Tuesday, December 7, 2010

Negotiation Lessons from the President

Here are the president's comments on the deal worked out yesterday on taxes: 



The media seems preoccupied with trying to figure out which party gains politically and which party loses; who wins and who caves.   Partisans on both the right and left seem anguished by how much each side had to "give up" to make a settlement.  Watching the president explain the rationale for making a deal, I am struck by how hard he has to work to persuade these partisans of the necessity and justifications for the deal.  It is remarkable how similar the president's rationales sound to the explanations lawyers and mediators have to provide for parties to a litigation, to justify the benefits of a settlement over the uncertainties of litigation. 

This particular deal looks a lot like a "win-win" settlement.  That means neither side got exactly what they wanted, but both sides were able to satisfy important interests.  And the alternative to this deal would have meant failure for everyone, because both sides were agreed that they wanted to preserve tax breaks for the middle class, and if they couldn't resolve this issue, then all of the Bush tax breaks, including those for the middle class, would have expired at the end of the year.  To avoid that, they had to agree to extend the 35% top marginal rate for high earners for two more years, instead of allowing it to revert to 39%, but in return Republicans agreed to substantial additional tax breaks for working families.  In addition, the negotiators won a thirteen month extension of unemployment benefits.  (Ezra Klein's summary of what he called an imperfect, but not bad deal, is here.) (Andrew Sullivan also has a very good analysis of how shrewd a deal this was, from the president's point of view, here.)

What may be even more important and impressive is just the fact of being able to make a deal at all, in the wake of a polarizing election, and especially one that satisfies the most important interests of both parties.  This seems to represent a triumph of the Obama campaign's promise to bring interest-based negotiation (that might be a technical term for what in politics we should just call representative democracy), to Washington, instead of partisan gridlock.  The President's willingness to negotiate should be seen as a strength, not a weakness.

(A slightly different version of this post appeared yesterday on my political blog.)

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