Why the Fiscal Cliff Negotiations Are More Complicated than We Think

This isn't just a two-party conflict. It's an obstacle course with two fractious teams that requires complicated strategies

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TOBY JORRIN / AFP / Getty Images

House Speaker John Boehner listens to President Barack Obama before a budget meeting at the White House in Washington on Nov. 16, 2012.

The fiscal cliff negotiations have the feel of a major sporting event. The media largely describe the cliff as a two-party conflict, with each side having a fighter in the ring. What House Speaker John Boehner and President Obama say — and don’t say — is decoded and analyzed, interpreted as posturing and signaling, punching and counterpunching. Who has leverage? Who doesn’t? Who will win? Who will lose?

In fact, what’s going on is quite different, and more like an obstacle course for which Boehner and Obama are leading fractious teams. Because the parties, particularly the GOP, are divided internally, negotiations within each party are apt to be at least as difficult and time consuming as those across the aisle. Leaders on both sides will have to persuade majorities to live with trades that deliver something important in exchange for concessions on other issues (trading tax increases for a commitment to entitlement reform, for example). Roger Fisher, author of the famous Getting to Yes, called this the “inside out” problem of negotiations.

(MORE: Entitlement Cuts Loom as Obstacle to Fiscal Cliff Deal)

Within each party there are not just two but multiple divisions, so negotiators face what’s called a multiparty context, which requires a particular strategy: analyzing which groups they might win over on the basis of diverse goals. On the right, some members of Congress care most about the size of government, others want to reduce and simplify taxes, and still others advocate maintaining a strong defense. On the left, some seek more-progressive taxes, others focus on protecting the poor, and still others defend current entitlement programs. (Of course, not everyone can be neatly pigeonholed into a group, which only adds to the difficulty of the analysis.) And the complexity of the issues under negotiation — tax rates and deductions, entitlement programs, defense and discretionary spending — make it hard for legislators to know exactly what they are committing to until they see a bill drafted.

In order to tackle the inside-out problem, negotiators must solve the representation riddle. Who actually speaks for each group? Who has the influence to deliver other votes? The person making the most appearances on Fox and CNN may not always have the gravitas and credibility to shepherd colleagues to a “yes” behind closed doors. As diplomats and salespeople know, winning commitments from the wrong partners can lead to agreements that fall apart — sometimes spectacularly — when promises cannot be delivered.

(MORE: Why We Should Go Over the Fiscal Cliff)

To succeed in such a daunting environment, negotiators can deploy three tools. First, they can use proxies to float multiple packages simultaneously to assess the viability of each one and solicit possible improvements. Both sides need flexibility to explore combinations of options across the major issues, to test whether and how each deal might garner sufficient support.

Second, as a potential deal package begins to emerge, negotiators can switch to a “single text” technique — working from one written document and inserting language and clauses that make the deal palatable to enough factions. Sitting side by side and working to iron out objectionable language or deadlines can help massage the agreement into final form.

Finally, negotiators can equip their counterparts with arguments they can comfortably make to their supporters. The more help the Democrats can give to their colleagues across the aisle in justifying a deal — perhaps for national strength and security, even if it means abandoning earlier positions about not raising taxes — the better. Negotiations end successfully when all sides can claim victory.

MORE: It’s Time to Make Taxes Nontoxic

118 comments
dz4485
dz4485

Government efficiency can and should improve. This should not be only a republican issue, in fact the 'cut, cut, cut' approach, without keeping social value in the equation is quite destructive to a pragmatic solution. 

You need to get 'bureaucratically active', a borrowed phrase from Jennifer Pahlka from 'Code for America'. It means getting into the guts of government and looking at it case by case.
A very recommended video on the subject:
http://www.youtube.com/watch?v=4YBwTt4xbtI

(Show Me the Manual: An Internet Town Hall)

The tools to solve this are already here. Its using 'open data', better interfaces to government, and cutting out the middle-man.

REGinAz
REGinAz

Some accuse me of having a “conspiracy theory” mentality but is there actually an active “conspiracy”? Well let’s consider the merit in thinking there is by evaluating what is really supported by facts and not convoluted by ambiguous numbers. We know the country’s wealth is increasingly held, more and more, by the few who just feed their insatiable “more” (never enough) appetite. We know the likes of Grover Norquist exists for the sole purpose of intimidating and coercing Republicans to squelch their individual consciences and to force their firm support of the Party’s positions. We have seen Cheney, Rove, the Koch brothers and several others join in this pressuring of their own to assure unified support for their positions, even to forcing moderates, like Stowe and Lugar, out. We understand that “the money”, like with Adelson, provide an abundance of mega-millions for the purpose of supporting candidates they can control and opposing those they can’t (they have even said that they can “make or break’ anyone), as well as for developing and promoting the propaganda used to con the people and manipulate public opinion. We have seen they go to great lengths to provide “puppet” candidates who are committed to “doing as their strings are pulled”; with Norquist even stating that “the next Republican president only has to be qualified to sign the bills they send him”.We hear them spout their scripted propaganda with it being repeated - word for word - by all of their people. We see how they arrogantly fault and stubbornly block all efforts, belligerently withholding bipartisan cooperation, no matter what the cost to the people; even to exaggerated attacks for questionable purpose, like seen with McCain and Graham in their over zealous criticism of S. Rice. We have seen where people like the Koch brothers initiated, directed and funded the Tea Party Movement, the Swift-boat propaganda and the manipulation of the “conservative” Christian, all aimed to sway people in the same single direction. We know all of their positions always have real benefit for “the money”, who strongly support them. We see the stubbornness and arrogance of the likes of John Boehner, Mitch McConnell, Paul Ryan, Eric Cantor, Michelle Backmann and others as they protect the interests of “the money” and ignore their responsibility to the majority. We saw the concentration by Bush-Cheney on serving only “the money” and experienced the costs of that.We can clearly see the total consistency in all of this and can actually feel the organization behind it. We even see the cooperative support from the likes of Limbaugh, Palin, Beck, Hannity, FOXNews and others and wonder how they are compensated. We hear the constant ranting against “liberalism”, blaming government spending, “big government” and the deficit as the only evil but never hear any honest recognition that our problems are actually the direct result of exploitation by the few, that resulted from permissive policies labeled as “conservative”, that encouraged and allowed run-away greed, gross dishonesty and self-indulgence, with the few always walking away with substantial gains and leaving the losses/costs to the majority. We see their aggressive efforts to return to “more of the same”, Bush-Cheney style, and realize that can only result in “more of the same”. Is all of this evidence of a “conspiracy” - everyone will have to decide that for themselves while recognizing there is formidable evidence that literally demands concern. For myself, I’m not against responsible “conservative” policies, I am very much against having a subservient government catering only to the interests of the few, with “puppet” politicians serving “the money”, their masters, and neglecting their responsibilities to the people.

BobJan
BobJan

Since SS is not a deficit problem, Medicare needs an inventory to find out what it will take to be sustainable, Medicaid also should be under close watch to look at just what is the problem and then these 3 "entitlements" should be under control. So why the big hullabaloo about how hard it is to fix the fiscal cliff. Does it have something to do with 25% of the corporations paying no tax. Or is it the 2 wars that were started and not one person in Congress raised an objection of how to pay for it. Then maybe someone on this thread could tell me why the Congress didn't negotiate price controls with the big pharmas. Then we have 2 tax cuts given out. Since the 2 wars, tax cuts, and big pharma pay day came under the control of a Republican President and a Republican Congress just how in the he double hockey sticks can some of the people be blaming Obama for this mess all by himself. What have the Republicans done lately that would prove to anyone that they're for the US of A. It appears that anything they've done in the last 12 years has been to undermine the strength of this country. In a nutshell they're a bunch of little kids that will take their ball home if they don't get their way. And I could repeat all that for the Democrats too because they're a bunch of children on the playground ready to quit at the sign of compromise. But in all reality the Republicans are nothing more than a bunch of sniveling, back-stabbing, money grubbing liars that care nothing of the US of A unless you're the Koch brothers or Grover Norquist or Adelson who can buy the elections for them. All 535 in Congress are just plain "worthless".

19shane
19shane

-Cut Defense spending - U.S. defense spending amounts to more than the next fourteen largest military spending countries combined - the F22? never flown a mission in combat. Its production also cost twice what it was estimated to cost. After 'upgrades' and 'research development' it cost taxpayers $412 million, for each of them.-End corporate tax loopholes - 2005-2008 Goldman Sachs reduced its federal income tax by $1.8 BILLION dollars, Apple saved $1.6 BILLION, HP saved $850 million. How? Corporations can write off stock options.-Decriminalize, tax and regulate marijuana - ending the prohibition of marijuana would save the US $7.7 Billion annually, not to mention free up our court system and prisons - prisoners would require lawyers to overturn their sentences (increasing the need for lawyers)-Force Congressional pay cuts!

Leftcoastrocky
Leftcoastrocky

An austerity budget in a still weak economy would drive the economy into a Second Great Recession and thereby would be counterproductive

Leftcoastrocky
Leftcoastrocky

If you replaced the Tea Partiers in the House with non-crazy (even conservative) republicans we would have a budget deal.

brnhut
brnhut

When did this nation become one that vilifies success and justifies spending other people's money because they have more of it?  I am a happy worker in the fourth quintile that views the takers with disgust.  I understand people need help, but unemployment pays too well!  The spoiled brats consider certain jobs beneath them, and are content to sit on their ample posteriors and wait for the gov'ment checks.  As soon as you justify the argument that "from each according to what they can give, and to each according to their need" is a valid approach even in small bites, you lose the motivation from people receiving.  47%?  More like 50.3%.  Sick of the attitude from what appears to be the majority.  Thanks, education system...

JamesWordsmith
JamesWordsmith

As this article clearly shows,  the Federal Government has gotten too big to manage effectively by DC politicians.  It's trying to do too many things, promising too many things without the money or resources.  

Jumping of the "fiscal cliff" will be better than "kicking the can"as has been the case for years.  At least spending cuts will happen for once.

JoeDavis
JoeDavis

What is the need for more taxes?  Cut taxes, cut spending, cut dependence on foreign investors, cut dependence on the gov't for handouts, cut waste, cut fraud, cut give-a-ways.  Do you not understand what is going on?  Just yesterday I read we are giving Egypt 10 new F19 fighter jets, the optional word there is "give" if you did not get it.  Our gov't gives money away for no good reason.  Another question, just a simple one, why do we give cell phones to people?  That little modest expenditure has increased to around 3-4 BILLION  a year.  You want to raise taxes on the weathy.  I believe we should be cutting taxes and cutting spending to the bone, but after the last election, I have decided  you cannot fix stupid so I expect we will raise taxes and continue to give the revenue away to those who pay none. 

MichaelShields
MichaelShields

I think its time our elected officials start leading by example and make deep cuts to their own retirement packages and go on medicare before they even begin to compromise what I've worked 45 years toward my meager retirement.

gvasend
gvasend

This matters about as much as rearranging deck chairs on the Titanic as is sinks...

RonHolliday
RonHolliday

the only reason the negotiations are complicated is because these politicians (not leaders) REFUSE to stop spending.  obama has vilified the successful in a way thats never been done in the history of the US. It's disgusting. The rich, as shown by these CBO numbers below already pay for just about everything. Taking more of their money is nothing more than theft. If you allow it to happen to them, you can one day expect it to happen to you because we're spending too much on stuff we don't need. Now we're simply unable to pay for the things we really need. All because of these idiot politicians who just can't stop spending.

When you add up all of the various taxes, and look at the effective tax rates, it is clear the tax system is already pretty progressive. Everyone pays some tax, even those who pay no federal income taxes, and the wealthiest pay a larger percentage share of taxes. Here’s the effective tax rate for all of the groups, according to the CBO:Lowest quintile (23.4 million taxpayers), zero to $18,900: 4.3 percentSecond lowest quintile (22.4 million), $18,900-$32,100: 10.2 percentMiddle quintile (22.9 million), $32,100-$47,400: 14.2 percentFourth quintile (23 million), $47,400-$71,200: 17.6 percentHighest quintile (23.6 million), above $71,200: 25.8 percentTop 10 percent (12 million), minimum income of $98,100: 27.5 percentTop 5 percent (5.9 million), minimum income of $134,400: 29 percentTop 1 percent (1.1 million), minimum income of $332,300: 31.2 percentTop 1% pay 38.02% of the tax burdenTop 5% pay 58.72% of the tax burdenTop 10% pay 69.94% of the tax burdenTop 25% pay 86.34% of the tax burdenTop 50% pay 97.30% of the tax burdenBottom 50% pay 2.7% of the tax burden

JoeDavis
JoeDavis

If the Democrats want to raise taxes, let them.  Republicans can come in January vowing to fight to reduce taxes that the Democrats just allowed to rise.  They let the  Obamacare taxes rise on medical devices, they let the taxes rise on insurance premiums to offset the cost of not denying coverage to individuals, they let taxes rise on estate taxes, on the dead, they let taxes rise on the elderly whose dividends they depend on to supplement their retirment incomes, the Democrats let taxes rise on everyone who pays taxes to subsidize those who pay no taxes.  That is the Democratic way of thinking.  Tax the working man and give it to the one who does not.