Negotiating the fiscal crisis

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First, they started by staking out extreme positions. Republicans dug in their heels with their mantra of no new taxes and yes to big-time spending cuts.  Democrats dug in their heels for an increase in taxes on the top 2 percent with no major spending cuts. The lines between the sides were clearly drawn.  Let the battle begin.
 
Next, we now see each party conceding with stubborn tenacity. Rather than working together on creative options for mutual gain, the party core on each side has competed over who is more politically stubborn. Of course, most major media outlets have rewarded this behavior, fueling the fire with story after story about this unfolding tug-of-war. The combination of media and political exploitation of this crisis has turned positional bargaining from haggling into a dangerous form of political brinksmanship.
 
Finally, each side has attempted to demonstrate a greater willingness than the other to walk from the table. President Obama, bruised from his concessions in the debt ceiling negotiations, has appeared determined to show that he would rather the U.S. risk falling off the cliff than concede to Republican demands. And while the Republicans arguably may have relatively more to lose in this crisis than the Democrats, Speaker Boehner’s concessions thus far are but a mere glimmer of willingness to compromise rather than fail.
 
This political brinksmanship overshadows the possibility of good-faith negotiating. Each side treats the negotiation as a win-lose battle: more for us is less for them. But they are wrong. Whether or not we fall off the cliff, the recurring political stalemates in Washington point to the profound inefficiency on our current decision making process; the broken state of relationships on Capitol Hill makes national decision making depressingly more difficult than it needs to be. Political partisanship is to be expected, but within reason. A functioning democracy requires differences to be discussed and debated, not attacked through media firebombs.
 
At a broader level, the United States as a whole has a strong economic interest in effective decision making. International investors from China, India, and elsewhere are watching the current political antics with grave concern, wondering whether they can continue to trust the U.S. fiscal system or should hike interest rates. The wisdom of Dr. Seuss brings this point home. He describes a North-Going Zax and a South-Going Zax whose tracks eventually meet. Both refuse to budge. They stand face to face for years, arms crossed and unmoving, stuck in their positions. Meanwhile, the world around them does change.  Buildings and superhighways sprout up. Their brinksmanship serves short-term self-interest, but at a major long-term cost. In their fight to survive, they become an anachronism.
 
The fiscal negotiations are not hopeless. Lawmakers have a choice about how to deal with their differences. Practically speaking, the parties would be wise to keep five strategies in mind as the fiscal crisis nears a crescendo.
 
First, rather than positional bargaining, reframe roles as joint problem solvers. Not the soft, fuzzy kind, but as serious problem solvers working together to address the serious differences that stand between them. The fiscal issues are shared problems affecting the shape of government, the international economic and political reputation of the U.S., and our perceived role in the world. Building roles as joint problem solvers can help, as Ronald Reagan and Tip O’Neill discovered many years back. Joint problem solvers work best if they feel personally connected. Obama and Boehner should continue to meet at the White House to figure things out. Keep it as informal as possible so as to encourage collaboration and creative thinking. By working together, as joint problem solvers rather than adversaries, things get done.
 
Second, instead of negotiating over two starkly different positions -- or proposals, as the case may be—try the “one-text process.” Call upon a bipartisan group of elder statesmen to put forward a single negotiating text that works to address key concerns on both sides of the aisle. At this late point in the game, the draft would have to be a framework agreement, with details to be worked out at a later point in time. The statesmen privately take the single text to each party’s leadership – and ask for it to be criticized. (This is a skill at which party leadership on each side has proven to be particularly adept.)  The elder statesmen then revise the text, trying to address the interests expressed by each party. A few iterations of this process are likely to build an agreement that better addresses and integrates each side’s interests than either the current Democratic or Republican proposals. And after several revisions of the text, parties face the same choice:  Shall we jointly agree to this text – or jump off the cliff?  With their interests well-represented in the single text and their stamp of ownership imprinted through the process, agreement is much more likely than with positional bargaining. And the agreement better satisfies each side’s interests.
 
Third, take the debate out of the public eye. Not completely, but largely. For any agreement to be made, both sides will need to make painful concessions. From the perspective of politicians awaiting reelection or asserting leadership post-election, such concessions can be deadly. The politicians are labeled traitors by their party and constituents -- and become vulnerable to punishment by both. So leaders need a political umbrella, a wall of privacy, within which to discuss ideas freely and to be able to commit to concessions without political decapitation.
 
That is why the current negotiations in front of the media cameras are so ineffective. While political leadership assume that getting their positions out on national television serves their negotiation advantage, it actually backs them into a corner. It is sometimes better not to know where any particular leader stands on an issue, at least not in the midst of the crisis. Transparency with the media on the merits of the discussion is fine. But feeding the media frenzy – hungry for reporting on the entrenched positions of each side – proves counterproductive. In this polarized world, leaders need cover to compromise.
 
Fourth, attach to an agreement about which each side can legitimately proclaim: “We won.” This requires sacrifice on each side, but it also requires creative thinking on options for mutual gain. Take, for example, the issue of spending cuts. The two sides can trade on cuts that are of high value to one side and low value to the other, thus bridging the gap. Additionally, they may decide to make some decisions now; use the Simpson Bowles framework as a benchmark for other decisions; and refer contentious cuts to a bipartisan committee which can invent creative ways to reconcile differences.
 
Finally, start now to prevent future fiscal negotiation disasters. This is not as cumbersome as it may sound. If Obama and Boehner’s advisory staff – and even the leaders themselves -- were jointly trained in skills of interest-based negotiation, they would have a powerful set of tools to avert future crises.  Rather than trying to excavate from a crisis through new or more deeply entrenched positions, these leaders would have the tools to jointly construct a negotiation process that drastically improves decision making and working relationships.
 
In the grand scheme of things, the fiscal cliff is not just a crisis between Blues and Reds, but a crisis over the state of our country. Seeing negotiation as an adversarial game misses the point.
 
Shapiro is founder and director of the Harvard International Negotiation Program, faculty at Harvard Medical School/McLean Hospital and affiliate faculty at the Program on Negotiation at Harvard Law School, and co-author of “Beyond Reason: Using Emotions as You Negotiate.”