Days of Fire: Bush and Cheney in the White House

by Peter Baker

  Unlike the timetables Democrats wanted to impose in 2007, this withdrawal schedule came after conditions on the ground had improved. Just 14 American troops were killed in October, down from 126 in May 2007. Odierno told Bush that troops could come home with honor. Bush and Maliki finalized the agreement on November 17. Bush hoped it would make it easier for Obama to finish the war in Iraq without feeling pressured to withdraw abruptly. At the same time, he had effectively set Iraq policy for the first three-quarters of his successor’s term.

  On the same day, Bush found himself making one of the most unexpected telephone calls of his presidency. When he arrived in Washington in 2001, he never imagined he would exchange pleasantries with Colonel Muammar el-Qaddafi, the Libyan dictator once dubbed by Ronald Reagan “the mad dog of the Middle East.” But Qaddafi, in keeping with the rapprochement with the West, had provided $1.5 billion to victims of past Libyan terrorism, including the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland. The phone call was organized to mark the moment and to try to keep momentum. Just two months earlier, Rice had visited Qaddafi in Libya, where he presented her with a creepy video showing pictures of her with other world leaders set to the tune of a song he had a musician write for her, “Black Flower in the White House.” At least Bush would not have to worry about anything like that.

  “Colonel Qaddafi?” Bush said on picking up the phone. “George Bush here.”

  “I’m happy by this telephone call,” Qaddafi answered.

  “I’m calling to confirm the fact the agreement has been concluded,” Bush said, “and now we have a chance to get our relations on a much better basis.”

  The president called it the “basis of a new beginning” and noted that Qaddafi’s son Seif would be welcomed by the administration in Washington the next day. “Good to hear your voice.”

  Qaddafi said he too was “happy to hear your voice” and called it a “historic moment” between the two countries.

  “We still need you in the international affairs of the world,” the Libyan added. “Even though you are stepping down, the world needs you.” He said he hoped to meet in the future.

  Bush responded that he was looking forward to retirement in Texas. “Kind to take my phone call,” he added. “Perhaps our paths will cross someday. In the meantime, I ask for God’s blessings on you and your people.”

  WITH THE HOLIDAYS approaching, Bush hosted the annual Kennedy Center honors at the White House on December 7. Among the honorees was the actor Morgan Freeman. Wearing a tuxedo and standing in front of a massive Christmas tree, Bush cited the actor’s many credits, including Deep Impact, in which Freeman played a president confronted by a civilization-ending comet strike against the earth.

  Bush looked up from his notes with a sardonic look on his face. “About the only thing that hasn’t happened in the last eight years,” he ad-libbed, to laughter and applause.

  When he took his seat again, Rice leaned over. “Don’t tempt fate,” she said. “We’ve still got a few weeks left.”

  Indeed, while not a killer comet, Bush did face one final crisis in his last weeks as the auto industry teetered on the edge of bankruptcy. The chief executives of General Motors and Chrysler asked Washington for $25 billion in federal loans, then just seventeen days later increased the request to $34 billion.

  Bush pushed his staff to negotiate a temporary solution with congressional Democrats, advancing an idea from Joel Kaplan to appoint a financial viability adviser, or car czar, who would have the power to ensure that the auto companies restructured in exchange for federal loans. The White House reached agreement with Nancy Pelosi on a bill that would provide $14 billion from an existing fund dedicated to promoting advanced technology vehicles and give the firms until March to produce plans to turn themselves around. Cheney opposed the plan. Unlike the bank bailout, which he saw as needed to save the economy as a whole, the auto bailout was rewarding private firms that made bad choices.

  But having made his case and lost, Cheney agreed to defend the move on Capitol Hill. “If he told me he made a decision, there were very few times where I would say, ‘Well, I think that is a really dumb idea, Mr. President,’ ” he recalled years later. “That is not the way I worked. There was a time to argue and a time to say, ‘Yes, sir.’ Once he decided it, then he would go to work and away we go.” The loyal soldier appeared at the weekly lunch of Republican senators on December 10, only to be slapped down. Senator Bob Corker, a Tennessee Republican, called the auto plan far too weak. “There is no way in heck that I would support this,” he declared. If the automakers wanted their help, he said, they would have to take drastic action like cutting debt, restructuring health care, and trimming wages. Other Republicans said they would oppose any bailout on principle. By the time the Bush-Pelosi bill passed the House that night 237 to 170, it was irrelevant because Corker had taken over the issue in the Senate.

  Bush welcomed Paulson into his private dining room off the Oval Office for lunch the next day. Kaplan joined them. As Bush ate small carrots, a chopped apple, and a hot dog, he listened to Paulson make the case that the automakers had not prepared for an orderly bankruptcy. While they had been bleeding slowly for years, the financial crisis had propelled them toward the cliff faster than anyone had anticipated. When Corker’s Senate negotiations fell apart that night, the president decided to step in. The next morning, December 12, as he flew back to Texas to give the commencement address at Texas A&M University, Bush issued a statement through his press secretary expressing disappointment that Congress had failed to pass an auto rescue package and vowing to “consider other options if necessary—including the use of the TARP program—to prevent a collapse of troubled automakers.”

  AFTER THE COMMENCEMENT address, Bush headed to the ranch, providing another opportunity to slip away unnoticed for one last secret trip to Iraq. He landed in Baghdad on December 14 for his fourth visit, having flown around the world to cap his long effort to redeem the ill-fated war he had started. By most measures, it was a different Iraq from the one that had descended into the abyss in 2006. Violence was down, political institutions were developing, and Bush could arrive in the light of day instead of in pitch darkness. Most important, Bush would sign the strategic framework agreement that would lay out the plan for finally ending the war.

  The arrival ceremony at the palace, complete with red carpet, marching band, and matching Iraqi and American flags, stirred Bush. Maybe something good would still come out of all this. Bush greeted Nouri al-Maliki like a long-lost brother. The doubts of two years earlier, when Stephen Hadley had written his memo questioning Maliki’s fortitude, had disappeared. Bush beamed as Maliki kissed his cheeks.

  “I remember what it was like in 2006, and it was bad,” Bush recalled. “Now it’s better. And you did it.”

  “We did it together,” Maliki said.

  Bush alluded to the American doubts about Maliki. “You know, they used to ask me, ‘Where’s the Iraqi Karzai?’ ” Bush said. “Karzai’s got a pretty face, speaks English. Now they ask me, ‘Where’s the Afghan Maliki?’ Afghanistan needs a Maliki.”

  It was a bit of flattery, of course, if somewhat awkward, but it also reinforced a defining truth for Bush as he was closing out his term. He had finally turned around Iraq, only to watch Afghanistan unravel in these final months. Sitting on his desk back at the White House was a request for more troops in Afghanistan, a request he would leave to his successor.

  But this was not a moment for regrets after years of crises and challenges. Bush finally had something to celebrate.

  “Look, I only got a few weeks left,” Bush told Maliki. “You’ll still be here, but I’ll be down in Texas, rockin’ on the porch. Never got you to Texas, right?”

  “No,” Maliki said. “I was quite busy here.”

  “It’s like Iraq,” Bush said. “We got desert, oil, tough folks, lots of guns.”

  “No place is like Iraq,” Maliki said. “There’s no place like Iraq, believe me.”r />
  Maliki held Bush’s hand as he led him into a reception room to sign the agreement. A large table with a velvet cloth sat waiting for them with two leather binders holding reciprocal copies of the agreement and a couple of fancy pens. Next to the table were twin wooden lecterns in front of a bank of alternating American and Iraq flags. The room was packed with Iraqi and American journalists.

  Suddenly, as they stood at the lecterns, someone was screaming, and something came hurtling at the president. Brett McGurk, the presidential adviser who had negotiated the agreement, thought it was a suicide bomber and assumed they were all about to die. Bush instinctively ducked to his left and the object sailed over him. He realized it was a shoe, thrown by one of the Iraqi journalists in the audience.

  “This is the farewell kiss, you dog!” shouted the journalist, who then threw his other shoe. “This is from the widows, the orphans and those who were killed in Iraq!”

  This time, Maliki reached out to try to block it, and Bush needed only to turn to the side a bit to dodge the shoe. For Bush, it seemed to happen in slow motion.

  The room erupted in chaos as Iraqi security men pounced on the thrower. Don White, the president’s lead Secret Service agent, leaped toward him, but Bush waved him off, unwilling to make the incident worse than it already was.

  “I’m okay,” Bush told the agent.

  But his press secretary was not. As White rushed to Bush’s side, he knocked into a boom microphone, which struck Dana Perino squarely in the eye. She was escorted out of the room, both hands clutching her head.

  For Arabs, showing someone the bottom of a shoe is one of the most profound displays of disrespect, and throwing it at someone much worse. On the day Baghdad was liberated in 2003, Iraqis had slapped the fallen statue of Saddam Hussein with their shoes. Now Bush was the one targeted. Maliki “was white as a sheet,” noticed Eric Draper, the White House photographer. But Bush tried to make light of it, smiling and motioning his hands down to calm the other Iraqi journalists, who were apologizing profusely.

  “Don’t worry about it, don’t worry about it,” Bush kept saying.

  He made a joke. “If you want the facts, it’s a size 10 shoe that he threw,” Bush said.

  The two leaders then signed the documents and proceeded upstairs for a celebratory banquet. Bush aides could hear the shoe thrower screaming as he was pummeled in another room. “Maliki’s guards start beating the hell out of this guy,” Douglas Lute recalled. “You can hear them laying in the blows.” Secret Service agents intervened to spare the man, but to Lute it was a depressing metaphor. “You could capture the whole experience of America and Iraq. You have all the best intentions, so much hard work over the past five years, and it really comes down to the fact that the Iraqis are going to be Iraqis and they’ll continue to whale on one another.”

  Bush tried to avoid letting the episode mar a day of triumph. Maliki was angry and embarrassed, pounding his right fist into his left hand and fuming as Bush and Ryan Crocker, the ambassador, reassured him. “He was almost inconsolable,” Lute recalled.

  “Hey, please, don’t worry about it,” Bush told Maliki. “You’re making history. That guy’s just a momentary thing.”

  Maliki apologized repeatedly. “Mr. President, you’re my guest. This is my home. Please forgive the act of this man. He does not represent Iraq.”

  Bush brushed it off again and insisted they eat, whereupon Maliki gave a toast that focused on the shoe thrower. “That man, he represents the past,” Maliki declared. “He represents everyone who has lost.”

  By the time Bush got back on Air Force One to head to Afghanistan, he was insisting to everyone that it was no big deal. But aides could tell he was down. The pride and bounce from earlier in the day were gone. After several hours in Kabul, he boarded the plane for the long flight home, wrapping up his final overseas trip as president. As was tradition, he and his staff watched a slide show of pictures taken by Eric Draper on the trip. Draper had captured a series of shots of the shoe whooshing toward the lectern as Bush ducked.

  “Good reflexes,” Joshua Bolten called out, trying to keep the mood light. Bush did not laugh. “All right,” he said flatly. “Next slide.”

  WHILE AIR FORCE ONE made its way back from Afghanistan, Bush’s economic advisers finished a memo outlining four options for the auto industry. The first would provide loans from the TARP fund in exchange for the appointment of a car czar who would require financial viability plans by March. The second would provide loans with the conditions Bob Corker had tried to attach in the Senate requiring the automakers to reduce debt, rewrite work rules, and trim wages. The third would force the companies into immediate bankruptcy and use TARP funds to finance a reorganization. And the fourth would be to do nothing and leave the firms to their fates.

  Bush sat down in the Oval Office for nearly an hour and a half to discuss the alternatives. Cheney opposed a bailout and grilled the economic advisers. While the collapse of the auto industry would be damaging, potentially costing 1.1 million jobs, Cheney did not think it would be equivalent to the unraveling of Wall Street and so it did not merit taxpayer intervention. Keith Hennessey, the president’s chief economics adviser, agreed. But others, including Ed Lazear, chairman of the Council of Economic Advisers, and Carlos Gutierrez, the commerce secretary, argued they could not let the firms go into Chapter 11 bankruptcy because there was no private financing available to help them restructure. Without federal funds, the result would instead be Chapter 7 liquidation. Henry Paulson and Joel Kaplan favored the second option, giving the companies loans but forcing them to meet the tough Corker conditions. The failure of the automakers, they argued, would cascade through networks of suppliers and dealers at a moment when the economy could ill afford it.

  Bush said he would think about it. Paulson urged him to think fast and within a day began pestering Kaplan to find out if the president had made up his mind.

  “Look, Hank, you have to give the president time on this decision,” Kaplan said. “This is a difficult decision.”

  “It’s not a difficult decision,” Paulson replied. “It is an unpleasant decision, but it is not difficult.” And, he added, “It is not going to get less unpleasant with more time.”

  “I hear you, Hank,” Kaplan said. “But another twenty-four hours for the president to make a decision like this is not unreasonable.”

  The issue vexed Bush more than TARP for the reasons Cheney had outlined. As a former businessman, Bush believed a company that did not give consumers what they wanted, entered into bad contracts, and made other flawed decisions deserved to fail. That was how the market separated the strong from the weak. Yet with time running out, the argument that resonated most with Bush was not leaving a mess for his successor. Barack Obama had the right to make this call but should not have to make it in the first hours after taking the oath before even figuring out how the phones worked.

  Bush, who normally kept his decision making private, wrestled with the issue out loud on the morning of December 18. Appearing before the American Enterprise Institute, he laid out the conflicting pressures on him. “This is a difficult time for a free-market person,” he told the institute’s president, Chris DeMuth, who interviewed him onstage. “Under ordinary circumstances, failed entities, failing entities, should be allowed to fail. I have concluded these are not ordinary circumstances, for a lot of reasons.” He went on to defend his decision on TARP, explaining that the failure of a major financial institution would have “a ripple effect throughout the world” and hurt average people. Recalling Ben Bernanke’s warning, Bush said, “I analyzed that and decided I didn’t want to be the president during a depression greater than the Great Depression, or the beginning of a depression greater than the Great Depression. So we moved, and moved hard.”

  As for the auto industry, Bush said the firms “are very fragile” and that he “worried about a disorderly bankruptcy and what it would do to the psychology” of the markets. He did not want to be “putt
ing good money after bad” in untenable enterprises, but he was spending his days imagining what it would be like for Obama taking over the country at such a perilous moment with none of the experience Bush had accumulated the hard way over eight years. “I’ve thought about what it would be like for me to become president during this period,” he mused. “I believe that good policy is not to dump him a major catastrophe in his first day of office.”

  He made his mind up later that day. Rejecting Cheney’s advice, Bush decided he would provide enough money through TARP to get the companies through March. But in a hybrid of the first two options, he insisted they produce plans by then to return to financial viability or risk having the loans called and being forced into bankruptcy. At Keith Hennessey’s suggestion, Bush decided against dictating specifically how they fix their problems, recoiling at government getting into the details of how businesses should be run. Instead, he would make the Corker conditions nonbinding as a road map to how the firms should repair themselves; if they wanted to deviate from the Corker ideas, they would have to demonstrate they could achieve the same results. Finally, rather than appoint a car czar, he would have the Treasury secretary oversee the situation. He called Paulson to tell him his decision. It was inelegant, perhaps, and contrary to his own principles. Had it been six months earlier, the decision might have been different.

  At 9:00 a.m. the next day, December 19, Bush marched into the Roosevelt Room to announce the decision. The $17.4 billion in loans would become the largest industrial bailout of its kind in American history. “In the midst of a financial crisis and a recession,” Bush explained, “allowing the U.S. auto industry to collapse is not a responsible course of action.”