by Obama Barack
Both Sonia and Rahul Gandhi sat at our dinner table that night. She was a striking woman in her sixties, dressed in a traditional sari, with dark, probing eyes and a quiet, regal presence. That she—a former stay-at-home mother of European descent—had emerged from her grief after her husband was killed by a Sri Lankan separatist’s suicide bomb in 1991 to become a leading national politician testified to the enduring power of the family dynasty. Rajiv was the grandson of Jawaharlal Nehru, India’s first prime minister and an icon in the independence movement. His mother, Nehru’s daughter, Indira Gandhi, had spent a total of sixteen years as prime minister herself, relying on a more ruthless brand of politics than her father had practiced, until 1984 when she, too, was assassinated.
At dinner that night, Sonia Gandhi listened more than she spoke, careful to defer to Singh when policy matters came up, and often steered the conversation toward her son. It became clear to me, though, that her power was attributable to a shrewd and forceful intelligence. As for Rahul, he seemed smart and earnest, his good looks resembling his mother’s. He offered up his thoughts on the future of progressive politics, occasionally pausing to probe me on the details of my 2008 campaign. But there was a nervous, unformed quality about him, as if he were a student who’d done the coursework and was eager to impress the teacher but deep down lacked either the aptitude or the passion to master the subject.
As it was getting late, I noticed Singh fighting off sleep, lifting his glass every so often to wake himself up with a sip of water. I signaled to Michelle that it was time to say our goodbyes. The prime minister and his wife walked us to our car. In the dim light, he looked frail, older than his seventy-eight years, and as we drove off I wondered what would happen when he left office. Would the baton be successfully passed to Rahul, fulfilling the destiny laid out by his mother and preserving the Congress Party’s dominance over the divisive nationalism touted by the BJP?
Somehow, I was doubtful. It wasn’t Singh’s fault. He had done his part, following the playbook of liberal democracies across the post–Cold War world: upholding the constitutional order; attending to the quotidian, often technical work of boosting the GDP; and expanding the social safety net. Like me, he had come to believe that this was all any of us could expect from democracy, especially in big, multiethnic, multireligious societies like India and the United States. Not revolutionary leaps or major cultural overhauls; not a fix for every social pathology or lasting answers for those in search of purpose and meaning in their lives. Just the observance of rules that allowed us to sort out or at least tolerate our differences, and government policies that raised living standards and improved education enough to temper humanity’s baser impulses.
Except now I found myself asking whether those impulses—of violence, greed, corruption, nationalism, racism, and religious intolerance, the all-too-human desire to beat back our own uncertainty and mortality and sense of insignificance by subordinating others—were too strong for any democracy to permanently contain. For they seemed to lie in wait everywhere, ready to resurface whenever growth rates stalled or demographics changed or a charismatic leader chose to ride the wave of people’s fears and resentments. And as much as I might have wished otherwise, there was no Mahatma Gandhi around to tell me what I might do to hold such impulses back.
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HISTORICALLY, CONGRESSIONAL ambitions tend to be low during the six- or seven-week stretch between Election Day and the Christmas recess, especially with a shift in party control about to happen. The dispirited losers just want to go home; the winners want to run out the clock until the new Congress gets sworn in. On January 5, 2011, we’d be seating the most Republican House of Representatives since 1947, which meant I’d be unable to get any legislation called for a vote, much less passed, without the assent of the incoming Speaker of the House, John Boehner. And if there was any question about his agenda, Boehner had already announced that the first bill he’d be calling to a vote was a total repeal of the ACA.
We did, however, have a window of opportunity during the coming lame-duck session. Having returned from my visit to Asia, I was intent on getting several key initiatives across the finish line before Congress adjourned for the holidays: ratification of the New START on nuclear nonproliferation that we’d negotiated with the Russians; repeal of “Don’t Ask, Don’t Tell,” the law that barred gays, lesbians, and bisexuals from openly serving in the military; and passage of the DREAM Act, which would establish a path to citizenship for a large swath of children of undocumented immigrants. Pete Rouse and Phil Schiliro, who between them had nearly seventy years of Capitol Hill experience, looked dubious when I ran through my lame-duck to-do list. Axe actually chortled.
“Is that it?” he asked sarcastically.
Actually, it wasn’t. I’d forgotten to mention that we needed to pass a child nutrition bill that Michelle had made a central plank in her fight against childhood obesity. “It’s good policy,” I said, “and Michelle’s team’s done a great job lining up support from children’s health advocates. Plus, if we don’t get it passed, I won’t be able to go home.”
I understood some of my staff’s skepticism about trying to move such an ambitious agenda. Even if we could muster the sixty votes needed for each of those controversial bills, it wasn’t clear that Harry Reid could get enough cooperation from Mitch McConnell to schedule so many votes in such a short time. Still, I didn’t think I was being entirely delusional. Almost every item on my list already had some legislative traction and had either cleared or seemed likely to clear the House. And while we hadn’t had much luck overcoming GOP-led Senate filibusters previously, I knew that McConnell had a big-ticket item of his own that he desperately wanted to get done: passing a law to extend the so-called Bush tax cuts, which would otherwise automatically expire at the end of the year.
This gave us leverage.
I’d long opposed my predecessor’s signature domestic legislation, laws passed in 2001 and 2003 that changed the U.S. tax code in ways that disproportionately benefited high-net-worth individuals while accelerating the trend of wealth and income inequality. Warren Buffett liked to point out that the law enabled him to pay taxes at a significantly lower rate—proportionate to his income, which came almost entirely from capital gains and dividends—than his secretary did on her salary. The laws’ changes to the estate tax alone had reduced the tax burden for the top 2 percent of America’s richest families by more than $130 billion. Not only that, but by taking roughly $1.3 trillion in projected revenue out of the U.S. Treasury, the laws had helped turn a federal budget surplus under Bill Clinton into a burgeoning deficit—a deficit that many Republicans were now using to justify their calls for cuts to Social Security, Medicare, Medicaid, and the rest of America’s social safety net.
The Bush tax cuts might have been bad policy, but they had also modestly lowered the tax bill of most Americans, which made rolling them back politically tricky. Polls consistently showed a strong majority of Americans favoring higher taxes on the rich. But even well-to-do lawyers and doctors didn’t consider themselves rich, especially if they lived in high-cost areas; and after a decade in which the bottom 90 percent of earners had seen stagnant wages, very few people thought their own taxes should go up. During the campaign, my team and I had settled on what we considered a policy sweet spot, proposing that the Bush tax cuts be repealed selectively, affecting only those families with income greater than $250,000 a year (or individuals earning more than $200,000). This approach had almost universal support from congressional Democrats, would affect only the richest 2 percent of Americans, and would still yield roughly $680 billion over the next decade, funds we could use to expand childcare, healthcare, job training, and education programs for the less well-off.
I hadn’t changed my mind on any of this—getting the rich to pay more in taxes was not only a matter of fairness but also the only way to fund new initiatives. But as had
been true with so many of my campaign proposals, the financial crisis had forced me to rethink when we should try to do it. Early in my term, when it looked like the country might careen into a depression, my economic team had persuasively argued that any increase in taxes—even those targeting rich people and Fortune 500 companies—would be counterproductive, since it would take money out of the economy precisely at a time when we wanted individuals and businesses to get out there and spend. With the economy barely on the mend, the prospect of tax hikes still made the team nervous.
And as it was, Mitch McConnell had threatened to block anything less than a full extension of the Bush tax cuts. Which meant that our only option for getting rid of them right away—an option many progressive commentators urged us to take—involved doing nothing and simply letting everybody’s tax rates automatically revert to higher, Clinton-era levels on the first of January. Democrats could then return in the new year and propose replacement legislation that would reduce tax rates for Americans making less than $250,000 a year, essentially daring Republicans to vote no.
It was a strategy we strongly considered. But Joe Biden and our legislative team worried that given how badly we’d lost in the midterms, centrist Democrats might break ranks on the issue and then Republicans would use those defections to marshal a vote that made the tax cuts permanent. Politics aside, the problem with playing chicken with the GOP, I decided, was the immediate impact it would have on a still-fragile economy. Even if we could hold our Democrats in line and Republicans ultimately buckled under the pressure, it still could take months to get any tax legislation through a divided Congress. In the meantime, middle- and working-class Americans would have smaller paychecks, businesses would rein in their investments even further, the stock market would tank again, and the economy would almost certainly end up back in a recession.
After gaming out various scenarios, I sent Joe up to Capitol Hill to negotiate with McConnell. We would support a two-year extension of all the Bush tax cuts—but only if Republicans agreed to extend emergency unemployment benefits, the Recovery Act’s lower- to middle-class tax credit (Making Work Pay), and another package of refundable tax credits benefiting the working poor for an equivalent period. McConnell immediately balked. Having previously declared that “the single most important thing we want to achieve is for President Obama to be a one-term president,” he was apparently loath to let me claim that I’d cut taxes for the majority of Americans without Republicans having forced me to do it. I couldn’t say I was surprised; one of the reasons I’d chosen Joe to act as an intermediary—in addition to his Senate experience and legislative acumen—was my awareness that in McConnell’s mind, negotiations with the vice president didn’t inflame the Republican base in quite the same way that any appearance of cooperating with (Black, Muslim socialist) Obama was bound to do.
After a lot of back-and-forth, and after we’d agreed to swap the Making Work Pay tax credit for a payroll tax cut, McConnell finally relented and, on December 6, 2010, I was able to announce that a comprehensive agreement had been reached.
From a policy perspective, we were pleased with the outcome. While it was painful to keep the tax cuts for the wealthy in place for another two years, we’d managed to extend tax relief for middle-class families while leveraging an additional $212 billion worth of economic stimulus specifically targeted at those Americans most in need—the kind of package we’d have no chance of passing through a Republican-controlled House as a stand-alone bill. As for the politics behind the deal, I explained to Valerie that the two-year time frame represented a high-stakes wager between the Republicans and me. I was betting that in November 2012, I’d be coming off a successful reelection campaign, allowing me to end the tax cuts for the wealthy from a position of strength. They were betting that they’d beat me—and that a new Republican president would help them make the Bush tax cuts permanent.
The fact that the deal left so much riding on the next presidential election might explain why it immediately provoked outrage from left-leaning commentators. They accused me of caving to McConnell and Boehner and of being compromised by my buddies on Wall Street and advisors like Larry and Tim. They warned that the payroll tax cut would weaken the Social Security Trust Funds; that the refundable tax credits benefiting the working poor would prove ephemeral; and that in two years’ time, the Bush tax cuts for the wealthy would be made permanent, just like the Republicans had always wanted.
In other words, they, too, expected me to lose.
As it so happened, the same mid-December week we announced the deal with McConnell, Bill Clinton joined me in the Oval Office dining room for a visit. Whatever tensions had existed between us during the campaign had largely dissipated by then, and I found it useful to hear the lessons he’d learned after suffering a similar midterm shellacking at the hands of Newt Gingrich in 1994. At some point, we got into the nitty-gritty of the tax agreement I’d just made, and Clinton couldn’t have been more enthusiastic.
“You need to tell that to some of our friends,” I said, noting the blowback we were getting from certain Democratic circles.
“If I have the chance, I will,” Clinton said.
That gave me an idea. “How about you get the chance right now?” Before he could answer, I walked over to Katie’s desk and asked her to have the press team rustle up any correspondents who were in the building. Fifteen minutes later, Bill Clinton and I stepped into the White House briefing room.
Explaining to the startled reporters that they might like to get some perspective on our tax deal from the person who’d overseen just about the best U.S. economy we’d experienced in recent history, I turned the podium over to Clinton. It didn’t take long for the former president to own the room, mustering all of his raspy-voiced, lip-biting Arkansas charm to make the case for our deal with McConnell. In fact, shortly after the impromptu press conference began, I realized I had another commitment to get to, but Clinton was clearly enjoying himself so much that I didn’t want to cut him off. Instead, I leaned into the microphone to say that I had to leave but that President Clinton could stick around. Later, I asked Gibbs how the whole thing had played.
“The coverage was great,” Gibbs said. “Though a few of the talking heads said that you diminished yourself by giving Clinton the platform.”
I wasn’t too worried about that. I knew that Clinton’s poll numbers were a whole lot higher than mine at the time, partly because the conservative press that had once vilified him now found it useful to offer him up as a contrast to me, the kind of reasonable, centrist Democrat, they said, that Republicans could work with. His endorsement would help us sell the deal to the broader public and tamp down any potential rebellion among congressional Democrats. It was an irony that I—like many modern leaders—eventually learned to live with: You never looked as smart as the ex-president did on the sidelines.
Our temporary détente with McConnell on taxes allowed us to focus on the rest of my lame-duck to-do list. Michelle’s child nutrition bill had already received enough Republican support to pass in early December with relatively little fuss, despite accusations from Sarah Palin (now a Fox News commentator) that Michelle was intent on taking away the freedom of American parents to feed their children as they saw fit. Meanwhile, the House was working through the details of a food safety bill that would pass later in the month.
Ratifying New START in the Senate proved more challenging—not only because, as a treaty, it required 67 rather than 60 votes but because domestically there was no strong constituency clamoring to get it done. I had to nag Harry Reid to prioritize the issue during the lame-duck sessions, explaining that U.S. credibility—not to mention my own standing with other world leaders—was at stake, and that a failure to ratify the treaty would undermine our efforts to enforce sanctions against Iran and get other countries to tighten up their own nuclear security. Once I got Harry’s grudging commitment to bring the treaty up for a vote (�
�I don’t know how I’ll find the floor time, Mr. President,” he grumbled over the phone, “but if you tell me it’s important I’ll do my best, okay?”), we went to work lining up Republican votes. The Joint Chiefs’ endorsement of the treaty helped; so did strong support from my old friend Dick Lugar, who remained the ranking Republican on the Senate Foreign Relations Committee and rightly viewed New START as an extension of his earlier work on nuclear nonproliferation.
Even so, closing the deal required me to commit to a multiyear, multibillion-dollar modernization of the infrastructure around the United States’ nuclear stockpile, at the insistence of conservative Arizona senator Jon Kyl. Given my long-term goal of eliminating nuclear weapons, not to mention all the better ways I could think of to use billions of federal dollars, this concession felt like a devil’s bargain, though our in-house experts, many of whom were dedicated to nuclear disarmament, assured me that our aging nuclear weapons systems did need upgrades in order to reduce the risk of a catastrophic miscalculation or accident. And when New START finally cleared the Senate by a 71–26 vote, I breathed a big sigh of relief.
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THE WHITE HOUSE never looked more beautiful than during the holiday season. Huge pine wreaths with red velvet bows lined the walls along the colonnade and the main corridor of the East Wing, and the oaks and magnolias in the Rose Garden were strewn with lights. The official White House Christmas tree, a majestic fir delivered by horse-drawn carriage, occupied most of the Blue Room, but trees almost as spectacular filled nearly every public space in the residence. Over the course of three days, an army of volunteers organized by the Social Office decorated the trees, halls, and Grand Foyer with a dazzling array of ornaments, while the White House pastry chefs prepared an elaborate gingerbread replica of the residence, complete with furniture, curtains, and—during my presidency—a miniature version of Bo.
