Negotiation and the Fiscal Cliff

U.S. CapitolAs an attorney, mediator, and Human Resources executive for the past thirty-plus years, I’ve participated in a lot of negotiations. I have to shake my head as I watch our politicians trying to avoid the looming “fiscal cliff” of tax increases and spending cuts. Congress and President Obama are operating in the worst possible circumstances to find a workable compromise to resolve the pending cataclysm.

Here are a few of the problems with how this negotiation is set up:

     1.  Too many parties.

I’ve been in several multi-party negotiations. With every faction added, the difficulty of reaching agreement grows exponentially. It’s like a family with many children – with each child, the family adds relationships between that child and every other already existing family member. With one child, there are only three relationships; with two, there are six; with three, there are ten.

To pass any legislation, the House of Representatives, the Senate, and the President all must agree.  But the House and Senate each has two parties, and there are factions within those parties. We actually have 536 votes involved in any legislation, and we need 217 House representatives, at least 51 Senate members (or 50 and the Vice-President, or 60 Senators with the current filibuster rules), and the President to agree before any bill gets passed.

In fact, our Founders designed this system of checks and balances to require lengthy deliberations before laws are passed. I believe that’s a good thing most of the time, except when it’s not – such as now, when the stakes are high and deadlines threaten.

     2.  Lack of confidentiality

There are reasons that settlement negotiations are usually kept confidential and cannot be used in later legal proceedings between the parties. In order to convince the other side to moderate its position, the parties often need to make disclosures and admissions against interest that they wouldn’t want held against them during trial (or later election campaigns).

We may say we want transparency from our lawmakers, but if they are on the record as being for or against something, it is very difficult for them to back down without losing face. The nature of negotiations requires posturing – no one starts by presenting a bottom-line position. But once someone draws a line in the sand publicly, it is hard to change positions.

Yet in legislative negotiations, we hold our legislators accountable for representing their constituents. This means they have to make their positions public to some extent. Otherwise, how can “we the people” decide if they are representing us well? We don’t want our representatives working in a black hole and then announcing the outcome.  But transparency places our elected officials in a very awkward position in the negotiations.

As Mark Twain said, “Those that respect the law and love sausage should watch neither being made.” They are both messy processes. But a strong representative democracy requires that we watch.

     3.       A long history of arguing, and no mediator

MP900289068The factions in Congress and the White House have been in place for four years now, and the November election didn’t change anything. The current Democrat and Republican leaders in Congress and the President have a history of distrust. Their positions are set in concrete, and it will take a bulldozer to budge them.

Both sides say they want a settlement, but moving away from firmly stated positions is difficult. Both sides need to get something to save face. Yet their history of distrust may mean that they are more interested in seeing the other side lose than in reaching a settlement.

In this situation, there is no mediator, no neutral to bring the parties together. In the past, when the two houses of Congress have been at impasse, a statesman-like president could work to break the logjam. But President Obama maintains a partisan perspective in this debate. There is no one with the stature or trust of both parties who can broker a deal.

It doesn’t help to have non-parties to the negotiation (the media, etc.) who favor one side or the other, and who all pontificate about what their side and the other side should do. Yet that, too, is part of our democratic process under the First Amendment.

Because of these factors, the fiscal cliff negotiations are as difficult as they are important to our economic future.

At the time I write this, we don’t know what will happen. Will we fall into the abyss through inaction or find a way around it? Regardless of the outcome, remember that our political system is perfectly designed to get the result we get.

What else do you see getting in the way of effective negotiations?


1 Comment

Filed under Mediation, Politics

One response to “Negotiation and the Fiscal Cliff

  1. I see the basic problem as greed. The mentality of “I want what I’m gettin’ and I want more.” Our government programs are set up to receive automatic increases every year. Who of us in our family budgets make plans to receive more each year regardless of our present income? Yet that is what the government does. It’s time to put on the brakes, back off rediculous spending, come together as adults and to slaughter the pork, messy as it is.

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