The Diners Club's demise: Why Washington fails
This post originally appeared on Slate.
When we get in one of these budget fixes, Washington veterans, community fathers, Boy Scout troop leaders, and sensible people across the land wonder why a few adults can't just get into a room and hash out their differences. Everyone knows what the solutions are. There are a series of hotels in Washington that stay in business by hosting think-tank events where the same set of solutions are traded year after year. If only the politicians could get out of the daily political grinder, both sides could hammer out an agreement.
That is a comforting thought. It holds out the hope that good will, logic, and the national interest can still flower in the right circumstances. No matter how bleak things look, if conditions in the room are right, sweet reason will flow so that some progress might be made. To give up on this dream is to succumb to despair.
There is no sign that the conditions for this kind of meeting are going to appear anytime soon. On Wednesday, President Obama called congressional leaders around the polished wood of the Roosevelt Room's table for a meeting on the government shutdown and the looming breach of the debt ceiling. Nothing was accomplished but a shortening of the physical distance from which each side reiterated their immovable positions.
Perhaps it's hard to work anything out in a crisis atmosphere, but an experiment from this summer proves that the vision of an adults-only bipartisan meeting is no solution either. It can fail, too--and for all the same reasons previous budget negotiations have failed.
The myth of the wise men in a room is grounded in history. In 1990, Bush administration officials and congressional leaders traveled to Andrews Air Force Base, sat at a table, and worked out a budget agreement. Later, at a White House ceremony, President George H.W. Bush, Senate Minority Leader Bob Dole, and House Speaker Tom Foley stood together and announced the deal. To watch the C-SPAN footage of the event, where members of the two parties praise one another, feels so distant from today's politics they might as well be wearing buckles on their shoes.
Part of today's impasse results from that meeting. Among conservatives, it was seen as a great moment of apostasy, the moment President Bush gave up on his "no new taxes" pledge. House Minority Whip Newt Gingrich refused to go along with the deal, and generations of Tea Party conservatives have used this as a teaching moment. Sacrificing your principles to get a deal in divided government is a sin. When they come to Washington, they intone, they will not make the same mistake. That viewpoint is the dominant one controlling the Republican Party at the moment.
But it was not the viewpoint of those Republicans who made up the Diners Club, which met at the White House this summer. The group was a whittling down of the two dozen Republicans President Obama had met with in two dinners after his re-election. He was back on the schmooze, reaching out to members of Congress in the hopes that a few hours spent shuffling the fork around perfectly prepared baby carrots might form the basis of a new set of budget negotiations.
The White House wasn't just banking on the power of food. In March, Washington Post columnist Ezra Klein had written about a Republican lawmaker who seemed completely unaware of what the White House had been offering as changes to entitlements as a part of their budget negotiations with GOP leaders. Several White House officials reacted in wonder at the revelation in the article. How could any Republican be so misinformed about what the president was offering?
If the White House had better relations with Congress, maybe the lines of communication would be better. So the president decided to reach out. But this wasn't just to schmooze. By having the dinners and participating in outreach, Obama hoped to create direct inroads to these Republicans to make his policy case. In the Klein article, the GOP senator seemed to be open to a budget deal based on the idea that the president would agree to entitlement changes in exchange for Republican agreement on revenue generated by tax increases.
It was in this spirit that the Diners Club was formed. Republican Sens. John McCain, Lindsey Graham, Kelly Ayotte, Bob Corker, Johnny Isakson, Dan Coats, Ron Johnson, and John Hoeven participated. All had either publicly or privately said they were open to raising revenue if the president would back entitlement reforms. Over the summer, and intensifying in August, the group of eight met several times at the White House with the president's chief of staff Denis McDonough, the director of the Office of Management and Budget Sylvia Mathews Burwell, and presidential congressional liaison Rob Nabors. Their goal was to revive the hunt for a grand bargain--Washington's Bigfoot--where significant deficit reduction is reached through a combination of restructuring of entitlements and revenue through increased taxes.
It did represent a new era in Obama's outreach to Congress. The man who gets most of the credit is McDonough. "He is the best chief of staff the president has had," says Isakson, a 13-year veteran of Congress. "I've had more interaction with Denis McDonough than any other in my years in Congress." He's not the only one. Many Republican senators say the same thing.
But despite the goodwill, the summer conversations broke down over thoroughly predictable differences. Though the president had offered some entitlement changes in his budget, they weren't enough to win serious concessions on revenue from GOP senators. The party had just agreed to a tax increase as a part of the fiscal cliff negotiations at the beginning of the new year. If they were going to cave again on taxes--even one where the concession was hidden in the guise of fundamental tax reform--the president would have to agree to more changes to entitlements. He would have to go big; Republican senators suggested he should embrace Medicare changes of the kind offered in the old bipartisan Domenici-Rivlin plan, which sought to drive down costs by creating greater competition.
The president joined one of the meetings, and one senator in attendance said he seemed genuinely open to finding a way to offer more on entitlements, though he talked about how hard that would be for his Democratic base. He also mused about ways in which they could find enough revenue that it would justify doing something big on entitlements. He was essentially colluding with Republicans on how their party could say yes to revenue in ways that would make it an easier sell to the GOP base.
But then the script becomes familiar again. Republican senators say the president's aides got stingy in talks. There was no more room on entitlements other than what the president had offered in his budget. They wouldn't entertain the broader Medicare cuts based on the Domenici-Rivlin compromise. They also demanded that all revenues come from tax increases. For their part, White House aides say Republicans wouldn't offer any specific proposals on tax revenue that represented a true offering from their side. Nonsense, say Republicans--openness to revenues through tax increases is what defined membership in the Diners Club in the first place. Plus, they had discussed specific kinds of revenue ideas with the president when he visited.
For a time the group tried to shrink the deal into something more manageable. If the president agreed to the entitlement cuts he'd already outlined in his budget, they could wipe out about $500 billion of the cuts in discretionary spending scheduled to take place in the next several years as a part of sequestration. White House aides said that wasn't a real offer because Republicans weren't really giving anything. Their side wanted to do away with sequestration, too. The president could only drive his party toward those entitlement cuts if he had something to show for it from Republicans on raising revenue.
The members of the Diners Club had carefully avoided being called a "gang," because they didn't want the headaches that would come if they were seen as negotiating for the party. They certainly weren't a "supercommittee," and they didn't have the star power of the Simpson-Bowles commission. But the quiet summer effort failed for essentially the same reasons that those budget agreements failed: a dispute over whether one side had gone far enough to justify the concessions by the other. The problem with deals worked out in closed-door rooms is that they have to live outside the room when participants try to sell them to their parties.
At the end of August, the Diners Club disbanded. The final meeting included talk about the coming crisis in Syria. Sen. Ron Johnson of Wisconsin offered one final deal to McDonough. He'd agree to an increase in the debt limit and a continuing budget resolution if the president would delay implementation of Obamacare for a year. The meetings that had once started out on a grand scale and which had for a time discussed 30-year budget projections wound up where things have stalled today.
