Chapter Seven
The Battle Begins

JACK LEW OFFICIALLY OPENED THE BUDGET SEASON ON VALENTINE’S Day 2011, throwing out the first ball—Obama’s proposed budget for 2012—with a press conference in the rather plain auditorium of the Eisenhower Executive Office Building.

The fifty-five-year-old Lew, a blend of lawyer, accountant, and policy wonk, had been the budget chief years earlier during the Clinton administration. In the first years of the Obama administration, he had served as a deputy secretary of state. When Peter Orszag vacated the OMB post the previous summer, Obama asked Lew, who began his career as a policy adviser three decades earlier for then House Speaker Tip O’Neill, to return to his old job. Lew, a measured and even-tempered fellow, was known as a sharp negotiator who had acquitted himself well during the Clinton-era dogfights when the Democrats had beat back the Republican revolutionaries.

Now Lew was back—but under much different circumstances. His boss this time was a more careful fighter who did not relish political brawling the way Clinton had, and the current president inhabited a different, perhaps weaker position than Clinton had held. The economy was in trouble (not expanding as it had during Clinton’s presidency), and the Republican opposition was more rigid. Moreover, the stakes were higher. A government shutdown or a national default—outcomes that some Tea Party GOP lawmakers were actually rooting for—could send the economy into a double-dip recession. This budget showdown would not be a replay of the 1990s face-off.

An accomplished numbers cruncher, Lew, the son of a Polish immigrant, tried to see the world beyond the green eyeshade. He once told an interviewer, “Budgets aren’t books of numbers. They’re a tapestry, the fabric, of what we believe. The numbers tell a story, a self-portrait of what we are as a country.”

Lew was not telling a glorious story this Monday afternoon. Nor was it the full story. Obama and his aides were releasing a placeholder budget, hoping to draw the Republicans into a you-go-first trap—that is, as much of one as David Plouffe could manufacture.

The budget Lew described called for $1.1 trillion in deficit reduction over the next decade. Two-thirds of that would come from spending cuts, including a five-year freeze on nondefense discretionary spending—the financing of medical research, food safety, financial regulation, national parks, and all the other programs Congress must fund every year.

Suspending the routine increases (that cover inflation and population growth) in this 12 percent chunk of the overall federal budget would amount to $400 billion in savings. This would bring spending in this category (as a percentage of the gross domestic product) to its lowest level since the days when Dwight Eisenhower was in the White House. Under this plan, over half of federal agencies would experience dramatic reductions. But these were, supposedly, desperate times. The administration predicted a record-setting $1.6 trillion deficit for the year, yet projected it would decline to $600 billion by 2018.

Standing before the room of reporters, Lew identified several programs Obama had okayed for the chopping block: community development block grants, the Great Lakes restoration initiative, airport grants, water treatment projects. The list also included low-income heating assistance—a heartbreaker for Lew, who had helped to develop the program decades earlier. (The administration’s proposal would reduce the EPA’s budget by 13 percent and eliminate the cap-and-trade plan for reducing climate change emissions.) Almost $80 billion would be sliced out of the Pentagon’s purse over five years. Thankfully, the cost of the Iraq and Afghanistan wars would decline in the years ahead.

And Obama’s budget would hike taxes on the well-to-do by reducing the value of itemized deductions and eliminating tax breaks for oil, gas, and coal companies. Under this proposal—which was indeed a wish list—the Bush tax cuts for the wealthy would end in 2013.

The good news, Lew said, was that the budget included critical win-the-future investments in education, innovation, and infrastructure, including $148 billion for R&D and $50 billion for transportation projects. Education spending would receive an 11 percent boost.

The first question from the pack of Washington journalists was obvious: Why hadn’t the president incorporated the Bowles-Simpson recommendations into his budget?

The commission Obama had created as political cover during the previous year’s budget season had set a magic number of $4 trillion in deficit reduction for Washington’s debt watchers. Obama’s budget weighed in at one-quarter of that amount; it did not propose the significant cuts or savings in Medicare, Medicaid, or Social Security that deficit hawks always desired. The president and his advisers knew they would be assailed by the Republicans and deficit-reduction obsessives for falling so short of the Bowles-Simpson number. But they were sticking to Plouffe’s plan, which called for letting the other side go first.

Lew noted that the president would be delighted to work with Republicans on a “long-term solution” to the nation’s debt woes. He declined to specify just how such a process should—or would—begin.

One reporter, noting the budget reflected the “winning the future” theme of the State of the Union, asked what Lew would say to an unemployed American who wondered what “short-term, jobs-creation benefits” were contained in the plan.

Lew briefly referred to the unemployment insurance benefits previously extended in the lame-duck tax-cut accord. He then cited the infrastructure boost in this budget. But he didn’t have a longer list. Lew said this budget was “designed to deal not just with the short-term, but over the horizon to make sure we have an economy that does provide those opportunities.” There was no jobs-jobs-jobs message.

LEW WAS PLAYING OBAMA’S OPENING GAMBIT. IT WOULDN’T SATISFY the deficit-fixated pundits and pols of Washington or the “markets.” Nor would it hearten progressive advocates or Democratic allies on the Hill. But David Plouffe and the president were sticking to the script: let Congressman Ryan have a few good weeks as the town’s number one deficit slayer and wait for the Tea Party–controlled Republicans to release their long-term slash-slash-slash budget plan before getting serious.

At White House meetings, Plouffe would say, “We’re just going to have to endure this.”

Obama, Plouffe, and the rest knew that the headlines weren’t going to be good—and might not be for a while, with Obama holding back, playing rope-a-dope. And the inevitable criticism and attacks rained down. The Washington Post reported, “Obama’s budget makes clear that he will not take the lead in that debate: It contains no specific recommendations for tax or entitlement reform.”

Representative Paul Ryan exclaimed, “What we have here is a total abdication of leadership and talking points based on gimmicks and cooking the books.”

Democratic Senator Kent Conrad, the chair of the Senate Budget Committee, griped, “If we’re going to get this debt down to a level that’s sustainable, then we’ve got to do substantially more than $1 trillion worth of deficit reduction in the next decade. We just do.”

Obama was allowing himself to be excoriated. He’s no leader. He has no plan . . . and no guts. He’s weak. He was taking the hit—providing Republicans with space for their own extremism. And it seemed to be working.

Responding to Obama’s 2012 budget, Boehner vowed that the Republicans would address Medicare and Social Security when they released their budget in the spring.

OBAMA’S 2012 BUDGET WAS LANDING IN A BATTLEFIELD WHERE hot and heavy fiscal policy warfare was already under way. In a few weeks, on March 4, the legislation approved in December to fund the government temporarily would expire. Without another continuing resolution—CR, in Washington parlance—for the rest of the 2011 fiscal year, the government would shut down. The Tea Party Republicans had a hostage situation to exploit.

The Republicans had seized the House on a promise of ripping $100 billion out of the 2011 budget. That was a tremendous sum, especially because they were only targeting nondefense discretionary spending. Soon after settling into their new offices, House Republican leaders proposed $32 billion in cuts within a CR funding the government through September 30. But Tea Partiers and veteran conservatives inside and outside the House protested that this was not good enough.

“This was the first notice of the power of the freshman Tea Partiers,” a House Democratic staffer observed. “They were telling the speaker and the appropriations chairman to go screw yourself.”

Three days before Obama unveiled his 2012 budget proposal, the House Republicans, responding to the Tea Party revolt, released a new and expanded hit list of proposed immediate cuts totaling about $61 billion. Though some Tea Partiers still moaned about falling short of the $100 billion pledge, House Republican leaders explained that the CR covered only seven months.

Blood was in the water. Pell grants would be reduced by 15 percent, imperiling college for millions of low-income students. Head Start would be slashed, meaning hundreds of thousands of children from poor families would lose their places in this antipoverty preschool program. The federal food inspection program would be downsized. Funding for schools with needy children would be eviscerated. AmeriCorps and the Corporation for Public Broadcasting would be zeroed out. The WIC program providing nutritional support to low-income women and infants was slated for a $747 million slam. The EPA’s budget would be cut by almost a third, with its climate change programs reduced by $100 million. The Securities and Exchange Commission, despite (or because of) its new responsibilities to enforce Obama’s Wall Street reform law, was pegged for a whack. Foreign aid would be severely shrunk.

This was a declaration of war. The raise-no-taxes Republicans were raiding dozens of critical programs that provided assistance to low-income families and others. The Senate Democrats released a report detailing the potential damage: 3,000 police officers dismissed, 65,000 teachers fired, 218,000 kids tossed out of Head Start.

“If we follow the House Republicans’ road map,” Senator Chuck Schumer, a New York Democrat, exclaimed, “it will lead the country over the cliff.”

When asked about the Republican plan to hack $61 billion out of this year’s spending, Obama responded in a subdued manner, noting he opposed “steps” that would “prompt thousands of layoffs in state or local government” or impede “core vital functions of government,” for that would “have a dampening impact on our recovery.” He didn’t denounce the Republicans for placing the nation on the road to ruin.

At one of the White House’s daily press briefings, a reporter noted that Obama’s response had been “muted” and asked Jay Carney, the new press secretary, whether the president believed that “the Republican cuts are dangerous . . . going after things like the SEC and the climate change programs.”

Carney offered a dispassionate response: “The president has made clear that he doesn’t—we cannot support arbitrary or irresponsible or deep cuts.” It sounded like routine cant. Carney didn’t even bother to mention that the Office of Management and Budget had quietly issued a statement noting that the president would veto the House Republican spending bill if it contained these cuts.

There was a reason for the low volume. Obama and Plouffe were hoping the White House could duck a major clash over the 2011 spending bill. The president and his aides wanted to skate past this quickly, avoiding a government shutdown they feared could screw up the already weak economic recovery. Plouffe saw bigger battles ahead with the 2012 budget and the debt ceiling. The 2011 budget was merely a leftover skirmish best disposed of sooner rather than later. There was no need to rush to the ramparts.

So the message went out from the White House to the cabinet secretaries: your agencies may be targeted for deep cuts, but we’re going to take care of it without turning this into an all-out partisan slugfest. A similar message was sent to various policy advocacy outfits, including environmental groups, public health associations, advocates for low-income programs, and the unions: the president won’t be fully assailing these spending cuts, but feel free to attack on your own.

White House aides told their progressive pals they were keeping the president from looking overly partisan at the start of this face-off with the Republicans. The liberal advocates pointed out that programs for children and seniors would get clobbered. Moreover, after screaming for months, “Where are the jobs?” the Republicans were now bent on cutting spending no matter the impact on employment. (Mark Zandi, Moody Analytics’ chief economist, estimated the bill would cause the loss of seven hundred thousand jobs.) White House aides promised they would do all they could to stem the damage, and explained that in order to be effective Obama had to stay above the fray.

“I kept hearing this above-the-fray line, and I wanted to throw up,” a progressive policy advocate said.

ON FEBRUARY 19, BOEHNER AND HIS HOUSE REPUBLICANS, ON A party-line vote, passed the CR, which also contained dozens of provisions known as riders aimed at preventing the president from carrying out various environmental and health care policies that offended conservative sensibilities. Asked about the measure, Carney offered a rather calm response: “We continue to believe that we will be able to work out common ground on these issues.”

This disengagement was puzzling to outsiders. A former Obama White House official said at the time, “What the hell are they doing? Why are they not attacking back? The Republicans are framing the whole debate.”

The White House’s strategy was not readily apparent beyond the West Wing. “We wanted to manage that first exchange,” Axelrod later explained.

Obama and his staffers knew these cuts were never going to become reality; they would be blocked in the Democratic-controlled Senate. As one White House official put it, “If the cuts were heading to the president’s desk, we’d be out there fighting them. . . . We had a strategic goal, and we were willing to take a short-term hit.”

There was a lot of hit-taking going on. The president was being lashed by deficit hawks for not unveiling a comprehensive tackle-the-debt scheme. He was disappointing progressive policy advocates by not assailing the GOP’s effort to shred the government. His approval rating among independents was down from the previous month.

Obama could not publicly explain the strategic reasoning behind these decisions. If he acknowledged openly that his budget was merely a tactical placeholder or conceded that he did not consider the CR the main event, he would undermine his own negotiating position in each of these battles—and enrage, respectively, the deficit-first crowd and his progressive allies.

Whether or not these were the right tactical moves, one thing was certain: it was not possible to have a presidency with explanatory footnotes.

OBAMA WAS JAMMED IN ANOTHER WAY. HE AND HIS ECONOMIC advisers feared that a government shutdown could trigger a severe economic downturn by shaking the markets and undermining consumer and business confidence. They would have to reach a deal, just as they had during the tax debate in December 2010.

At one meeting with the president, Lew and other members of the economic team gave him the big picture: the House Republicans were driven by their $100 billion promise and to achieve that they would have to decimate the programs Obama cared about the most, including Head Start and education programs. But Lew, who knew his way through the weeds of the federal budget, pointed out that if the cuts could be held to less than half that amount, he could structure the reductions so the impacts would not be severe and the president’s favorites could be protected.

You won’t have to choose between funding for the National Institutes of Health and Head Start, Lew told him.

Go ahead, the president said.

ON MARCH 1, THE HOUSE REPUBLICANS AND SENATE DEMOCRATS worked out a temporary compromise on an interim spending bill that would finance the government for two weeks beyond March 4 and would trim $4 billion from this year’s spending (which included rescinding unspent money for water projects and economic initiatives). Two days later, as Biden, Daley, and Lew were motorcading to the Hill to hold the first session of budget talks with the Republicans, Gene Sperling and Dan Pfeiffer came to the White House briefing room to announce that Obama was willing to cut $6.5 billion from his budget to meet Boehner halfway.

The math was a bit complicated. As Sperling explained it, the CR that funded the government through March 4—which Obama signed—was $40 billion below the president’s budget request for 2011. The recent, short-term extension had included $4 billion in cuts. And with the new $6.5 billion in reductions—which Sperling would not detail—the president had reached $50 billion in cuts, which was half of the $100 billion the Republicans had promised.

But House Republicans were claiming that their budget measure sliced $61 billion from current spending levels—not from Obama’s larger 2011 budget request, which was never enacted. From their perspective, Obama was counting a $40 billion cut that didn’t actually exist and accepting only $10 billion in additional cuts.

So was it $100 billion versus $50 billion, or $61 billion versus $10 billion?

This focus on the numbers (open to debate) showed how difficult it would be for the Obama administration to avoid the who’s-cutting-more story line and push a growth message.

At this briefing, John Harwood, a reporter for CNBC and the New York Times, asked Sperling if the president was ratifying the GOP’s central operating premise that cuts were good economic policy.

“You’re saying substantially that [the Republican] premise is correct,” Harwood inquired, “that by definition cuts are not anti-stimulative, and, in fact, the [confidence-boosting] benefits could outweigh the . . . loss of particular jobs?”

Sperling sidestepped, noting that spending cuts might indeed yield “confidence benefits”—meaning more business investment and consumer demand—but if “done too deeply” they could have a “negative impact” on the economy. He was not willing to specify the “exact level” of spending cuts that might be expected to harm the economy.

ON CAPITOL HILL, AFTER THE MEETING BROKE UP BETWEEN White House officials and congressional leaders, Boehner took Reid aside.

“We don’t need these guys,” the speaker told the leader, referring to the White House gang. Boehner thought he and Reid could bang out an accord on their own. They were both legislators who operated in the old-fashioned style: work out a deal that makes everyone unhappy, then shake hands.

Reid nodded and remembered the advice Representative Steny Hoyer had recently given him about Boehner: He’s a nice guy, you’ll enjoy working with him, but he can’t close the deal.

AS NEGOTIATIONS GINGERLY MOVED FORWARD, BOEHNER AND the Republicans remained fixated on downsizing federal agencies and programs now, with the Tea Party House members yearning for even deeper reductions than the whopping cuts already approved by the House.

In the Senate, moderate Republicans were complaining that their House comrades had gone too far. And moderate Senate Democrats, including several worried about reelection the following year, were complaining that a Democratic countermeasure to the draconian House-passed CR did not cut enough. In the upper chamber, both that Senate Democratic alternative and a GOP bill reflecting the House Republicans’ cuts failed. There was a stalemate.

Jack Lew and Rob Nabors, who now headed the White House legislative office, were trekking regularly to Capitol Hill to meet with Boehner’s chief of staff, Barry Jackson, and Reid’s chief of staff, David Krone. But this was all hush-hush. One day, Capitol Hill reporters spotted Lew and Nabors meeting with Boehner staffers in one of Reid’s offices, but none of the participants would confirm that any substantial talks were under way.

The mood was tense at a mid-March lunch meeting of Senate Democrats and David Plouffe, Jack Lew, and Gene Sperling. Several of the lawmakers were upset that the president had been doing what they perceived as his above-the-fray thing in the past few weeks, while they’d been in the trenches trying to beat back the Republican antigovernment crusade. They were also worried that Obama would undercut them and yield too much on spending cuts in these private talks with Boehner’s staff.

The venting at the lunch continued: Obama wasn’t shaping the debate; he wasn’t pounding the Republicans. When Senator Al Franken didn’t receive a sufficient reply to a question about the status of the budget talks, he shouted at Sperling, “Give me a goddamn answer. Just give me a fucking answer.”

The administration officials were reluctant to disclose any of the concessions Obama or Boehner were discussing for fear they would quickly leak to the media—and these proposals would immediately become targets. Tea Partiers, in particular, were poised to go ballistic over any sign that Boehner was being reasonable.

“Progress was being made in the talks,” a senior Democratic Senate aide later said. “But it was all so fragile. Every time Boehner’s staff talked to Reid’s staff, the eighty-seven House Republican freshmen and the Tea Partiers would get upset and ask, ‘Why are you even negotiating?’ ”

ON MARCH 11, OBAMA HELD A PRESS CONFERENCE TO ADDRESS spiking oil prices and to discuss the earthquake and tsunami that had rocked and flooded Japan. He encouraged Republicans and Democrats in Congress to reach a compromise, but he declared there were GOP proposals he would not accept, such as cutting Pell grants and bouncing kids out of Head Start.

Nor would he stand for the dozens of legislative riders Republicans had attached to the bill dictating various policies. These measures would block the Obama administration from implementing its health care overhaul, from regulating certain pollutants and greenhouse gas emissions, from setting up the Consumer Financial Protection Bureau, from creating a consumer products complaints database, and from providing money to Planned Parenthood for (nonabortion) gynecological services it made available to low-income women in health clinics across the country.

The president was finally engaging. The Republicans, he contended, were exploiting the budget battle to advance their favorite conservative causes.

“My general view is,” he said, “let’s not try to sneak political agendas into a budget debate.”

These weren’t quite fighting words, but Obama’s line in the sand was real, if not boldly etched.

With the negotiations proceeding in a low-profile manner, the House passed another extension setting April 8 as the now-we-mean-it deadline and slicing another $6 billion from 2011 spending. The vote count was a warning to both Boehner and the White House. The speaker lost fifty-four Republicans—a combination of Tea Party freshmen and veteran right-wingers. Without them, he needed Democratic votes to pass this crucial bill, and eighty-five House Democrats obliged—only to avoid a shutdown. Though Boehner and other GOP leaders had urged all the House Republicans to hold together, close to a quarter of his caucus wanted to threaten a shutdown to force Senate Democrats and the White House to accept deeper cuts.

This episode rankled House Democrats who felt they had saved Boehner’s hide but were still being cut out of the main action—the Capitol Hill–White House negotiations. When Bill Daley met with the House Democratic caucus that day, he was forced to listen to complaints about Obama being disengaged and waiting to leap in at the end to resolve congressional bickering. Daley noted that Obama didn’t want to come across as “too shrill” and maintained that a replay of Clinton’s victorious 1995 assault on the Gingrich Republicans was not possible, given the present circumstances.

IN THE SECRETIVE NEGOTIATIONS, A PATTERN SET IN. THE REPUBLICANS would complain that the Democrats were not cutting enough (the White House was now offering about $20 billion in reductions below current spending levels); the Democrats would complain that the Republicans kept shifting their position because Boehner was under pressure from Tea Party Republicans who were against any compromise and wouldn’t mind if the government came to a grinding halt.

At the same time, Senate Democrats were worried that a freelancing Daley might hand Boehner more cuts than they fancied and undermine their negotiating posture.

Obama, in accordance with the White House plan, was not saying much in public. Robert Reich, in one of his many television appearances, pleaded for Obama to spring into action: “The president is the only one who has the bully pulpit. If he doesn’t counter these Republican mistruths, then he is going to be in trouble next year.”

In the final week of March, Boehner’s negotiators suggested that the speaker might settle for about $35 billion in cuts—instead of $61 billion—if Obama would yield on several of the riders. The White House signaled it could go as high as $33 billion. (The discretionary budget would end up near $1.05 trillion, so this difference was budgetary crumbs.)

On March 30, Vice President Biden spoke to Boehner and tried to lock in the $33 billion level. Boehner refused to agree until the riders were resolved. That day, at a closed-door Republican caucus meeting, Boehner, speaking of the Democrats, boasted that he would “kick their ass.”

Reid, for his part, was ticked off at the White House for accepting such a high number. He wasn’t happy that Daley had pushed the talks along by apparently offering more cuts to Boehner. “Daley was going rogue,” a senior Democratic Senate aide recalled.

The next day, Reid publicly declared that the Democrats and Republicans had agreed to $33 billion. Boehner, though, refused to acknowledge any agreement. “Nothing will be agreed to until everything is agreed to,” the speaker said, and insisted he was still fighting for the $61 billion measure.

Reid and his negotiators knew Boehner had consented to $33 billion but that he couldn’t dare admit this in public without being assailed by his fellow Republicans. Cantor was waiting in the wings to lead a rebellion if Boehner lost control of his caucus.

THE PRESIDENT DIDN’T HAVE THE LUXURY OF PONDERING ONE knotty dilemma at a time. The fire hose was always turned on. Crises hit (uprisings in the Muslim world, a Japanese nuclear meltdown), and issues and events were always looming. Forget multitasking; this was hypertasking. And despite the rush of current problems, the president always had to be looking ahead. So as the dustup over the current spending levels continued, Obama was plotting the next phase of the fight: a big deficit plan that would be accompanied by a call for bipartisan negotiations to resolve the nation’s entire fiscal situation.

Sperling was holding meetings to craft a major deficit-reduction proposal. He organized subgroups to ponder the various pieces: Medicare and Medicaid, tax revenues, discretionary spending, mandatory spending. It was tough to do this while the CR negotiations were proceeding and a possible government shutdown neared. But there was a saying in the White House: Don’t be the soccer ball. That is, kick rather than be kicked.

Sperling believed that any deficit-reduction framework Obama made public would have to contain enough specifics to be seen as credible—without giving away too much before the negotiations.

Eventually, Sperling and his colleagues began presenting options to Obama, who had no problem immersing himself in the eye-glazing details. Both the Bowles-Simpson commission and Ryan’s budget had claimed about $4 trillion in savings over ten years. Sperling and his economic team did not believe that amount of cutting could be achieved without awful consequences. They wanted it stretched out over a longer period.

In one of these meetings, Sperling proposed the same target of $4 trillion but over thirteen or fourteen years. He believed his formula would show that the administration was serious, but it would not risk placing a drag on the economy or require harsh cuts in Medicare and Medicaid.

“If you make it twelve years, that would be better,” the president said.

He phrased it as a suggestion, but that was his way of giving an instruction. Twelve years it would be.

Obama began thinking about a speech.

THE LONGER THE BEHIND-THE-SCENES BUDGET TALKS DRAGGED on, the more antsy Obama became. He had thought the negotiations would take a few weeks, not more than a month. The Republicans seemed to be dragging it out. He wanted to address their assault on government spending; he was eager to contrast his vision of government with theirs. He also wanted to get on to the big discussion—about long-term deficits, the national debt, taxes, and investment.

We have to make this about values, he told his aides.

WITH A GOVERNMENT SHUTDOWN ALMOST A WEEK AWAY, THE negotiators on all sides picked up the pace. Lew was pushing for the deal to include reductions in mandatory programs, such as farm subsidies. Changes in mandatory programs—CHIMPS, in budget-wonk lingo—was a longtime congressional practice that often produced savings by reducing funding that might not actually occur. Resorting to CHIMPS allowed Lew to protect other parts of the budget and prevent a deep cut in the baseline for discretionary spending. He knew additional cuts were coming, and he didn’t want to let the Republicans lower that baseline too far in this first round.

On Monday, April 4—four days before the shutdown deadline—Boehner met with the Republican caucus to prepare his troops for the final days of battle. He told them he was upset about what had happened two weeks earlier, when fifty-four of them voted against him on the last short-term extension. He had felt abandoned, he said.

The chastising didn’t go over well with the Tea Partiers, some of whom complained that Boehner was being too emotional. But the speaker was acknowledging that he wasn’t able to discipline Republicans who were not willing to follow him into a deal.

At this raucous meeting, the speaker warned his comrades that they could end up the losers if the government shut down. “The Democrats think they benefit from a government shutdown. I agree,” he said. (White House aides were not sure of this.)

Veteran GOP lawmakers who had been around during the 1995 budget clash backed Boehner on this point. But Boehner’s radicals were not convinced a shutdown would hurt their party. Some argued it could help. They were willing—even eager—to take that risk.

Tea Partiers and other conservatives pressed Boehner to play hard—to stick with the $61 billion. They didn’t care about ancient history; they weren’t scared of Obama, or the media . . . or anything. They had not come to Washington to split the difference. They believed Obama and the Senate Democrats could be vilified for resisting what they saw as the overwhelming message of the past election: cut it all.

Boehner didn’t have full command of his troops. This meant Obama was negotiating with someone who might not be able to cover whatever check he wrote.

EARLIER THAT DAY, OBAMA’S REELECTION CAMPAIGN MADE IT official by zapping out an e-mail from “Barack” to millions of his supporters declaring that the president was filing papers to launch his 2012 reelection bid.

“We’ve always known that lasting change wouldn’t come quickly or easily,” the e-mail noted. “It never does.”

It was an odd day to make such an announcement. Not only was the president negotiating a compromise that would yield budget cuts guaranteed to enrage Democrats and progressives, but that day, Attorney General Eric Holder announced that Khalid Sheikh Mohammed, the 9/11 mastermind, and four alleged coconspirators would be tried before a military commission, not in a civilian court.

News reports said the military commission trial would likely occur at the Guantánamo detention facility—a reminder Obama had not made good on his campaign vow to close the prison that had come to symbolize the excesses of George W. Bush’s national security policies.

Liberals saw the president’s inability to shutter the prison as emblematic of a series of civil liberties letdowns. And with this declaration, the Obama administration was essentially raising a white flag on Gitmo.

Neither Obama nor Holder was happy about this. At a press conference, Holder said he still believed KSM should face judgment in a civilian court. (His plan to try KSM and the others in a federal court in New York City had been scuttled after local politicians raised a fuss.) He angrily decried members of Congress for passing legislation to block the trials of detained suspected terrorists in civilian courts.

“As the president has said, those unwise and unwarranted restrictions undermine our counterterrorism efforts and could harm our national security,” Holder declared.

The president and the attorney general had lost the battle of Gitmo. For that, Obama was accused by some of having broken his promise, which was not a fair criticism. He had not abandoned his pledge or flip-flopped. The Guantánamo episode was an unfortunate case study in politics trumping national security—in which Obama never figured out how to counter and overcome demagoguery from both parties.

IN HIS FIRST DAYS AS PRESIDENT, OBAMA HAD SIGNED AN EXECUTIVE order to shut down Gitmo within a year. It was hardly a controversial action. John McCain had called for the facility to be closed, and President Bush had publicly stated his desire to see it be shuttered.

“When we were drafting the executive order, we thought, maybe naively, that the Republicans were on board to close it down,” a senior administration official at the time recalled.

Then Gitmo became a political grenade. That spring—after the White House decided to start releasing seventeen Chinese Uighurs held at Gitmo, who had been swept up in Afghanistan but deemed not enemy combatants—Representative Frank Wolf, a Virginia Republican, protested, exclaiming this would “directly threaten the security of the American people.” (The first Uighurs were to be released, under strict conditions, in northern Virginia, into a Uighur community.)

Wolf’s complaint ignited another conservative assault on the president, with critics claiming Obama was intent on importing dangerous terrorists into the United States. Other Republicans enthusiastically jumped into this scare campaign, extending their grandstanding beyond the Uighurs’ case to cover Obama’s plans to relocate Gitmo detainees to one or more high-security facilities in the United States. (They forgot the inconvenient point that high-security prisons in the United States already held dozens of terrorists—none of whom had ever escaped to harm Granny down the street.)

Democrats, too, went along with this fact-free ride. In May 2009, Senate Democrats joined with Republicans to block $80 million to fund the closing of Guantánamo and to prohibit the administration from transferring Gitmo detainees to the United States except for trial. Reid told reporters he didn’t want terrorism suspects in the United States. And the White House hardly fought back.

“We were getting calls from the Hill: ‘Do you care about this?’ ” a White House official at the time recalled. “The signal received, if not sent, was that closing Gitmo was not a top priority.”

Greg Craig, the White House counsel who was leading the Gitmo effort, pressed on, looking for a home in the United States for the Gitmo detainees. The administration identified the maximum security Thomson Correctional Center, located in a rural area of northwestern Illinois, as the best spot. But to proceed, it needed funds. The Pentagon informed the White House it would not reprogram the $150 million or so to carry out the transfers without a congressional vote.

Winning such a vote—as recent events had demonstrated—would be tough, and at the time the legislative shop of the White House was obsessed with the president’s health care initiative.

“Axe kept getting polls showing that either the American people did not really care about this or were against it,” a White House official recalled. “We were losing the politics. And the politics had changed dramatically from before the election to after the executive order.”

The Gitmo promise might have been close to dead by the summer of 2009. But Pete Rouse spent months working on a plan under which the federal government would buy the Thomson center and move the Gitmo detainees—who were declining in number—to this site. (Ten Uighurs had been transferred to Palau and Bermuda.) Prisoners considered too difficult to prosecute—in some cases because they had previously been subjected to torture or harsh interrogations—or too dangerous to release would be held without trial indefinitely at Thomson, a policy that upset civil libertarians but which Obama had reluctantly defended.

“In order to close down Gitmo, Obama was okay with a small population of detainees being indefinitely held, as long as there was a review of the evidence and the law in these cases,” a senior Obama aide recalled.

Toward the end of 2009, White House officials were publicly acknowledging that they would miss the January 22 deadline for shutting down Gitmo, but they insisted progress was being made and Gitmo would close in the not-too-distant future. In mid-December, Obama signed a presidential memo ordering Gates and Holder to acquire the Thomson prison as the replacement for Guantánamo—though it was clear that fearmongering legislators in Congress would keep blocking this project. (Civil liberties groups also opposed the Thomson proposal, citing the continuation of indefinite detentions.)

The one-year anniversary of Obama’s promise came and went without official notice—though a Justice Department task force at that time concluded that about 50 of the 196 Gitmo detainees ought to be held indefinitely without trial under the laws of war (but with a revamped review process). “No one knew what to do with these people,” a senior Justice Department official said. “These cases had been fucked up by the Bush administration. There was no obvious solution.”

White House officials realized that conditions at Guantánamo had dramatically improved and were within international norms. But they were aware that the symbolic significance of shuttering Gitmo remained. Congressional Democrats, though, were telling White House aides they had zero interest in an election-year fight over Gitmo.

The House Armed Services Committee, a panel controlled by Democrats, voted unanimously in May 2010 to prohibit the administration from establishing any facility within the United States as a replacement for Gitmo. Weeks later, the New York Times reported the death knell for Obama’s Guantánamo promise: “Stymied by political opposition and focused on competing priorities, the Obama administration has sidelined efforts to close the Guantánamo prison, making it unlikely that President Obama will fulfill his promise to close it before his term ends in 2013.”

At the end of 2010, during the lame-duck rush of legislating, Congress went further and passed a measure barring the Pentagon from transferring Gitmo detainees to the United States for any reason—including prosecution. That seemed to be checkmate on Gitmo. The legislation doomed Holder’s uphill effort to bring KSM to justice in New York City.

“There was only so much Obama could do given the convergence of forces,” recalled a former White House official who worked on the issue. “We had spent hours and hours on this. We had explored options and options. Obama had a strong civil libertarian streak. But he was operating in a world of limited political options.”

Holder had little choice. If KSM were to be tried at all, it would have to be at Gitmo before a military commission. Obama and his aides had not been able to plot a path through the shoals of political demagoguery and institutional obstructionism.

In April 2011, announcing his surrender on the KSM trial, Holder blasted members of Congress for ginning up “needless controversy” and “scoring political points.” He added, “It is still our intention to close Guantánamo.” But what had once been a top-drawer Obama promise now seemed a hollow refrain. The simplistic view was that Obama had not kept his word. The actual story was he had failed to overcome fierce bipartisan opposition.

HOURS AFTER HOLDER’S STATEMENT, AS PART OF HIS REELECTION announcement, Obama held an evening conference call with hundreds of campaign volunteers and organizers. The president emphasized his accomplishments that played well with the progressive base: repealing Don’t Ask/Don’t Tell and winding down the war in Iraq. He also addressed liberals who might be disappointed about compromises on health care, Wall Street reform, and budget bills, and his failure to pass climate change legislation, enact immigration reform, and shut down Guantánamo.

“In a democracy,” the president observed, “change takes time. If there are some things we have not gotten done yet, it’s because we have not yet been able to mobilize the American people around these issues.”

He told his loyalists they “should never be defensive” about this administration’s record.

That day Holder’s throw-in-the-towel announcement was a vivid reminder of the gap between politics and governance, of the difficulties of implementing the best of intentions, and of the obvious fact that not every fight was winnable.

On Guantánamo, Washington politics and popular indifference had trampled Obama. With the unresolved budget battle before him, Obama was hoping to show he could at least fight to a decent draw.