Vice-President Joe Biden: Where the hell are you?

Jason Zengerle: I’m in Chapel Hill, North Carolina.
That’s a nice spot. I was just down there. So what can I do for you?

I was hoping to talk to you a little bit about the relationship you’ve had with Congress during the Obama administration and the role you’ve played in terms of being a back channel to Congress — in a couple of episodes in particular, namely, the debt ceiling and the fiscal-cliff negotiations.
Well, my relationship with Congress down here was no different from my relationship with Congress for 36 years in the Senate. I mean that sincerely. Knowing of you, you’ve done your homework, and my guess is you haven’t found any Republican who’s bad-mouthed me about not keeping my word, not being someone you can negotiate with, not being someone who is going to embarrass the person you’re negotiating with. It’s because I learned a lesson really early on. Senator Mansfield, he said, “Joe, it’s always appropriate to question another man or woman’s judgment. It’s never appropriate to question their motive, because you simply don’t know what their motive is.” And it’s a rule I’ve abided by my entire career — it’s kind of how I was raised as well. The second-biggest lesson I learned in terms of working and negotiating is that you gotta know more than the other guy, substantively. Those two things are things that guided my whole career. And nothing’s changed down here.

How have they guided you in particular episodes during the last eight years? Were there instances during the fiscal-cliff or debt-ceiling talks where you felt like you were operating from an advantage in terms of you just knew more?
I’m not in any way denigrating the depth of knowledge of the people I was negotiating with. Eric Cantor’s a very smart, very knowledgeable guy and a decent man. John Boehner’s a decent guy and was informed. Mitch McConnell knows what he speaks of, and he’s the best counter in the Senate. The votes he tells you he has, he has. And they had first-rate staffs. I had an awful lot of — I literally probably had a couple hundred hours of private meetings at my home with them, without it being announced to their people or anybody else, though I always informed the president. I got carte blanche from the president, once he and I agreed what the goal was.

The great advantage I had with the president is, substantively, we’ve agreed on everything. Where we disagree occasionally is on tactics, and one reason he asked me to do the job is he wanted me to help govern. He knew that after 35 years, 36 years, you’d have to be pretty stupid not to know the House and Senate. So when I negotiate I don’t have to check back, I just know what the objective is, and I have carte blanche to move. One of the problems, though, is that our Republican colleagues are all good, honorable guys, the guys I mentioned. But it’s that old bad joke, what happens when the dog catches the bus? Well, they caught the bus in 2010, they got this majority in the House, and these are not your father’s Republicans. Some of them, on occasion, at the time, didn’t want their caucuses to know they were negotiating with me, although it was more comfortable to negotiate with me than with the president because there was this animus from some of the new guys about the president that was just unfounded. We spent an awful lot of time in detailed, detailed discussions about how to deal with everything from the potential for a government shutdown in 2010 to the budget deal in 2011 to the fiscal cliff in 2012 and beyond. And it was always good, because dealing with McConnell and dealing with Cantor, they knew what they were talking about. It was explicit, specific, not generic, none of this talk about, well, we support generically cutting taxes, or we think we should whatever. I don’t know how many days of meetings we had, five-, six-, seven-hour meetings, not a single thing leaked out of those discussions and we went through the budget literally line by line — where would they be willing to raise revenue, could they, for example, raise revenue by eliminating the tax cuts for small aircraft? I mean, it got that detailed.

Certainly the president and McConnell and Cantor seemed to have much chillier relations than you had with them. Did that put you in a difficult spot in any way?
Not at all. I mean, I worked with these guys for 10, 20, 30 years, and the president had not. He’d been there for a total of four years, two years campaigning for president. And so it shouldn’t have been a surprise, and it wasn’t to him.

Our objective was to keep the recovery going. If at any point we had not been able to make a deal, there is no possibility, I think most economists would agree, that the 2015 Census would point out the fastest growth in household income — that just wouldn’t have happened. Imagine, had we let all the Bush tax cuts expire in 2010, which a lot of people wanted us to do, we would have had an increase in taxes at a time when we’re trying to stimulate the economy. In addition to that, we would have lost the payroll-tax cut, which was keeping people afloat. It would have been a disaster. Our objective throughout was how to get to the point where we are now. How do you keep this going? And I think the proof in the pudding, as they say, is the eating. We’re going 20 times as fast as Europe, a hundred times faster than Japan. They took a totally different route than we did. And here we are, we’re in a situation where middle-class tax cuts are tied in, we’ve increased the tax code on the wealthy, generating $660 billion in additional revenue, giving us a whole hell of a lot of headroom. We did not default. We raised the debt ceiling, making sure that we could not be held hostage through the next election.

Of course, every one of these deals, the Republican leaders I was dealing with, we shook hands and we had a deal, and then somewhere between seven hours and seven days later I’d get a phone call saying, “Joe, I can’t do it, my caucus will throw me out. Joe, I can’t get it done.” I mean on big items.

What happened?
You may remember, we got downgraded and I was supposed to have gone to China because then-President Hu and President Obama had agreed early in the year at the state dinner in China that then-Vice-President Xi and I would get to know one another — by the way, my view is, all politics is personal, including international relations. But I had to postpone going by what I think it was roughly two weeks. It was causing problems, my postponing, because we had agreed to this extensive program in China. And so we got downgraded and I left two days later, and President Hu — it was a nice tactic on their part — had set up a meeting in the Great Hall of the People and with me sitting in the usual setup, with me in a high-backed chair and President Hu and then all his team in five, six, seven rows in chairs to the right. I had a lot of you guys, all the financial reporters, paying to fly to China, because Biden was going to get his comeuppance, man, the United States was downgraded for the first time. I walked into the Great Hall and Hu was being very, very smart. He looked and he said to me, he said — I’m paraphrasing — “You know, we think America will come back. We don’t think it’s over for you. And we want to be able to help, but we want to be sure that our investments in your Treasury bills are secure. Can you tell me, how will you deal with your entitlement programs?” And you can check on the record on this, but to short-circuit it I said, “Oh, Mr. President, I’ve read in your press, translated for me, and in our press that shortly after we were downgraded you went out and bought, I don’t know, five, six, seven billion dollars’ worth of T-bills. You’re really being criticized, and I know you’re trying to help us, but, you know, if I were you I wouldn’t buy any more of our T-bills.” God, I thought our economists were going to fall of their chairs. I said, “No, really, we don’t need you, and I don’t want you to have to put yourself out like that.” I said, “Secondly, it’s true you own some small amount of our debt, that’s true, but the American people own 68 percent of it. Since the Depression, America’s never never never ever defaulted, and it’s never been a good bet to bet against America. We have the largest economy in the world. We have a per-capita GDP that’s four times as large as yours. I think it’s five times, Mr. President. And by the way, our entitlement programs are a political problem. We can solve that.” But I said, “My God, your situation, I feel so bad for you.”

You may remember I got harshly criticized at home during the campaign for this, but I said, “I’m not going to question your one-child policy. You’re in a situation where you have a real, real problem, and I don’t know how you’re going to handle it. You’re in a situation where, if I’m not mistaken, it’s for every one person working you’re going to have four people out there that aren’t working. My God, how are you going to do that? If there’s anything we can do to help, we’d be happy to help you.” That ended the goddamn discussion.

Amazing.
But the point is that everything was sped up, and because of the recalcitrance of the new Republicans, not the leadership, we had great difficulty keeping this recovery going. Had any one of these crises ended up unresolved, or had we defaulted, or had we closed … Remember, in 2011 people were talking about green sprouts — we were just starting to move. Imagine! Just imagine if we hadn’t worked out a deal. So there was a method to our madness, and it wasn’t about compromise. It was about what is needed to keep us on track to get to the point where we are now.

In your time in the Vice-President’s office, is there one single policy change that you were a part of that you think history will judge mattered more than how it was covered at the time?
There’s a lot of them. But one of the reasons why the president has confidence in me is I never talk about where we differed. The deal the president and I made was, when he asked did I have any conditions for coming on as Vice-President, I said, I want your commitment, Mr. President, that I will literally be the last guy in the room on every major decision. Because I’ve been around for seven presidents before, and the vice-president should never publicly, even in front of senior staff, be seen as being fundamentally at odds with the president.

When I had strong disagreements, I reserved that for the Oval Office. We have raised our voice with one another, we have had real disagreements, and I must say, I believe that we’ll see what he writes, but the record will show I had a lot more influence on getting the position I wanted. I strongly opposed going into Libya. I strongly opposed the moving from counterterrorism and counterinsurgency under Petraeus in Afghanistan. It turned out that, if you look, I think I’ve been right.

What about domestically?
It’s somewhat celebrated now, and I can talk about it because it’s public. One of two things I told the president was, I’m not wearing any funny hats and I’m not changing my brand. And I told him all along that my view on LGBT rights and gay marriage — I would not say anything, but if I was asked directly I was going to answer — I wasn’t going to talk about that I was “evolving” or anything like that. So when I was asked on Meet the Press, I said I am perfectly comfortable with that. A lot of the staff was apoplectic, but I walked into the Oval Office on Monday and the president got up from behind the desk, a big grin on his face, and came over and gave me a hug and he said, “You told me you weren’t going to change your brand.”

He has a great line when friends ask him, “What’s it like with Joe?” He says, “It’s like an older brother–younger brother. We make up for each other’s shortcomings.” Well, he makes up for a lot more of my shortcomings than I do his.

What else do you feel you really pushed for?
I have had a firm, firm, firm view that we should be doing a great deal more to deal with the anxieties of the middle class, and by that I mean couples making between $70,000 and $120,000. They’re struggling, man. They’re struggling. And in the last two years, I’ve been a very, very strong proponent of fundamental changes in the tax code. If you’ve noticed what we’ve been proposing for the last two years, I’ve been arguing for seven years that the idea that there are now $1.3 trillion of tax expenditures in loopholes, is bizarre, absolutely bizarre. I was pushing free college education and community college a long time ago, too. My argument is we should stop apologizing for any of this and we should lay out clearly how we pay for it. Base the argument on productivity and growth.

Let me give you an example. The president laid it out in detail how to pay for free community college. Every model shows that if you increase free community college to the 9 million people in community college, it would increase growth in the GDP by 2 percent plus. Now, how do you get $6 billion a year, $60 billion over ten? People say, well, God, how do you pay for it? Well, when we argue with Republicans now, it’s by saying, If you’re against this, you guys aren’t for productivity and growth, you guys are for slowing growth. We can increase growth by two-tenths of one percent if we do this, and guess what, all you have to do is eliminate stepped-up bases.

Stepped-up bases?
If you’re a millionaire and you buy a million bucks’ worth of stock and it accrues in value to $2 million, if you sell it, you have to pay capital-gains tax on a million dollars. But if, on your way to sell it, you drop dead and you leave it to your son and he sells it, he pays no tax! Well, there’s only three- to four-tenths of one percent of the whole population who benefits from that, they’re already wealthy, they’re good people, it’s no punishment, and there’s not a single scintilla of evidence that this tax loophole generates economic growth or productivity.

Ultimately, there’s only one reason for tax expenditures: promote a social good and generate rewards for people taking risks, or generate growth. I talked about it as a senator, and since I’ve gotten here — we should not at all be reluctant to say to Wall Street or Silicon Valley or anyone else, Look, guys, you gotta pay your fair share. There used to be a basic bargain in this country. You contribute to the well-being of the enterprise you work for, you get the benefit. Well, hell, the president now is talking about that, and he’s always believed it, but what I’ve been hollering about is, we need to change the corporate culture.

In what way?
From short-termism to long-termism. Think about what we’re doing: Long-term gain is a year. You have to have every four months, you have to project profit. What’s the result? If the result is between 2003 and 2012, I think the 449 companies that stayed in the S&P 500, they made $2.4 trillion, and that’s great. What did they do with the profit? Fifty-four percent of it they bought back their own stock. Thirty-seven percent of it they gave dividends to their shareholders. Leaving 9 percent for things like expansion, wages, modernization, pay raises, employment. C’mon, man. And they all know it, by the way. They all know it.

That’s interesting. Well, thank you so much for your time. I really appreciate it. It was nice to be able to talk to you about this.
You know what you forced me to do?

What?
You forced me to do what’s hard to do: to go back and remember negotiations. I dug up a notebook I had from the 2011 negotiations and I didn’t realize I actually kept pretty good notes. But anyway, I miss Eric Cantor.

Yeah, I was talking to one of his guys the other day, and his guy said you had reached out to him that day.
He is a truly decent guy. He is smart as hell. I kid him, I say that he’s just too damned conservative. It’s just like I’m good friends with Paul Ryan. I called him — I can say it now — to encourage him to take the job, but I kid him, I say his biggest problem is that he read too much Ayn Rand. They’re good, decent people, trying to get something done, but they’re dealing with some real … You know what it reminds me of? I got elected in ’72, became friends with George McGovern. The McGovern wing of the party controlled the party, controlled the apparatus, and we had a lot of folks that I really liked that were absolute purists. It was like, give no quarter. What’s happened to the Republicans, they’re on the opposite end of the spectrum, even a little more … I don’t want to use an adjective … anyway, a little more certain of their uncertain views. You have to remember, in the 2012 race they asked me, if I could have any one wish, what would it be? And I said, to have a Republican Party. It was considered a gaffe — it was no gaffe. I genuinely meant it. Think about it. Nobody can speak for the Republican Party. Nobody. So with whom do you negotiate?