Budget deal shows limits of GOP leverage against Obama

Reporting from Washington —  In a political era more known for conflict than compromise, the two-year budget deal that retiring Speaker John A. Boehner reached with President Obama came as something of a surprise.

But it shouldn’t have.

Ever since Obama and Congress agreed to deep “sequester” cuts to end the first standoff with Boehner’s Republican House in 2011, almost all sides have tried to undo them.

With Obama signing the budget package into law, lawmakers and the White House have succeeded once again in staving off the harshest reductions and averting a credit default by raising the debt ceiling.

For Boehner, who leaves office Friday, his chief regret was the failure to reach a broader “grand bargain” to put the government’s fiscal house in order.

“Not getting the budget deal with President Obama still stings,” Boehner said, in his office at the Capitol, smoking cigarettes during an exit interview with reporters.

At $80 billion, this latest accord is modest by Washington budget standards -- and compared to what could have been during those dramatic days in late 2012, when the new speaker and still-new president tried to reach a mammoth $5 trillion deal to cut spending, raise tax revenue and push down the debt load.

But Washington has lost its appetite to go big and, as the past six weeks of plodding budget talks show, it has increasingly lost its capacity to even go small.

“It’s not even a deal, it’s an agreement,” said Minority Leader Nancy Pelosi the Democrat from San Francisco. “A deal is you give me this I’ll give you that. It wasn’t that at all.”

Even in this more limited scope, shepherding the package through as Boehner’s final legislative act was not easy.

And up until last Thursday, it appeared a deal may not even happen.

That morning, Boehner and Senate Majority Leader Mitch McConnell held a conference call with Obama.

Talks had been underway since mid-September, and they were making one last push to extract something -- almost anything -- for their votes to raise the debt limit.

But it was clear the White House, backed by Democrats in Congress, would not budge.

The president told the men they had a choice: Either line up the votes to raise the debt ceiling or renew their commitment a budget deal that would include it, according to a senior administration official granted anonymity to discuss the private talks.

“President Obama knew the future of the country was dependent on his hanging strong and firm, and not negotiating on the debt limit,” said Senate Minority Leader Harry Reid (D-Nev.)

“It would be terrible for future presidents to have to go through this process every time, and he set the tone. He has set the tone for future presidents,” Reid said.

Denying Republicans of leverage on the debt limit removed the best tool Boehner and McConnell have had in forcing Obama to the negotiating table.

It was the need to raise the debt limit or risk default in 2011, Boehner’s first year as speaker, that led to first standoff between the administration and the new House majority.

The showdown created the Boehner Rule: $1 of spending cuts for every $1 of new debt authority to pay the existing bills.

Ultimately, both sides agreed to the “sequester” cuts that promised reductions of more than $1 trillion over the next decade.

But those cuts never really materialized. Just two years ago, the “sequester” was partly reversed in a two-year deal negotiated by Rep. Paul Ryan (D-Wisc.). Ryan has replaced Boehner as the new speaker.

This new deal reverses the cuts again for the remainder of this year and next.

After that Thursday call, GOP leaders knew they didn’t have enough votes to raise the debt limit on their own -- not even 30 House Republicans would join Democrats without concessions to pass it. But they hoped to bring as many as 100 House Republicans to a broader budget deal.

By the next morning, Boehner was “making strong overtures to finish the package,” according to a senior Democratic aide familiar with the process.

Staff worked through the weekend to wrap it up. The package reverses $40 billion of “sequester” cuts to the Pentagon, and an equal amount to other domestic accounts.

The agreement also prevents a premium rate hike for seniors on Medicare, and halts looming cuts to beneficiaries of Social Security Disability.

And it raised the debt limit through March 2017, well after Obama is expected to be gone from the White House.

Republicans, who control both chambers of Congress, voted en masse against it this week.

“Republican majorities have just give President Obama a diamond-encrusted, glow-in-the-dark AmEx card,” said Sen. Ted Cruz (R-Texas), the presidential candidate, who joined another White House hopeful, Sen. Rand Paul (R-Ky.) in a midnight-hour filibuster to try to block the deal early Friday morning.

In the blistering screed, Cruz called McConnell the “most effective Democratic leader” for consenting to the agreement.

But for Boehner and McConnell, the days of extracting cuts from the White House in exchange for a debt limit appear to have passed.

As have the heady demands to reduce spending because, as the vote also showed, enough of their own GOP defense hawks and mainstream Republicans want to prevent those hits.

“I came here to fight for a smaller, less costly and more accountable government,” Boehner told Fox’s America’s Newsroom on Friday morning, as the bill was heading to the White House for Obama’s signature. “But I began to realize over the years that there’s no winning this fight. It’s going to be this constant struggle over how big should Washington be?”

For the latest from Washington and the 2016 campaigns follow @LisaMascaro and @Cparsons

For more, go to www.latimes.com/politics

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