Bob Woodward on the 2011 summer, when the United States faced default on its debt

Bob Woodward, of the Washington Post and Watergate fame, has interviewed the major protagonists for this taut account of the three and a half years before the middle of 2012.

The main cast is impressive — Mr. Obama, the first African-American president of the United States, Vice-President Joe Biden, the Senate majority leader, Democrat Harry Reid, the minority leader Mitch McConnell, the Speaker of the House of Representatives, Democrat Nancy Pelosi and her successor, the Republican John Boehner, and, with increasing importance after the Republicans won the House in the 2010 Congressional elections, the House majority leader Eric Cantor. Woodward goes into particular detail over the 2011 summer, when the country faced an unprecedented default on its debt.

The battle lines were drawn the day Obama took office. The President had inherited from his predecessor George W. Bush the biggest budget deficit in history, but further cuts to public spending on education and healthcare — in Illinois, one third of children qualify for Medicare — would make his supporters “howl and act as though we had dismantled the New Deal”. The House Republicans, however, hate all such spending on ordinary people; they had earlier voted for Bush’s Troubled Assets Relief Program, which gave profligate and insolvent banking giants 700 billion taxpayer dollars. Yet Obama’s talk of bipartisanship seemed to offer them some influence.

That was a fantasy. All involved knew that the collapse in aggregate demand, with Americans fearing the future and ceasing to spend, was the problem; but the Republicans, with their unbounded faith in small business and low taxation, rejected anything that might provide revenues to the federal government — and might have enabled it to increase stimulus spending.

Sheer low politics might have done more for the Democrats. The Republicans were in fact dismayed that the President’s $787-billion economic stimulus was so small. Facing an election in 2010, they wanted Washington pie for their own districts, and a larger pie could have left them owing Obama political debts. The administration, however, did itself no favours, with infighting and some breathtaking arrogance. The head of the Business Roundtable, Ivan Seidenberg, delightedly accepted an invitation to the President’s Super Bowl party, but got only 15 seconds with Obama, who then went down to the front row to watch the match. Later, a White House staffer vulgarly rubbished, to Seidenberg’s face, several specific proposals the administration had asked him for. The then White House Chief of Staff, Rahm Emanuel, often said about Republican opposition in Congress, “****’em. We’ve got the votes.” Even the President reminded Eric Cantor, who tightly controlled House Republicans, that he, Obama, had won the election.

This was even worse than the incomprehension shown by President Jimmy Carter, whom the then House Speaker Tip O’Neill repeatedly implored to maintain closer contact with Representatives. The final version of an Obama rescue bill contained not one of the proposals the Republicans had discussed with the President; they were furious.

If bipartisanship was in trouble then, it ended when the 112th Congress took office in January 2010. The new, huge, Republican majority in the House contained large numbers of Tea Partiers — extreme moral individualists totally against all federal activity except militarism and domestic surveillance.

They blocked everything Obama tried, and made it impossible even for the Republican Speaker John Boehner to offer anything concrete to the President, who himself incurred Senate Democrats’ suspicion for seeming to go round them almost to the point of breaching the Constitution.

The Republicans also knew that bipartisanship would harm them. If Obama succeeded, they got no credit. If he failed, they shared the blame; bipartisanship, moreover, would cause more divisions among them than it would among the Democrats. Perhaps as a result, Boehner even stated on Fox News that the Republicans had proposed the only plan for dealing with the crisis; in fact he and the White House had been trying to draft a plan for the previous 18 months.

Serious problems

Washington lurched on. Since Woodward’s book appeared, Congress has approved a deal whereby people on over $400,000 a year pay a little more income tax, but those with estates above $5 million will pay a reduced increase on estate tax. Those on unemployment benefit get another year of it, and middle and lower earners get some tax breaks on childcare and college fees — but yet another battle awaits, over the now-delayed spending cuts and the amount the federal government will be allowed to borrow. This has nothing to do with budget deficits; the federal deficit has shrunk from 10.1 per cent in 2009 to 7 per cent today. This war is about visions of society, and thereby of a human life.

Woodward indirectly reveals serious problems. The Framers of the Constitution thought they would preclude the intrigues of the 17th-century European courts, but Washington manoeuvring and suspicion amount to little else. As for factionalism, the current House Republicans may be the most united and bitter group ever seen in Congress. Furthermore, as one character says, the President must be seen to dominate Congress even when he does not do so. This brave new world replicates 17th-century Europe.

Those Obama supporters, nevertheless, who stayed away from the 2010 elections in disappointment at the President’s failure to perform miracles, and thereby gave the Republicans the House, have some responsibility for the mess. Expecting a knight on a white charger, they have helped create a situation in which they and the President are incessantly attacked by a rogue elephant.

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