Sunday, September 18, 2011

All or nothing?

In contrast with previous dealings with Congress, President Obama's recent introduction of the American Jobs Act presented a bill already drafted by the administration, and demanded that Congress simply pass the president's whole bill, right away. Some have viewed this new approach as a recognition of the limitations of the administration's previous negotiating strategies, in which the President often let Congress take the lead, left the details of legislation up to Congress, and signaled his willingness to compromise in advance. I'm curious whether other mediators think that the administration has been deficient in negotiation skills previously, and whether this new approach is likely to be more effective.

I think the new "get tough" attitude might in part represent an attempt by the president to resuscitate his image with voters who think the president has been too weak or compromising in the past. But I also think that the administration can afford to take such an attitude with the jobs bill, whereas such as strategy might have been too risky in prior negotiations with Congress.  As I mentioned in a another post, the jobs bill is similar substantively to previous Obama initiatives (like those initiatives, it starts off incorporating a lot of Republican ideas). But there is a crucial difference between this jobs bill and previous efforts to pass important bills through Congress--I'm talking especially about the stimulus bill, the health insurance reform bill, the financial regulation bill, and the debt ceiling increase. And that difference may explain the change in negotiating strategy. In all of those previous cases, the administration felt it simply had to get something passed, and by necessity all those bills had to contain substantial compromises given the composition of Congress. The price of refusing to compromise in each of these cases was considered too high. In the case of the debt ceiling increase, the alternative to compromise would have been an unprecedented default which could have caused another recession. That was unacceptable. In the case of health care reform, the alternative was no reform, and maybe another 15 or 20 year wait before another attempt could be made. That was also considered unacceptable. As for the stimulus bill, given the dire state of the economy at the beginning of the Obama administration, their economic team felt they simply had to pass whatever stimulus they could get through Congress as quickly as possible. And financial regulation was also considered something the administration simply had to do, even if the bill were weakened to get it through Congress.

In the case of  the new jobs bill, however, President Obama may finally be in a no-lose situation. The jobs bill is being presented with a fierce urgency--the administration is demanding that it be passed right away--but they know it is not the end of the world if it doesn't pass in toto. If the bill passes, the administration can take credit for bold action, and it stands an excellent chance of achieving some positive economic results. If the bill does not pass, we just have to live with a continued sluggish economy, and the president can blame Congress for refusing to do anything to help reduce unemployment. Congress will then have to at least share responsibility for the continued bad economy. If Republicans in Congress accept only parts of the bill, it will be interesting to see if the Democrats in Congress allow only those parts to pass, and whether the president would veto a bill that only does part of what he is demanding (presumably the tax cut part without the infrastructure spending part). But regardless of how the Democrats in Congress and the administration handle those tactical questions, they can still claim a political win from a partial bill. Democrats running for election next year will in that case be able to blame Republicans for insufficient action.

Given that the jobs bill is not seen as a do or die piece of legislation, despite its importance to the economy, it makes perfect sense for the administration to adopt a no-compromise approach to it. This is basic Negotiation 101. If you MUST make a deal, you are going to have to compromise, because the other side knows you must make a deal. And therefore you probably won't get your best deal, but you will get something accomplished. On the other hand, if you can afford to walk away from a deal, you can also afford to be uncompromising, because you win either way. Either you make the deal you want, or you blame the other side for the failure to conclude the negotiation. I think it is the nature of the jobs bill, as much as any change in strategy to bolster the public's perception of the president, that explains President Obama's changes in tactics.

(AP Photo/Tony Dejak)

(adapted from a post on my political blog

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