In June, the negotiators reached a provisional agreement with Republicans on more than $1 trillion in cuts, and the Obama contingent had begun to believe a much larger deal was in sight. Such a deal, they assumed, would involve Democrats agreeing to modest Medicare cuts in exchange for eliminating a few narrow tax breaks, like those benefiting oil companies and corporate jet owners. Biden and Sperling and Lew were pretty enthusiastic about where this is going, recalls one White House official familiar with the negotiations.
But Obama was skeptical. When his negotiators briefed him on the possible bargain, he turned to Nancy Ann DeParle, the health care expert who was his deputy chief of staff, and asked how much the proposed Medicare cuts would cost the average senior. DeParle said it would mean an increase of a few hundred dollars each year. The president then asked his negotiators what someone in his income bracket would have to fork over in tax increases as a result of the deal they were working on. The answer was nothing, said a White House official at the meeting. Unless you own a corporate jet or youre an oil company, youre not going to have to pay anything more. Obama frowned. How can I ask seniors to pay $500 more and I dont have to pay a nickel? I cant do that. The president instructed his negotiators to return to the bargaining table and insist on more sacrifice from the wealthy.
The problem was that Obamas team had actually presented an optimistic view of what was possiblewhat it had assumed would be the best-case scenario. The negotiators hadnt actually broached the idea of tax hikes with Cantor and Kyl in any detail, and the two Republicans certainly hadnt said they would be open to them. Not even meager hikes, not even in return for a longstanding conservative goal like scaling back Medicare. In fact, Cantor and Kyl had waved off Democratic efforts to pin them down on the tax question.