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Who killed the debt talks?


That question has been asked numerous times since President Obama and House Speaker John Boehner tried, unsuccessfully, to reach a "grand bargain" last July that would have raised the debt ceiling, reduced the deficit, and raised revenues.

The White House and Democrats point their finger at Boehner, saying he was unable to deliver Republican votes on a compromise where both sides would have to swallow something uncomfortable (tax hikes for Republicans, entitlement cuts for Democrats).

By contrast, House Republicans counter that Obama and the White House moved the goal posts, which forced them to break off the talks.

Earlier this month, the Washington Post advanced the moving-the-goal-post argument by noting that Obama and Boehner had agreed -- in principle -- on raising $800 billion in additional revenue. But the White House upped the ante after the bipartisan "Gang of Six" produced their outline, which contained significantly more revenue.

Inside the White House, the offer reflected the new political reality shaped by the Gang of Six. In light of that farther-reaching proposal, White House officials worried that the deal under discussion with Boehner would meet resistance, particularly among Obama’s Democratic supporters. Higher taxes explicitly targeted toward the wealthy offered an element of fairness, in the White House view, and a way to sweeten any deal for the Democratic base.

So in that telling, Boehner walked away from his talks with Obama -- on Friday, July 22 -- because he could no longer trust the White House.

But in a just-published article, Matt Bai of the New York Times Magazine adds some additional details. One, Boehner continued to stay at the negotiating table for two days after Obama "moved the goal posts."

It’s a clean story of a man standing by his conservative principles. And yet the additional revenue wasn’t, strictly speaking, a nonstarter. After all, Boehner wanted a deal badly enough to stay at the table for 48 hours after Obama “moved the goal posts,” which casts doubt on his claim that this breach of trust was an obvious dealbreaker. And at some point that Thursday, Boehner and his most senior aides at least entertained what would have been an astounding counteroffer to the president.

And two, Boehner only decided to walk away from the negotiations after House Majority Leader Eric Cantor rejected that counteroffer.

What happened, instead, based on extensive reporting, was this: Boehner raised the possibility of his counteroffer with Cantor on that Thursday afternoon, and Cantor dismissed the suggestion out of hand. He had always warned that the White House couldn’t be trusted and would come back for more, and Obama’s reversal on the revenue number had vindicated that view. Cantor made it clear he wasn’t going to support any more counteroffers. He was pretty sure the caucus wouldn’t either. No longer was Cantor content to be the skeptic in the room. He was now certain that the grand bargain was a practical impossibility.

Bai goes on to make this conclusion in his piece: All throughout the negotiations, Obama had demonstrated his ability to get Democrats (like Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi) to accept the "grand bargain," albeit reluctantly. But Boehner couldn't.

And yet, in the end, while both leaders had profound reservations about a grand bargain that would threaten their parties’ priorities, what’s undeniable, despite all the furious efforts to peddle a different story, is that Obama managed to persuade his closest allies to sign off on what he wanted them to do, and Boehner didn’t, or couldn't. While Democratic leaders were willing to swallow either a deal with more revenue or a deal with less, Boehner’s theoretical counteroffer, which probably reflected what he would have done if empowered to act alone, never even got a hearing from his leadership team.