TIME Newsmaker Interview

Eric Cantor’s Secrets for Negotiating with Joe Biden

Joe Biden
U.S. Vice President Joe Biden speaks during the Civil Society Forum on the sideline of the U.S.-Africa Leaders Summit in Washington, D.C., on Aug. 4, 2014 Jewel Samad—AFP/Getty Images

"The Guy's Awesome"

Last week’s Republican victories may have had the paradoxical effect of increasing the influence of the consummate Congressional Democrat, Joe Biden. GOP leaders looking to show they can get things done now that control both the House and Senate will need to cut deals with the Obama White House, and Vice President Joe Biden may be their best hope to do so.

On Tuesday, TIME spoke with one of the closest observers of Biden’s negotiating tactics, his long-time sparring partner and former House Majority Leader, Eric Cantor, now vice chairman and at the investment bank Moelis & Company. As the number two Republican in the House for the first six years of the Obama administration, and a constant thorn in the side of the White House on issues like the budget, energy, immigration and health care, Cantor saw Biden’s techniques up close.

You’ve spent a lot of time negotiating with Vice President Biden. What was that like?

Cantor: Unquestionably, the Vice President knows how to negotiate. He understands people. And in my professional background, before I got to Congress and certainly now in the private world at Moelis & Company and in Congress, if you’re interested in doing deals, and getting a result, what I think what one needs to do is be able to size people up. And this is what Joe Biden has always been about in my experience. He is able to size up where the opposition is. He’s firmly rooted in his direction, what he needs to accomplish in the negotiations, and then understands how far you can push and not lose a result or a deal.

My real experience is from the extended time we spent together in the summer of 2011 around the debt ceiling discussions. As you recall, the Speaker had asked me to serve on the Biden commission. The President had basically formed it and put the Vice President in charge. And there were a handful of us in the room for seven weeks almost, three days a week, two and a half hours a day. And the Vice president was the only one, and that commission was the only entity that really came up with a list of spending reductions that both sides could agree to.

Now, he would always say nothing was agreed to unless everything is agreed to. But nonetheless, work was done in the granularity of the programs that were targeted. Nothing was ever agreed to universally because the tax question came up and that’s what kicked it back to the White House and we all had to come back to the White House for two weeks with the President and then ultimately that ended with the Super Committee creation. But if you look at what has transpired since then, the Super Committee, the fiscal cliff, Murray-Ryan, all of that, the work that came out of Joe Biden’s commission is the common theme. And I believe that is attributable to his negotiating skills and ability to cut through—to set aside what you don’t agree on and try to come to a result.

What was the difference in negotiating with the President compared to the Vice President:

Cantor: I just think that the President obviously doesn’t have the tenure in Washington in negotiating deals that the Vice President’s had. Just in terms of pure time. And I think that the President is very rooted in what he wants. The President also, in my view, is very rooted in what he thinks the other side wants. And that’s where the difficulty in my opinion has been with the President over the last six years. If one does not agree with the President’s view of what you want, there’s very little prospect for a result. Joe Biden has a real sensitivity, not only to human reaction, but also partisan and political sensitivities. He understands how far you can push before you just blow up the prospects for a deal.

One readout of last week’s White House meeting suggested that the Vice President got ahead of Obama’s position on immigration reform in a desire to cut a deal. Have you seen that happen before?

Cantor: Honestly, the whole sense of the discussion around the initial debt ceiling talks in 2011 was just that. The president had dispatched the Vice President to come up with areas that could become part of a larger deal. And really the Vice President was very clear and never hid anything from me. He said in order to get any of the kinds of things we’re discussing, the President is going to want some kind of revenue increase. He laid it all out on the table. ‘That’s what we need.’ And I indicated what we needed and that we couldn’t go for tax increases. So I think there has certainly been evidence that the Vice President is a negotiator, he wants to cut through and get a deal done.

I think that on the fiscal cliff deal, when he struck that agreement with McConnell, that was the last time that the President wanted Joe Biden involved. And this is unfortunately what the pattern has been. Hopefully, I think the President may see the light and say if you want to get a deal done, bring in the deal man, Joe Biden.

What’s the current state of the Biden-McConnell relationship?

Cantor: I can’t speak for McConnell. But I do… stay in touch with [Biden]. He stays in touch with people. Part of the ability to do deals is to know both sides and to understand their thought process and their political priorities and imperatives. My sense would be, if I’m like others, Joe Biden has maintained those relationships. And that’s one of the striking differences between the President and Vice President. The President has not spent the time necessary even while he’s been in office the last six years, much less before, developing, nurturing relationships and understanding people’s thinking. And that is a huge impediment to the President’s ability to do a deal, whereas I think Joe Biden has been schooled in that way.

How did you try to square the Vice President’s public image with his negotiating record?

Cantor: Joe Biden is what you see. You know, he’s genuine. Yes, he’s prone to gaffes publicly, and he’ll admit that. He’s very self-deprecating like that. And I’m certainly not one who agrees with Joe Biden on all things—we probably disagree more than we agree—but from a human and relationship standpoint, the guy’s awesome.

Do you think the midterms opened up the possibility for deal-making?

Cantor: I really think that there’s going to be a trial period here. And I really look at the next six weeks as that. From the White House standpoint, if the president signs an executive order on immigration unilaterally that will not bode well for the productivity of the next Congress. Again, I think that’s the trial issue for the president.

From Congress’ standpoint, their job is to get done the omnibus/minibus spending package. Because if they kick the can and decide to push the [longer-term spending bill] into the next Congress so they don’t have to “negotiate” with the other side, I think that leaves wide open the chance of mischief and derailing of the path to productivity.

Do you think last week’s election paved the way for a more united GOP conference, or will leadership still have difficulty keeping members in line.

Cantor: In my experience, I think the latter would probably be [a more likely] reality. And it’s always going to be a challenge for leadership. I do think in the House, the Speaker and the Leader are going to have a much larger majority now that hopefully will be more inclined to follow the path laid out by the Speaker and the leadership. If we can see the House and Senate to really begin to move legislation across the floor—and some of the legislation and probably a lot of it will not be to the White House’s liking—there’s something about that that may lend itself to a more espirit de corps, if you will, for folks to hang together because they’re winning, they’re getting legislation across the floor, they’re getting it out of Congress, sending it to the President’s desk and then it would be incumbent on the President to respond.

I think if you can see some real legislative productivity on the Hill that may lend itself to the larger majorities now hanging with leadership more.

MONEY home improvement

$336 Made This Blah Bathroom Awesome

A budget remodel turned this bleak bathroom into an attractive cottage-style space. Here's how the homeowners pulled it off.

Nothing’s more boring than basic beige. While the master bath at Meredith and Stephen Heard’s ranch house, in Fayetteville, Arkansas, was perfectly functional, it was a bleak blank box of washed-out finishes. To give it some oomph, Stephen created a high-contrast look on the walls with white-painted board-and-batten wainscot made from low-cost lath and furring strips; above it, Meredith used a dark gray paint to add depth.

The vanity was in great shape, so Stephen just replaced the cultured-marble top with stained and sealed butcher block and, to create more deck space, put in a vessel sink. Meredith updated the cabinet doors with white paint and satin-nickel pulls left over from their kitchen remodel. To brighten the space, Stephen replaced the old strip vanity light with a three-shade fixture and the standard overhead flush-mount with a drum-shade pendant. Finally, Meredith added a sunny shower curtain she made herself. Having banished the bland, she says, “It’s so much more welcoming now—we feel like we really gave the room some personality.”

The Project Tally

• Tacked up lath and furring strips, board-and-batten style, using a nail gun; filled knots, sanded, and caulked; then sealed it all with leftover primer and paint $26
• Painted the walls a dark gray, custom mixed at the store from paint they had on hand $0
• Freshened the vanity with leftover paint and pulls $0
• Topped the vanity with a new butcher-block counter, vessel sink, and faucet from a big-box store $170

For the full tally, click here for the original article from This Old House.

Read next: The Secret to Getting a Ridiculously Cheap Thanksgiving Flight

MONEY retirement planning

8 Things You Must Do Before You Retire

sébastien thibault

Getting ready to retire? The moves you make in the months before you call it quits can smooth the way to a secure future.

After working diligently for more than 30 years—so you could set yourself up financially for your golden years—the glow of retirement is finally on the horizon. Alas, it’s not time to relax just yet.

Each day more than 10,000 baby boomers enter retirement. Yet only around one-quarter of workers 55 and older say they’re doing a good job preparing for the next phase, according to the Employee Benefit Research Institute. The last 12 months before you call it a career is especially critical to putting your retirement on a prosperous path. It’s time to get your portfolio, health care, and other finances in order so you can enjoy your new life.

THE TURNING-POINT CHECKLIST

12 Months Out:

Dial back on stocks now. You still need the growth that equities provide, but even a 15% market slide in the year before you retire can erase four years’ worth of income. Cap stock exposure to around 50% in your sixties, advises Rande Spiegelman, vice president of financial planning at Schwab Center for Financial Research.

Raise cash. Your paychecks are about to stop. So as you downshift from stocks, move that money into a savings or money market account to fund at least one year of expenses, says Judith Ward, T. Rowe Price senior financial planner.

Set a realistic retirement budget. Use the worksheet on Fidelity’s free retirement-income planner to list all of your fixed and discretionary expenses. Then use T. Rowe Price’s free retirement-income calculator to see how safe that level of spending is likely to be, based on the size of your nest egg and age.

6 Months Out:

Play out Social Security scenarios. You can claim Social Security at 62, but if you can hold off until 70 your checks will be 76% bigger. Tool around FinancialEngines.com’s free Social Security Income Planner to find the best strategy for you.

Figure out how you’ll pay for health care. Check if your company offers retirees medical, long-term care, and other insurance coverage. If you won’t get health insurance and aren’t yet 65 (when you qualify for Medicare), then compare plans offered via the Affordable Care Act at eHealthInsurance.com. Or use COBRA, where you can stay on your employer plan up to 18 months after leaving.

3 MONTHS OUT:

Begin the rollover process. In a small 401(k) plan, average fund expenses can run north of 0.6% of assets. You can cut those fees at least in half by shifting into index funds at a low-cost IRA provider. See if your plan provides free access to investment advisers to help you decide.

Sign up for Medicare. Nearing 65? You can enroll for Medicare up to three months before turning that age. Also, figure in supplemental plans to cover expenses that Medicare does not, such as dental care and prescription drugs.

Get a running start. Put your post-career itinerary into action. Research volunteer groups that you want to join, reach out to contacts if you plan to keep a hand in work, start a new exercise routine, or begin planning that big trip.

MONEY

$539 Created This Reading Nook

A budget renovation transformed this odd space into a cozy retreat.

In a blank space, there’s a lot of room for improvement. Just ask Vel Baricuatro-Criste and her husband, Gerson Criste. After having a contractor add a windowed egress dormer in an over-the-garage room for their teenage son, they were left with an odd, unfinished nook. Vel saw it as an opportunity to create a quiet reading alcove as part of an overall update of the bedroom.

What They Did
She painted both spaces white with an accent rail of bold navy stripes to create a cohesive look. To keep things cozy underfoot, Gerson installed striped carpet tiles over the nook’s plywood subfloor. Then he built a storage bench from prepainted cabinets, using stock lumber to fill in gaps at the back and sides and painting the exposed sides white so that they blend in. Vel made a seat for the bench by stapling fabric-topped foam to sheet pine that her husband had cut to size. Gerson installed floating shelves to display some of their son’s books; the rest tuck neatly away in the storage bench. Sconces flank the window seat, and a flush-mount fixture hangs overhead, providing plenty of light for nighttime reading. Now the nook is her 13-year-old’s favorite place to unwind. “He has a whole room to hang out in, but whenever he has friends over, they’re always in that space,” says Vel. “They love it!”

The Project Tally
• Painted the room white with navy stripes $109

• Finished the floor with carpet tiles found at a big-box store $98

• Created a bench from laundry cabinets and stock lumber $110

 

For the full tally, see the original story at This Old House.

TIME Budget

Which President Accrued The Highest Budget Deficits?

Hint: It wasn't Barack Obama

When looking at the United States’ massive amount of national debt, many Americans focus blame directly on the president. In fact, CNN surveyed 1,010 adults nationwide earlier this year and found that 44% still believe that President Bush and the Republican party were “primarily responsible for the country’s current economic problems.”

But was it this former president who left the country in its worst shape at the end of his two terms? With data provided by the White House Office of Management and Budget and the Council of Economic Advisors, research engine FindTheBest ranked the 14 most recent presidents by the total deficit they accrued during their presidencies—so far, in the case of Barack Obama—as a percentage of the Gross Domestic Product of their time in office.

TIME Budget

This is How the U.S. Has Been Spending Its Money Since 1971

Federal spending on social programs has increased in the wake of the Great Recession

You’ve heard it too many times—griping and groaning about the United States’ debt, worrying about where tax dollars are going, outrage that the government is spending its money on all the wrong things—but in truth, too many Americans have no idea where the federal budget goes, which is a part of the reasons why they feel left in the dark.

Instead of pointing fingers, it’s always best to get a little perspective. Research engine FindTheBest complied federal budget data since 1971 to see how the government has been spending its money over time. The bars in the graph are divided by program.

Note that starting in 2008, around the time of the Great Recession, the government increased spending in Social Security, unemployment and labor, and it has steadily increased every year since. This was largely due to the fact that those without jobs realized that they could be eligible for Social Security disability benefits and Medicare, which would cover a big portion of their expenses.

Also, 2009 saw a significant increase in spending than the year before, especially in the “other” category—a mix of energy, agriculture, commerce and housing credit, community and regional development and other allowances. The spike was in commerce and housing credit, which increased from $27.8 billion in 2008 to $291 billion the next year as the government tried to fix the newly-burst housing bubble.

TIME Innovation

Five Best Ideas of the Day: September 5

1. Our nation’s racial divide starts early: America’s public schools are still highly segregated.

By Reed Jordan at the Urban Institute

2. The Pentagon is getting bad advice about responsibly managing its budget and our national defense.

By Nora Bensahel in Defense One

3. “We need to step up our game to make sure that Putin’s rules do not govern the 21st century.”

By Madeleine Albright in Foreign Policy

4. Over a lifetime, and despite the high cost of tuition, a college education is still a great deal.

By Jaison R. Abel and Richard Deitz at the Federal Reserve Bank of New York

5. Reality television – MTV’s “Teen Mom” and “16 and Pregnant” – triggered a plunge in the teen birthrate.

By Phil Schneider in the Aspen Journal of Ideas

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Innovation

Five Best Ideas of the Day: August 27

1. A reimagined NATO – with rapid response capability – could balance the Putin doctrine.

By David Francis in Foreign Policy

2. Hold the bucket: Focusing on a single disease isn’t a good use of philanthropy dollars.

By Felix Salmon in Slate

3. The Navy’s audacious plan for a new warfighting vessel was too good to be true. The result is a ship that meets none of our needs well. Cancel the Littoral Combat Ship.

By William D. Hartung and Jacob Marx at the Center for International Policy

4. The conventional wisdom is that social media stimulates debate, but self-censorship online actually leads to a ‘spiral of silence.’

By Keith Hampton, Lee Rainie, Weixu Lu, Maria Dwyer, Inyoung Shin and Kristen Purcell at the Pew Research Internet Project

5. Better living through design: Injectable, long-acting birth control will revolutionize family planning in the developing world.

By Heather Hansman in Pacific Standard

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME energy

Dropping Oil Prices Threaten Moscow’s Budget

Oil refinery in Ufa, Russia, seen in April 2014.
Oil refinery in Ufa, Russia, seen in April 2014. Andrey Rudakov—Bloomberg/Getty Images

Russia has seen its economy boom with the price of oil. But if the cost of crude falls, Moscow could struggle to make ends meet

This article originally appeared on OilPrice.com

Oil and gas are at the heart of the Russian economy and are largely responsible for keeping Moscow’s government budget in balance. But the recent decline in the price of oil from the North Sea and Texas has now spread to Urals crude, giving President Vladimir Putin one more economic headache.

The price of Urals crude fell just below $100 per barrel on Aug. 18, an 18-month low. On Aug. 19, it dropped to less than $97 per barrel. These declines coincided with similar drops in the price of Brent crude from the North Sea and U.S. oil.

The reasons are fairly easy to recognize. First, the United States has been on a drilling tear, extracting oil at record levels to increase its supply at a time when demand is waning. Second, though more tentative, is that conflicts in North Africa and the Middle East are so far not interfering with oil production in these regions.

This oil production boom raises problems for Moscow. Two-thirds of Russia’s exports are oil and gas, accounting for fully half of the central government’s revenues. That means that so far this year, every dollar drop in the price of Russian oil means a cut of about $1.4 billion in revenues.

This comes as Russia’s oil industry joins its defense and finance sectors as targets of sanctions by the European Union and the United States over Moscow’s unilateral annexation of the Crimean peninsula in Ukraine and its suspected role in the fighting between Ukrainian forces and pro-Russian separatists.

Some analysts say the effects of the lower oil prices may not be lasting unless the drop in oil prices fall further in coming years. Vladimir Kolychev, the chief economist at VTB Capital, a global investment firm with headquarters in Moscow, says brief dips have less of an impact on Russia’s budget than the average cost of oil over an entire year.

“The first thing to remember is that the oil price projected by the finance ministry is … $104 average for the year – that still looks conservative,” Kolychev told Reuters. “Even if the oil price falls to $90, we’ll still have $105 average.”

As an example, Kolychev calculates that Russia’s budget would balance if oil’s average price fell to $103 per barrel.

Even if Moscow can tame its budget, it seems clear that Russia’s oil sector will feel the pain from the one-two punch of Western sanctions and lower prices. Vedomosti, a Russian financial journal, reported Aug. 14 that government-owned Rosneft, Russia’s largest oil company, has asked Moscow for more than $40 billion in debt relief because of the sanctions.

That’s a sharp reversal from just a month ago. Western sanctions were imposed on July 15, and three days later, Rosneft officials shrugged them off, saying the company would continue to pursue its plans and reap profits. In fact, a week after that statement, Rosneft CEO Igor Sechin boasted that the company’s revenues were soaring.

 

TIME Saving & Spending

This 1 Mistake Could Cost You Hundreds of Dollars

istock

Read the fine print—or pay

Everybody hates bank fees, but what’s even more worse is not knowing when or why you’re getting dinged with those charges.

In a new study, the website WalletHub.com finds the average checking account has 30 different fees that can ding you, and banks aren’t always transparent about the details. “Some banks disclose their fees only after a customer has opened an account,” the site warns. “Others disclose their fees in inconspicuous sections of their websites.”

In particular, those $35 overdraft fees that can be triggered by buying something as small as a cup of coffee can really pack a wallop, yet many of us don’t bother paying attention to the fine print that spells out the details of how financial institutions process transactions. We should, though — a new interactive tool from the Pew Charitable Trusts shows how seemingly insignificant differences in transaction-processing practices can make the difference between having enough money in your account to tide you over until your next payday or getting socked with more than $100 in fees.

Pew looks at three different variables: Letting people overdraw their balances when they make purchases or ATM withdrawals versus declining these attempts, processing transactions in the order they happen versus in order of highest-to-lowest dollar amount and offering a $5 “grace period” threshold before an overdraft fee kicks in versus no threshold.

In a trio of scenarios, Pew follows three hypothetical customers in a scenario many Americans are all too familiar with: navigating the demands of daily expenses with less than $200 until the next paycheck comes. In each case, everything is identical for the variable under scrutiny.

The differences are huge. For instance, a customer whose bank processes transactions in the order they happen winds up getting hit with a single $35 fee — while her alter ego who banks with an institution that practices high-to-low transaction ordering gets nailed for FOUR $35 fees when conducting the exact same transactions.

The other two examples show a similar disparity. For many of us, the difference between ending the month 10 bucks in the black versus more than $80 in the red is huge, especially if our spending habits are such that this happens frequently.

Consumer advocates criticize banks for their overdraft practices, pointing out that the customers who pay the bulk of these charges tend to be younger, minority customers who are poorer to begin with and often don’t have the financial education to know a raw deal when they see one. Fewer than 10 percent of bank customers are responsible for three-quarters of overdraft charges, according to the Consumer Financial Protection Bureau. “[This] is especially pertinent as the CFPB continues to study overdraft and will release new rules based on these studies in 2015,” Pew says.

The CFPB says it’s still looking at how these fees impact bank customers. “We need to determine whether current overdraft practices are causing the kind of consumer harm that the federal consumer protection laws are designed to prevent,” CFPB director Richard Cordray said in a statement last month, saying the agency’s most recent research “compound[s] our concerns” about whether overdraft practices leave vulnerable customers at risk.

Until the CFPB acts, it’s buyer-beware out there, so don’t forget to read the fine print.

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