In Debt Standoff, President Obama Couldn’t Even Trust Own Party

Perhaps one of the more astonishing things gleaned from a recent excerpt from “The Price of Politics” by journalist Bob Woodward was that in the end, President Obama couldn’t even trust his own party to be square with him.

According to the account that ran in Sunday’s Washington Post, House Speaker John Boehner, Senate Minority Leader Mitch McConnell, both Republicans, and Democratic House Minority Leader Nancy Pelosi and Senate Majority Leader Harry Reid worked out “the framework of a deal” on the 2011 debt-ceiling crisis and let the president think they were still hammering out the details of an agreement.

Rather than a collaborative effort with a president who was trying to reach a bipartisan deal that would keep the federal government from going into default, the four congressional leaders worked to ensure the legislative branch continued to have leverage over the executive.

The excerpt implies that Obama naively thought he was dealing with honest brokers and got caught without a backup plan or—it appeared at the time—any option except to go along with the agreement once it was presented.

The deal, as proposed by the legislative quartet, was a two-step $2.7 trillion debt-limit extension that would have to be revisited during the 2012 presidential campaign.  Whether Obama took the deal or rejected it, he risked being ruined politically by letting himself be bullied by the Republicans or tainted by letting the nation go in the tank fiscally.

“It was increasingly clear that no one was running Washington,” Woodward wrote. “That was trouble for everyone, but especially for Obama. Although running things is a joint venture between the president and Congress, a president has to dominate Congress—or at least be seen as dominating Congress.”

Obama, however, resisted a short-term deal even though he was quickly running out of time to get a deal done—even with his then-chief of staff William Daley and Treasury Secretary Tim Geithner urging him to take the deal and laying out a doomsday scenario.

According to Geithner, the book said, “The word could decide to dump U.S. Treasuries. Prices would plummet, interest rates would skyrocket. The one pillar of stability, the United States, the rock in the global economy, could collapse.”

Geithner, however, held back on pushing the morality card. Although he had not said it to Obama, he thought the president could not afford morally to let the economy fall apart because of the global impact, because the poor who were already struggling would be hurt the most and the damage “would last for generations.”

Before Obama had to make that decision, however, House Republicans dropped their demand for the two-step plan and put off the doomsday spending cuts that would take effect if the budget was not balanced.

As Woodward described it, Obama dodged a major bullet politically and deferred the pain until after the election.

What stood out clearly was that the president not only could not trust the Republicans, but he couldn’t trust his party’s congressional leadership and the GOP had successfully cowed the Treasury Secretary as well.

According to the account, Obama appeared prepared to ride it out and see if the Republicans were serious about letting the nation default. He was angry and disgusted by the gamesmanship, but seemed willing to keep his stake in until the very end.

Woodward’s conclusion was the Obama never had to show his hand because the Republicans, inexplicably, folded.

But maybe, just maybe, the Republican leadership blinked first.

Jackie Jones, a journalist and journalism educator, is director of the career transformation firm Jones Coaching LLC and author of “Taking Care of the Business of You: 7 Days to Getting Your Career on Track.”

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