The Pitfalls of Negotiation with Your Bad, Bad Opponents

Matt Bai wrote an interesting account of the life and death of last summer’s “Grand Bargain” to control Federal deficits in last Sunday’s New York TimesMagazine.  The Liberal Ironist notes some takeaway lessons from the failure of President Obama and House Speaker John Boehner to make relatively small concessions in order to achieve historic goals while the pressure was on and the World watched.  Some of these are general principles and some of them historical observations; they are offered in a somewhat-progressive order:

1.) Who you appoint to lead a negotiation can be at least as important as the offers that are made.

2.) Both sides’ recriminations of each other are true.
2a. It was naive of President Obama to think he could make larger demands after getting a concession in the amount of $800 billion in 10-year revenue increases from Speaker Boehner.
2b. It was naive of Speaker Boehner to negotiate from a position of ignorance about the receptivity of his party conference to a deal–understandable, considering his desire to have an agreement in-hand without so many “gnat bites” from partisan backbenchers, but still naive.
2c. A qualification: Speaker Boehner claims that President Obama upped his demands on revenue increases from $800 billion to $1.2 trillion because the President knew he couldn’t deliver the Congressional Democratic Caucus on a final settlement, and wanted to put the onus on the Speaker for canceling the dialogue.  This probably isn’t true, and possibly even projection on the Speaker’s part.  Speaker Boehner couldn’t even deliver the House Republican Conference for a more-modest compromise to raise the Federal debt limit in late-July, embarrassing Boehner and forcing him to acquiesce to Democratic dictation of much of the budget cuts to follow; while instructive, these lessons on the art of negotiation may be historically moot because Speaker Boehner never had to put the Grand Bargain to his party conference.  If the President had sought to backtrack from his commitments to the Speaker–rather than the other way around–he shouldn’t have quietly fallen-back on his previous agreement to $800 billion in revenue increases, and it wouldn’t have made much sense for the Speaker to turn down that status-quo ante offer over a matter of principle.  The simpler, more-powerful explanation is that the Speaker of the House had gradually come to realize that he–whatever his intentions–had promised concessions he couldn’t deliver.

3.) Do not undercut your negotiating partner. The Gang of 6’s alternative deficit-reduction platform from mid-summer was well-meaning–but it was a distraction. It made tougher pledges of tax increases, reflecting the stronger tendency of the slow-moving, personalized and consensus-oriented Senate to come up with a compromise. When the President drew attention to the Gang of 6’s plan, he both undermined the Speaker’s hand and increased the daylight between their positions on a final deal.

4.) House Speaker Eric Cantor was just the messenger–apparently. Unlike Speaker Boehner, Cantor actually served as as a Republican vote-counter in the House–Deputy Majority Whip when the Prescription Drug Benefit passed in 2003–and appreciated how difficult it was to move a caucus where it doesn’t want to go. Speaker Boehner made his commitments to the President based on his goals, not on a sober reading of their feasibility. The House Majority Leader always represented his position as that of a restive House Republican Conference, and looking back at Speaker Boehner’s failure to hold them together through more-modest votes, he may have been serious. This doesn’t mean he isn’t angling for the Speakership, but simply that there isn’t much point in making Cantor the villain if he was accurately conveying the sense of the Republican Conference.

5.) It’s a difficult balancing act between protecting your own goals and respecting the cognitive workings of your opposite in a negotiation. While it was less than the $1 trillion of the Deficit Commission’s recommendation or the $1.2 trillion of the President’s later offer, Speaker Boehner’s $800 billion revenue increase proposal allowed for tax reform and the elimination of tax loopholes while lowering tax rates. A deal was far more-viable while both sides could settle for this 2nd-best that allowed each side to claim an accomplishment.

6.) Developing a point that emerged off of consideration of points 1, 3, and 5, never forget the importance of trust-building.  Negotiations to strike a compromise don’t just require sophisticated thinking in order to transcend prejudices and beliefs, they cannot be considered in isolation from the outer dissonance of resistance from one’s own party.  The danger of crossing them highlights the stakes involved in being taken advantage of, or even if your negotiating partner disparages your offer by publicly entertaining another.  If negotiations fall through because of a real or perceived lack of commitment to the negotiation itself by either party, any ensuing embarrassment can lead to a “once bitten, twice shy” mentality on the part of both parties–which is what Bai darkly suggests has happened with the President and the Speaker.


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