot. It was clear to me that coming to an agreement with him was not going to happen, and that I had to go to Plan B."
Tune in to "World News with Diane Sawyer" and "Nightline" on Monday September 10, 2012 to see Diane Sawyer's exclusive interview with Bob Woodward
Accounts of the final proposal that led to the deal's collapse continue to differ sharply. The president says he was merely raising the possibility of putting more revenue into the package, while Boehner maintains that the president needed $400 billion more, despite an earlier agreement of no more than $800 billion in total revenue, derived through tax reform.
Obama and his aides argue that the House speaker backed away from a deal because he couldn't stand the political heat inside his own party – or even, perhaps, get the votes to pass the compromise. They say he took the president's proposal for more revenue as an excuse to pull out of talks altogether.
"I was pretty angry," the president told Woodward about the breakdown in negotiations. "There's no doubt I thought it was profoundly irresponsible, at that stage, not to call me back immediately and let me know what was going on."
The failure of Obama to connect with Boehner was vaguely reminiscent of another phone call late in the evening of Election Day 2010, after it became clear that the Republicans would take control of the House, making Boehner Speaker of the House.
Nobody in the Obama orbit could even find the soon-to-be-speaker's phone number, Woodward reports. A Democratic Party aide finally secured it through a friend so the president could offer congratulations.
While questions persist about whether any grand bargain reached by the principals could have actually passed in the Tea Party-dominated Congress, Woodward issues a harsh judgment on White House and congressional leaders for failing to act boldly at a moment of crisis. Particular blame falls on the president.
"It was increasingly clear that no one was running Washington. That was trouble for everyone, but especially for Obama," Woodward writes.
For all the finger-pointing now, Obama and Boehner appear to have developed a rapport during the negotiations. The Illinois Democrat bonded with the Ohio Republican, starting with a much-publicized "golf summit" and continuing through long, substantive chats on the Truman Balcony and the patio right outside the Oval Office.
Boehner was drinking Merlot and smoking cigarettes, Obama sipping iced tea and chomping Nicorette. Obama, who had quit smoking by the time, wasn't offered a cigarette by Boehner and didn't ask for any, though he told Woodward he always made sure an ashtray was available for him. The two men were divided by ideology but united in looking for a legacy-making moment – even if it meant sacrificing their own jobs.
"I would willingly lose an election if I was able to actually resolve this in a way that was right," Obama told Woodward about his mindset at the time, comparing the debt negotiations to the decision to strike Osama bin Laden's compound.
Boehner voiced a similar desire to accomplish something big on spending: "I need this job like I need a hole in the head," he told Woodward. Yet top deputies loomed large over the negotiations. 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.
House Majority Leader Eric Cantor is depicted as more in touch with the Republican caucus that elected Boehner speaker, particularly with its strong contingent of tea party freshmen who came to Washington pledging to put the brakes on federal spending at any cost.
Cantor, Woodward writes, viewed Boehner as a "runaway horse" who needed reining in, given the realities of his own caucus. The Boehner-Obama talks started without Cantor's knowledge, and Boehner later acknowledged to the president that Cantor was working against the very deal they were trying to reach, according to Woodward.
Intriguingly, Cantor and Biden frequently had "private asides" after larger meetings, according to Woodward. After one of them, Woodward writes that Biden told Cantor: "You know, if I were doing this, I'd do it totally different."
"Well, if I were running the Republican conference, I'd do it totally different," Cantor replied, according to Woodward.
Woodward writes: "They agreed that if they were in charge, they could come to a deal."
With the president taking charge, though, Obama found that he had little history with members of Congress to draw on. His administration's early decision to forego bipartisanship for the sake of speed around the stimulus bill was encapsulated by his then-chief of staff, Rahm Emanuel: "We have the votes. F--- 'em," he's quoted in the book as saying.
Obama's relationship with Democrats wasn't always much better. Woodward recounts an episode early in his presidency when then-House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid were hammering out final details of the stimulus bill.
Obama phoned in to deliver a "high-minded message," he writes. Obama went on so long that Pelosi "reached over and pressed the mute button on her phone," so they could continue to work without the president hearing that they weren't paying attention.
As debt negotiations progressed, Democrats complained of being out of the loop, not knowing where the White House stood on major points. Rep. Chris Van Hollen, D-Md., the ranking Democrat on the House Budget Committee, is described as having a "growing feeling of incredulity" as negotiations meandered.
"The administration didn't seem to have a strategy. It was unbelievable. There didn't seem to be any core principles," Woodward writes in describing Van Hollen's thinking.
Larry Summers, a top economic adviser to Obama who also served as Treasury Secretary under President Clinton, identified a key distinction that he said impacted budget and spending talks.
"Obama doesn't really have the joy of the game. Clinton basically loved negotiating with a bunch of pols, about anything," Summers said. "Whereas, Obama, he really didn't like these guys."
Summers said that Obama's "excessive pragmatism" was a problem. "I don't think anybody has a sense of his deep feelings about things." Summers said. "I don't think anybody has a sense of his deep feelings about people. I don't think people have a sense of his deep feelings around the public philosophy."
Obama and his top aides were at times dismissive of the tea party freshmen in Congress who made the debt limit into a major fight. He told Woodward he had "some sympathy" for Boehner, since "he just can't control the forces in his caucus now."
"You see how crazy these people are. I understand him," the president said.
Boehner was equally harsh in his judgment of the flaws inside the White House.
"The president was trying to get there. But there was nobody steering the ship underneath him," Boehner told Woodward. "They never had their act together. The president, I think, was ill-served by his team. Nobody in charge, no process. I just don't know how the place works. To this day, I can't tell you how the place works. There's no process for making a decision in this White House. There's nobody in charge."
One important moment in the negotiations came when the president scheduled a major address on the nation's long-term debt crisis. A White House staffer thought to invite House Budget Committee Chairman Paul Ryan, R-Wis., along with the other two House Republicans who had served on the Simpson-Bowles debt commission.
The president delivered a blistering address, taking apart the Ryan budget plan as "changing the basic social compact in America." Ryan left the speech "genuinely ripped," Woodward writes, feeling that Obama was engaged in "game-on demagoguery" rather than trying to work with the new Republican majority.
"I can't believe you poisoned the well like that," Ryan told Obama economic adviser Gene Sperling on his way out of the speech.
The president told Woodward that he wasn't aware that Ryan was in the audience, and he called inviting him there "a mistake."
If he had known, Obama told Woodard, "I might have modified some of it so that we would leave more negotiations open, because I do think that they felt like we were trying to embarrass him… We made a mistake."
The book makes no significant mention of Republican presidential candidate Mitt Romney, who chose Ryan to be his running mate more than a year after the main events in the book transpired. The 2012 election is not a major focus of the book, beyond the president's repeated insistence that any debt deal cover spending and borrowing through his reelection year.
Woodward portrays a president who remained a supreme believer in his own powers of persuasion, even as he faltered in efforts to coax congressional leaders in both parties toward compromise. Boehner told Woodward that at one point, when Boehner voiced concern about passing the deal they were working out, the president reached out and touched his forearm.
"John, I've got great confidence in my ability to sway the American people," Boehner quotes the president as having told him.
But after the breakthrough agreement fell apart, Boehner's "Plan B" would ultimately exclude the president from most of the key negotiations. The president was "voted off the island," in Woodward's phrase, even by members of his own party, as congressional leaders patched together an eleventh hour framework to avoid default.
Frustration over the lack of clear White House planning was voiced to Obama's face at one point, with a Democratic congressional staffer taking the extraordinary step of confronting the president in the Oval Office.
With the nation facing the very real possibility of defaulting on its debt for the first time in its history, David Krone, the chief of staff to Senate Majority Leader Harry Reid, told the president directly that he couldn't simply reject the only option left to Congress.
"It is really disheartening that you, that this White House did not have a Plan B," Krone said, according to Woodward.
Congress reached a short-term deal to slice spending and extend the nation's debt ceiling through the election. But it also set up a mechanism that will lead to a "fiscal cliff" of tax hikes and deep cuts to programs, including defense spending, at the end of this year, absent new congressional action. "It is a world of the status quo, only worse," Woodward concludes.