by Brian Abrams
STEVEN RATTNER
We held a whole series of meetings, and then there was the one in the Oval Office.37 We started to have this discussion with the president, and the president first said, “Well, somebody doesn’t want to do this. Where’s Austan?” And somebody went and got Austan.
AUSTAN GOOLSBEE
We’re trying to answer the questions. If Chrysler did not exist, would the people who buy Chrysler cars not buy a car? Would they be likely to buy a Ford or a GM car? In which case, the job-loss impact of just Chrysler going under would be far smaller on the nation than it would at first seem.
STEVEN RATTNER
Then the president ran out of time and said, “Let’s get together again at the end of the day and figure it out.”
GENE SPERLING
When we had the big meeting with the president in the Roosevelt Room that afternoon, the economic team was evenly split. Three or four people spoke on behalf of letting Chrysler go under. Brian Deese, Ron Bloom, and I—the three of us—each separately made the case for why we would go forward. Some people might have thought, perhaps, I had too much emotion in it because of where I was from, but I would have felt the same way if I’d grown up in Wyoming instead of Ann Arbor.
STEVEN RATTNER
Deese, Ron Bloom, and Sperling were probably the most passionate on the side of saving Chrysler.
GENE SPERLING
So when someone said, “Well, if Chrysler goes under, the other two will pick up the demand,” that, to me, was very static. You’re dealing in a world, at that time, of enormous economic fear, of unknown negative cycles that could happen, and so that was a moment where the president had a split team. He heard from everyone. He heard from his political advisors. I think David Axelrod’s heart was completely with saving Chrysler and [he] was hoping that side [would win], and yet had to tell the president that the polling was totally against it. That was his job. He had to tell the president that this was going to be a time that he should do the right thing, but it was going to be, in the short term, an unpopular thing.
STEVEN RATTNER
I didn’t think the public was that emotional about the auto rescue. I think, on balance, they were negative about it. At the time, polls showed people would be negative about it, but people were not marching in the streets saying, “How dare you bail out the auto industry?!” In general, people kind of thought to themselves, I wish we weren’t doing this, but this is not the end of the world.
AUSTAN GOOLSBEE
The president heard all sides. He said, “I hear ya. I know it’s risky, but I don’t think we can afford not to do this.” So they extended the loans to Chrysler.38 The president decided that we had to try.
JENNIFER GRANHOLM
March 29, [President Obama] said the plans that he had received from Chrysler and GM, which they had been required to put forth, were “unacceptable” and that he was going to announce that he was giving Chrysler thirty days and GM sixty days to revise them. Otherwise, he would put them into bankruptcy. And he told me that Rick Wagoner, GM’s CEO, was stepping down. I went into my Please don’t put them into bankruptcy, they won’t buy cars from a bankrupt company pitch, and he was totally compassionate . . . “I get it. I really understand. This is really difficult.”
GENE SPERLING
We were on the phone with some of the congressional delegation from auto communities,39 and one of them said, “Whatever you do, sir, don’t use the word bankruptcy.” And President Obama said, “You know I can’t do that. I’m going on TV,40 and I’m going to be clear that there are bankruptcies that lead to resolution and there are those that lead to restructuring in a stronger economy. We’re going to be the latter. I can’t get into the game where I’m afraid to use words or look like I’m not being straight.”
JENNIFER GRANHOLM
And so they had thirty and sixty days, and so he called me again to say that he was putting Chrysler into bankruptcy. This was on April 30.
GENE SPERLING
The auto rescue was really the president at his best, in terms of allowing a robust discussion, and I thought Larry Summers did a good job. At the end of the day, Larry sided with the “save Chrysler” side, but the president saw that there was an evenly divided economic team, made sure he had the sharpest presentation; he made the decision fully informed of the upside and downside risks, and I thought he communicated in a way that showed somebody talking straight.
AUSTAN GOOLSBEE
A couple of things on the economic side proved somewhat decisive. One was, Ford’s a direct competitor to Chrysler and GM. So, the normal economist model of an industry would say, “The last thing Ford would want to do would be to keep its competitors alive”—that, if anything, they should be trying to prevent the rescue of their competitors. But Ford thought GM and Chrysler should be rescued. All three of the big automakers shared tons of suppliers. So they said, “If Chrysler fails, and if that leads to the brake manufacturers going under, then we’re doomed, because we’re not going to be able to get brakes for our cars.”
STEVEN RATTNER
Probably a defining moment, although there were several, was getting Chrysler out of bankruptcy on June 9, because that did go to the Supreme Court. But besides that, we were using a bankruptcy process that had never really been used on something of this scale or on this kind of a timetable, and we weren’t sure it would work. It would have been like putting an airplane together in your driveway and then wondering if it was going to fly. So when the Supreme Court refused to deal with it and we got [Chrysler] out of bankruptcy,41 [when] GM went into bankruptcy on June 1, at that point we assumed that if Chrysler had worked, then GM would work. And so that was probably the most exciting moment of the whole thing. If you will, the most monumental point.
ERIC LESSER
For the most part, everyone at the White House had clearly delineated lines of authority. The economic advisor handled banking regulations and financial issues. The press secretary answered questions from the press. The domestic policy advisor managed the domestic-policy portfolio. The energy advisor did climate change, and on and on and on. David [Axelrod]’s role was unique. He kind of floated at thirty thousand feet and took into consideration the whole picture of policy and political implications, the public-affairs and press considerations, of every single issue at every dimension, and synthesized all of that into coherent broad advice. As a result, he really was kind of involved in everything.
DAVID AXELROD
It was like being in a submarine, in that, when you worked there, you rarely left. You went in at dawn and had breakfast, lunch, and often dinner there. You’d just go serially from one consequential meeting to another, and you’d see many of the same people throughout the day, and . . . you do feel sort of insulated there. The other reason the submarine analogy appeals to me was that you also looked at the world through a periscope.
MELODY BARNES
You’re the consummate insider because it’s the White House, the center of power in a city very much focused on power. There’s an interesting tension with that. For those of us who did the work day-to-day, you were so immersed in that, for better or for worse, and in what people would call “the bubble.” My husband would say, “It’s not a bubble. It’s a cave.” A bubble is transparent. You can see out. A cave is not. And you went in that building and felt all of the pressure, whether it’s the news being spun about you, or the very real and challenging problems that were coming to you every day.
DAVID AXELROD
You’re never sitting there making paper dolls or looking at the clock and waiting for it to hit five. Whenever I looked at the clock my question would be, “Where did all the time go?” But the downside of it was, it was very insular.
MELODY BARNES
One of the challenges was to stay attuned to what’s happening outside the White House.
TED KAUFMAN
I was only going to be [in the Senate] for two years. I had gone to Wharton School. Finance was natural f
or me, and, even though I was not in the finance committee areas, I was concerned about the crisis. There had to be a way to send a message. So I found out on the Judiciary Committee, the chair, [Patrick] Leahy, and [Republican member] Senator Grassley had this bill, the Fraud Enforcement and Recovery Act. So I got involved to do the kind of legwork, to write op-eds and go on TV shows, stuff like that. Then after the bill passed, Leahy let me chair two oversight hearings on how it was being implemented.42
DAVID OGDEN
There were all the various initiatives with the economy. The Chrysler and GM situations were very complicated legally, and then you had the ongoing investigations, which were getting under way, of the various institutions that had been at the heart of the crisis. They were run by the career prosecutors who were experts at financial crime . . . There was, in general, an appetite, I would say, for bringing those cases if they could be made.
TED KAUFMAN
Lanny Breuer43 and Robert Khuzami and the number-two guy in fraud enforcement in the FBI, testified. I met with them before the hearing, and they said, “Look, you know, we’re really into this stuff.” And by the way, the one thing you couldn’t do was ask them about specific prosecutions. It’s just not right for Congress to talk to prosecutors about whether they’re going to prosecute a case or not . . . They hadn’t done anything yet, which was okay at the time. It was brand new.
CAROLYN MALONEY
Anytime you take on the banks, it’s difficult. I started working on the Credit Cardholders’ Bill of Rights in 2007, and I could not even walk down the street or even to the floor of Congress without people coming up to me about how unfairly they were treated by credit-card companies. Everybody had a story, and when members of Congress started telling you about their credit-card stories you knew it’s just a horrible thing. So I put together the consumer groups with the banks to come up with a list of goals that we wanted to put in the bill. We came up with the list, and, little did I know, the banks would fight it tooth and nail.
CHRIS DODD
Of course, the credit-card companies didn’t help themselves—the Frontline stories about the abuses, and all of these various provisions that were six different ways to take consumers to the cleaners. You know, they used to call those who paid their monthly bills on time “deadbeats.” There was no financial value in having you as a card-carrying member. They loved the people who would make the minimum monthly payments. Those were the ideal customers, in a sense. And so they were a major asset in getting the legislation passed, and, obviously, having the president and the administration on your side didn’t hurt either.
CAROLYN MALONEY
They had all kinds of ways to trap people into huge amounts of debt. The CARD44 Act would effectively eliminate [hidden and excessive] fees by requiring them to get an affirmative opt-in from consumers, and when President Obama adopted it and it became an issue that he ran on, that started a whole new momentum.
CHRIS DODD
The credit-card legislation went flying through.
CAROLYN MALONEY
I was the only woman at the bill signing,45 and all these male senators started standing in front of me. I literally wrote this bill and worked on it nonstop for a long time, and they started pushing me out of the way. And President Obama came over, grabbed my hand, pulled me up and said, “No, it’s her bill.” He had me stand right behind him.
DANIELLE CRUTCHFIELD
President Obama was, for the most part, very punctual. As a scheduler it’s the best thing ever. You could make a schedule, and of course things always came up that you had to change, but President Obama was always conscious of the fact that he needed to get to the next thing, which was one of the things that separated him and made him very different. President Clinton would linger out on that tarmac forever.
MARK LIPPERT
We went to Saudi and then to Egypt. I think the thinking was to go to the Saudis, meet with the king, get that bilateral relationship—as sticky as it can be—in good order, then the Egyptians were next. So the Saudis got the order number one in terms of the stops, and the Egyptians got a significant speech.
DAN SHAPIRO
There was a question of where he would [give the speech]. People advocated a Muslim capital that might be less fraught. Some thought Indonesia, because he had his own early-years experience there, and it’s a way of taking less risk to go to a country that’s not quite at the center of the issues around terrorism. Others thought he’d split the difference and go somewhere like Morocco. He argued that if you were going to do this, you’d have to go where the problem [was]. You had to go right to the heart of it, Cairo being the heart of the Arab world and where Islamic extremism had been playing itself out.
MARK LIPPERT
[Speechwriter] Ben [Rhodes] was the driving force on that one. He did a lot, as I recall, working with Dan and a few others. I think John Brennan also, because John was the counterterrorism advisor but also had a lot of experience in the Arab world. He had been the [CIA] chief of station in Saudi Arabia. I was more of the logistics guy, so [I took care of] the planning and travel associated with it.
DAN SHAPIRO
He wanted to say to an Arab audience in an Arab capital, You need to put aside your dreams of Israel’s disappearance or of somehow convincing the United States to separate itself and weaken our commitment to Israel. That’s not going to happen. And, at the same time, he demonstrated his understanding of Palestinian aspirations—that that was also a commitment that we could maintain, that those could reside together. That meant, among other things, we were going to advocate ending [Israel] settlement expansion as one of the things that contributed to the stalemate that we inherited.
DAVID AXELROD
I was there. It was an extraordinary moment. Of course, it was tricky because he was doing something that hadn’t been done before. Obviously there were some domestic political issues surrounding that, and unhappiness in Israel and some of the American-Jewish community about it.
DAN SHAPIRO
The idea was to do some truth telling to all sides. That was very much Obama’s kind of concept. Let’s stop dancing around certain taboos and talk hard truths and get on with some improved relationships and hopefully some improved prospects.
DAVID AXELROD
He felt strongly that we needed to make the Muslim world allies in this fight against extremism. He wanted to signify an open hand to those who wanted to work with us. And the speech was challenging in places, challenging to Israel about the settlements [and] challenging to the government of Egypt over corruption and the treatment of women.
DAN SHAPIRO
This obviously didn’t just pop up as a momentary afterthought of a policy. This was a very well-thought-through decision that he, having observed the difficulties we were having in relationships with many Muslim societies and many Arab Muslim countries—in large part because of what had gone on during the Iraq War—that there was an opportunity and need to begin a different kind of conversation.
ERIC LESSER
Obama is very deliberative. He’s open minded. He liked to seek out alternative viewpoints. He thought about things on very granular levels but also intellectual levels, and that style suffused the team. Even the very junior people like me, you couldn’t help but absorb that.
JACKIE NORRIS
I was lucky to have had a seat at the table during the most historic, in my lifetime, moment in time.
TED CHIODO
The first two years were hot and heavy with everything. You had staffing of the government. We were trying to implement our policy. The Recovery Act was going on. You had the health-care bill. Everything was taking off at the same time.
ROB ANDREWS
I read a draft [of the health-care bill] on a trip to Las Vegas. It was enormous. I carried it onto the plane, and I couldn’t throw out the pages because they were sensitive and private. I had to carry them in a bag until I could find a shredder, but [around] then the committees in the House proceeded
to mark up the bill.
CHRIS DODD
We went through the longest markup [in the Senate Health Committee]. It began in June of ’09 and we finished on July 15 of ’09. The big debate items were more in the Finance Committee.
DAVID BOWEN
There were two committees in the Senate and three committees in the House that had significant jurisdiction over the ACA. Someone had to go first, and we went first. That was very much a product of Senator Kennedy’s desire to move things forward quickly. As you know, he was quite sick and wasn’t able to come back to Washington that often. And when he came back in May, he met the whole staff. For everyone else, he’d say, “Oh, Jeff, hi. How are you doing?” and “Oh, hey, Melanie. How are you doing?” He came to me and just said, “Where’s my bill?”
CHRIS VAN HOLLEN
A priority of House Democrats was [also] doing something on the clean-energy front. So there were timing issues about whether we should take up the Affordable Care Act or the clean-energy legislation first, because Nancy Pelosi was interested in moving the Waxman-Markey bill.46 Rahm and I were on the same page and urging that we take the Affordable Care Act first because we recognized the Senate did not have the bandwidth for both.
JOHN TANNER
D-Tennessee, Eighth District, US House of Representatives (1989–2011)
[The Waxman-Markey bill] wasn’t going anywhere in the Senate, and although it’s an important issue, it was not the issue du jour. When Obama got elected in ’08, we were in the midst of a horrible recession. The life of the planet was secondary to the economic life of the United States. And cap-and-trade [legislation] had more to do with the economic life of the planet than it did the economic life of the United States. I think that the [House] leadership and the White House lost the connection with the people that led to the election of Obama. They said, Wait a minute. What are y’all doing? We want to get out of this recession, then we’ll worry about this. So it was an important issue, but it was the wrong issue at the wrong time. That poisoned that Congress.
