The All-Night King of the Capital

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POLITICS MARCH 27, 2013

The All-Night King of the Capital Learning power politics from Gene Sperling

On March 13, before heading to Capitol Hill to talk deficit reduction with House Republicans, President Barack Obama, as is his custom before such showdowns, met with his economic team, including National Economic Council head Gene Sperling. The NEC, a Clinton-era innovation, is supposed to serve as an organizing body for the government’s other economic agencies, like Treasury and the budget office. In the hands of Sperling, who worked at the NEC at its inception and has been its director for longer than anyone else, the council has become half think tank, half coach’s corner. Sperling and his team of wonks find economic policies, incubate them, game them out, and present them to the president.

This has made Sperling a ubiquitous figure in the economic policy debates and fiscal crises of recent years. Sperling is the one prepping the president for TV appearances. He’s often dispatched to brief congressional Democrats, as well as the chief policy staffer for Republican House Speaker John Boehner, on the White House line. During the fiscal cliff talks, Vice President Joe Biden was accompanied on his forays to the Senate by Sperling, the human cheat sheet. The only times he hasn’t been in the room is when it was just Obama and House Speaker John Boehner.

It’s an unexpected turn, given that Sperling barely made it into the administration in the first place. A veteran of Bill Clinton’s team from the campaign days in Little Rock, Sperling had worked on Hillary Clinton’s presidential run, and when Obama won, Sperling was left without a job in the administration. Larry Summers, an old friend and colleague, was named head of the NEC, and he urged Timothy Geithner, the new treasury secretary, to find Sperling a position. Geithner made him a counselor. For someone with Sperling’s experience, it was, at best, a bit part.

When he started at Treasury, Sperling was temporarily given a suite that had once served as Andrew Johnson’s Oval Office during the months that it took Mary Todd Lincoln to move out of the White House. It was the peak of the financial crisis and Sperling’s deputies slept on the 150-year-old couches. One Saturday morning, an informal tour stumbled upon Sperling and his team cranking out a PowerPoint presentation amidst the flotsam of an all-nighter. “This is a historic office!” the guide exclaimed. “Well, it’s a historic crisis,” Sperling reportedly shot back.

This kind of behavior didn’t immediately endear him to his new bosses. Obama’s inner circle is obsessively orderly. Sperling, as Clintonian as they come, is rambling and intensely inefficient. He is compulsively late; meetings that were scheduled to run for half an hour go three times longer. (“The unit of productivity per unit of work is probably lower” than the ideal, a former staffer told me.) “Gene kind of fit in more on Clinton time,” says a onetime colleague. “This ‘you better be on time’ or ‘the meeting’s going to end in fifteen minutes’ kind of shop is not quite as aligned with his demeanor.” The colleague adds, “It took the Obama people a while to warm up to him.”

But Sperling made himself indispensable, mostly by never going away. “He was constantly over in the West Wing. He hustled,” says Peter Orszag, Obama’s first budget director. “If there wasn’t a spare desk at the White House, he would just sit on the floor and work,” recalls Bob Greenstein, who runs the Center on Budget and Policy Priorities. “He either didn’t have pride or swallowed his pride and took it on, but ... Gene started to become one of the central players even without having the portfolio to be one.”

At Treasury, Sperling pushed progressive policies that, in the middle of a nine-alarm financial meltdown, were not high on the list of priorities. He pushed anyway, “in his usual, relentless way,” says Geithner.

“Gene was holding ten p.m. calls every night on executive compensation at a time when most people were worried, is the financial system going to fail?” says one former staffer. It made Sperling the target of some derision, but he got his way. One of his pet causes became the Small Business Jobs Act, a combination of tax cuts and loans for small enterprises, which Obama signed into law in 2010. In 2009, he also proposed two measures to regulate how companies pay their executives. The extension of unemployment benefits in 2010 was Sperling’s doing. And the American Jobs Act of 2011 (which would have provided relief for Americans hit hardest by the crisis but which ultimately failed to clear Congress) was all Sperling, says Geithner. “He really was the main architect of the American Jobs Act,” Geithner explains. “It was big, and it was designed very creatively.” “Gene was prescient,” says the staffer. “You look back and you say, ‘Geez, this is stuff we’re still getting hammered on, and, were it not for Gene, we would be in a way worse place.’”

Most of the stars of Obama’s founding economic team have now departed, but Sperling is still there. He has managed to outlast them by, well, outlasting them. During the 2008 transition, Summers recalls haggling with Sperling over a tuition tax credit in the planned stimulus package. Sperling wanted to make the credit refundable, while Summers, the man with the real job in theadministration, disagreed: There were simply too many refundable tax credits already. “It was ten at night, and he wouldn’t let me leave!” says Summers.


Pete Souza/PSG/Newscom


After over an hour of arguing, Summers declared his decision final and went home. Sperling stayed late into the night drafting the memo that would recommend the best policy to the president. By the time Summers came in the next morning, the tax credit had become refundable. Geithner remembers a furious Summers calling to demand that he rein in his counselor. “‘It’s just unfair, he stays up later!’” Geithner recalls Summers saying. “He would just outlast everybody; he would just fight harder, longer. He just wore everybody down.” (Then–Chief of Staff Rahm Emanuel had to take Sperling aside to remind him that economic policy isn’t made by staying awake the longest.) “He has an awesome tenacity advocating for people who are vulnerable,” Summers told me. “It’s frustrating for lesser mortals.”

The overwhelming power of this political bulldozer is folded, rather messily, into a five-foot-five frame, with graying hair and a receding hairline. It’s hard to quote Sperling, because he rarely finishes a sentence, or even a clause. His is not one of those brains that produces speech in essayistic paragraphs or recounts events in chronological order. There’s a disarming and goofy informality about him. I arrived for our interview on time—“That was silly of you,” said the West Wing receptionist—and about an hour later, was ushered in to meet Sperling, who was pacing in and out of his office and joshing with his mostly male staffers.

In the boyish world of economic policy, his quirks have made him the target of elaborate pranks. Geithner once sent a friend, posing as a Government Accountability Office inspector, to Sperling’s Treasury office to tell his assistant that the gigantic conference table he used for his crowded, marathon brainstorming sessions was too big and didn’t meet government specifications.

Yet Sperling has also earned his colleagues’ respect, because, as odd as it sounds to say this in Washington, a big part of his drive comes from the fact that he truly believes he is making the world a more just place. Born to a progressive family in Ann Arbor—his father was a lawyer who won several constitutional cases; his mother was an education reformer—Sperling says it was instilled in him that Jews, as people who were once oppressed, had an obligation to ease the burden of others. “He’s clearly attracted to power, to being part of that big process,” says a colleague from the Clinton years. “But a lot of people get inside the room and forget what it’s like outside the room, and he’s never forgotten.” Bob Woodward, in his book on Clinton’s presidency, The Agenda, describes Sperling, then–NEC deputy director, thanking his staff for helping preserve Clinton’s progressive policies during the brutal 1993 budget negotiations. He described the millions of working poor who would be lifted above the poverty line and the millions of children who would get hunger relief. Woodward noted, “Tears came to some eyes.”

But Sperling also thrives on the gritty business of policy-making. He recounts battles over budget line items like a kid telling a spooky story, flashlight propped under his chin. One episode in which his relentlessness paid off came in 1997, during a showdown with Newt Gingrich. Basically, knowing that Gingrich would have a limited appetite for tax credits for the working poor, Sperling and his NEC team figured out a way to combine a child tax credit with the earned income tax credit, boosting the amount of money eligible families would receive. Unfortunately, Gingrich caught on and Erskine Bowles, then the White House chief of staff, was sent to repair the damage. He came back with a counteroffer from Gingrich limiting the stacking of the tax credits. Sperling, armed with a sheaf of charts detailing the impact of every possible outcome, protested: It was going to take serious money out of millions of pockets. Bowles pleaded with him not to scuttle the whole deal over a single policy initiative. But Sperling held the line, and Gingrich, infuriated, walked out. Later, however, he sent over some autographed copies of his latest book, and the two sides started talking again. In the end, Sperling and the working poor got their stackable credits. “Whether you’ve prepared enough to know the impact of every detail and potential option can make the difference between whether you’ve used your spot at the table to help or let down millions of people who are relying on you to look out for them,” Sperling told me.

Back then, Sperling was able to work with Gingrich and the House GOP, even when they bitterly disagreed. During the 1997 budget clashes, Sperling sparred constantly with then–House Budget Committee Chairman John Kasich. But after Kasich became governor of Ohio in 2011, he could still call up Sperling, who, with help from Valerie Jarrett, was able to find a way to help Ohio expand Medicaid. “I do not support Obamacare, but I do support the expansion of Medicaid. I wanted to get it done but not under these conditions,” Kasich told me. “We have the same goal. Once you make up your mind that you want to reach a goal, you think of ways to get there.”

Stories like these are rare. Washington and the Republican Party have changed, and Sperling now finds himself dealing with an opponent who cannot be exhausted into submission. During the fiscal cliff talks, Sperling was amazed that House Republicans never made it to the stage of negotiations when both parties, in their best dramatic bargaining voices, announced their final offers, take it or leave it. Instead, the House Republicans just walked away. Here he reprises his familiar joke about Boehner and Eric Cantor: “I wouldn’t want to date them,” Sperling says. “Because they don’t say, ‘Can we talk?’ They don’t say, ‘Can we take a break? Can we see other people? Can we go to a therapist?’ They’re just gone one day!” The only explanation he can come up with is that Republicans don’t want any deal at all, and they never make a final offer for fear that Democrats might actually take it.

Now, Sperling senses a spitefulness within the GOP that wasn’t there even with his arch nemesis, Gingrich. Newt was mean, but he could count votes and he could deliver. He was also willing to work with Democrats on the less flashy stuff. He was vicious in the big fights, yet there were feel-good bipartisan measures, like a veterans’ tax credit, on which they could collaborate. There’s a bemused sense around Sperling’s office that, if Barack Obama is for chocolate cake, the Republicans would be against chocolate cake, too.

It’s all harder these days. Sperling has married and had kids; at 54, the all-nighters take a toll. And, while he may have successfully browbeaten his way to power, he has never truly made it into Obama’s inner circle, the hallowed, tiny space still reserved for political gurus, Chicagoans, and those from the long march of the 2008 campaign. “It definitely bothers him,” says the former colleague.

Still, Sperling has not yet tired of pushing the budgetary rock up the mountain. The fact that he has been able to win before allows him to believe that he might be able to win again. “It would be hard for me to come in every day and work really hard if I weren’t an optimist,” he says. Besides, he is too busy looking for openings and doggedly ramming fixes through to have time to fall into the subjunctive progressive whine: if only. “I feel like, yes, I’d like to be six-one and twenty-six and start for the Pistons, too, but those things aren’t going to happen, and this is the world we live in,” he says brightly. “Sometimes you get up the hill, sometimes you don’t. But you always keep pushing.”

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posted in: white house, nec, economics, larry summers, tim geithner, barack obama

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