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

100 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

gvasend
gvasend

@Leftcoastrocky Do you believe that if the budget is not brought under control, we will experience an economic meltdown?

tom.litton
tom.litton

@gvasend @Leftcoastrocky You do have to get the deficit under control eventually.

However, I've been convinced by Paul Krugman and others that now is not the time.  Borrowing costs for the US government are at an all time low, unemployment is very high, and our infrastructure needs a lot of attention.  It seems the best path forward is to borrow money in the short term to invest in infrastructure (and anything else that will make us more competitive globally, like education).  AND put a plan in place to bring down the deficit that kicks in when the employment problem is under control. 

gvasend
gvasend

@tom.litton @gvasend @Leftcoastrocky There is probably some truth to this. On the other hand, I would not offer dictatorship as the solution. I think the bottom line is that humans are imperfect and when human imperfection is combined with the political process it is not a pretty sight. I also think that we are suffering from our own success. We have achieved such relative success that we have lost focus. Maybe this is just a pattern of nature. 99% of all species that have existed since the beginning of time no longer exist. Things come and things go....

gvasend
gvasend

@tom.litton @gvasend @Leftcoastrocky The problem is that the politicians are pretty good about influencing people to control what they think they want and then "sell" it to them. Some pretty awesome marketing techniques are employed because it seems to work.

RonHolliday
RonHolliday

@tom.litton @gvasend @Leftcoastrocky tom, they do that now. promising gifts that we can't afford, consistently removing more and more people from the income tax rolls. The problem with democracy is that if the electorate is stupid, they vote stupidly, If they are criminal, they vote to take others' earnings. Look at the wonderful democratic lesson in Egypt. Democracy is only as good as its electorate and right now, our electorate is uneducated and entitled.

tom.litton
tom.litton

@gvasend @tom.litton @Leftcoastrocky Once you remove money, what they will be chasing is votes.  Which is the point of a democracy.  Those that do what the people want, get the most votes. 

it is, to paraphrase churchhill, the worst form of government, with the exception of all other forms of government.

gvasend
gvasend

@tom.litton @gvasend @Leftcoastrocky The plan you laid out sounds nice but the underlying assumption is that politicans desire to act (and will act) in our best interests. Politics and rationale behaviour are mutually exclusive. So, I submit that plan won't work because politicians can't be trusted to (or not competent to) execute it.

gvasend
gvasend

@tom.litton @gvasend @Leftcoastrocky What evidence can you point to that illustrates the governments (left or right) ability to make the tough political choices needed to bring the budget under control? That all assumes that politicians will act in our best interests instead of just worrying about the next election (Its only just 2 short years away). I don't understand why people have so much faith in politicians. It seems like so many people are just willing to take them at their word.

RonHolliday
RonHolliday like.author.displayName 1 Like

@Leftcoastrocky that's the politicians reasoning for continued higher taxes. Yes.

so the answer will always be,"we have to spend ourselves into oblivion because if we don't it will hurt the economy"

great reasoning there.

Leftcoastrocky
Leftcoastrocky

@RonHolliday @Leftcoastrocky   And how did we eventually escape from the Great Depression -- massive federal spending of WWII

(When you should NOT run up a big debt is when the economy is doing well.  That is, the Bush deficits during the first 7 years of his administrations were wrong.)

akpat
akpat

@RonHolliday @Leftcoastrocky We have to make big cuts and we have to increase revenue to balance but it needs to be done gradually otherwise we will tank once more, but the target should be a balanced budget in say 10 years.

Leftcoastrocky
Leftcoastrocky

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

RonHolliday
RonHolliday

@Leftcoastrocky the tea party wants smaller government and less taxes. If you paid taxes, you'd feel differently about them

tom.litton
tom.litton

@RonHolliday @Leftcoastrocky The thing that makes tea party crazy is that they won't accept anything unless they get everything they want.  They don't understand they will never get everything that they want.  They don't have the support.  They are just making it more difficult for congress to solve any of the countries problems.

RonHolliday
RonHolliday

@tom.litton @RonHolliday @Leftcoastrocky tom, that IS the problem with our country. We've sufficiently dumbed down the electorate so that they are easily swayed by politicians who speak well and tell them that if we just take more from their betters, everything will be ok.

I don't intend to take back the country, I intend to protect myself from it. Eventually the pendulum will swing back, the lower and middle classes will be crushed and the lesson of ridiculous governmental spending will be taught. I fully understand that I'm casting pearls before swine.

RonHolliday
RonHolliday

@tom.litton @RonHolliday @Leftcoastrocky  No, see Tom, thats where you're wrong. "regardless of who is correct" is a ridiculous statement.  

The choices are:

1. compromise and watch the country crash and burn after obama is out of office

2. plant the flag in the ground and take back the country by not letting these politicians keep spending.

This idea of compromise is for the less informed crowd. A true compromise would be letting the Bush tax cuts end for everyone (rolling them back to Bush era levels) and then rolling back spending to the same levels. The budget immediately balances at that point then the debt can be worked on.

sadly, that won't happen because politicians don't really want spending cuts and there are too many uninformed voters who think compromise is good.

tom.litton
tom.litton

@RonHolliday @tom.litton @Leftcoastrocky Regardless of who is correct, you will never get most of the country to agree with you.  The choices are:

1. Compromise.

2. Watch the country crash and burn.

It seems the tea party would rather go with option 2, which i think is crazy.

RonHolliday
RonHolliday

@tom.litton @RonHolliday @Leftcoastrocky Tom, the tea party is correct, not crazy. Politicians are killing this country. You don't negotiate with these politicians, you give them ultimatums. The Tea Party candidates are the closest thing Americans have had to a real voice in a long time. The problem with our country is spending. period.

brnhut
brnhut like.author.displayName 1 Like

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...

akpat
akpat like.author.displayName 1 Like

@brnhut So paying a little more in taxes back to say the Clinton level which was still lower than the Regean level is vilifying success ?

Perhaps if the people at the top paid the people at the bottom a bit more the people at the bottom could afford to pay taxes.

RonHolliday
RonHolliday

@akpat @brnhut nonsense, pat. you're a classic example of someone who's bought completely into vilifying success with your "Perhaps if the people at the top paid the people at the bottom a bit more the people at the bottom could afford to pay taxes." comment.

chosing just your betters to pay more is gutless and unamerican. Either we ALL pay more or we ALL pay less. you know, the way the Bush tax cuts were designed.

brnhut
brnhut

@akpat @RonHolliday @brnhut Capital gains = your 401(k).  It affects you too if you've done any planning...  How far out does this tax push your retirement?  Run those numbers and come back smiling.

RonHolliday
RonHolliday

akpat, The Bush tax cuts were a 5% across the board cut. Any other spin you want to toss out is simply a lie. 

akpat
akpat

@RonHolliday @akpat @brnhut The Bush tax cuts were designed to reduce taxes on the rich more than taxes on the poor. For example the level of icome tax gives greater reduction of taxes on the wealthy as a percentage than the poor. There has been plent of articles out there to show this.

Furthermore because of our margin tax system the rich and the poor pay the same level of tax for the  margin, the difference is the rich get into the top margins. the biggest cut for them was the reduction in capital gains along with the deferred roll over so you dont pay tax at all.

dont beleive me do some research.

brnhut
brnhut

@akpat @brnhut Invalid argument.  The economy in the Clinton era was booming, and it sure was not due the tax rates.  Take a look at business regulation, climate, and the fact that Clinton reached across the aisle and cut government spending by 25% before you attribute the economic circumstances to tax rates.  Dumb.  

brnhut
brnhut

@akpat @brnhut OK, I agree to across the board cuts.  Half disagree on the method of gaining tax revenue, I think growing the economy is a better way to gain revenue.  All told, we likely ended at agreement that will never be achieved by Congress and the president.  This is not leadership...and people want more government in their lives?  Sickening.

akpat
akpat

@brnhut @akpat Ss is not insolvent yet and if the feds paid it back the money they appropriated from it it would be ok.

Yes we need big cut backs but we are so far in the hole there is no way out but to increase taxes AND make cuts. Real cuts not the imagined ones.

akpat
akpat

@RonHolliday @akpat @brnhut Ron if you look at my post I'm all in favor of a 50% cut across the board but that has to involve the military, security complex because they are almost 1/3rd of the budget.

As for entitlements yo will see I think we need a 50% cut there along with a 100% cut inpork but I am against cutting SS/Med because people paid into that all their lives and are entitled to get it back.

The military are not entitled to another 4 billion dollar submarine.

Do you see where I am coming from ?

brnhut
brnhut

@akpat @brnhut We're at war.  SS is insolvent.  Medicare is insolvent since Obama raided it for his health care program. 

RonHolliday
RonHolliday

@akpat @brnhut uh, I hate to break this to you but government spending across the board has doubled, not just military and security.

akpat
akpat like.author.displayName 1 Like

@brnhut @akpat Miltary and security spending has more than doubled in 12 years to almost 1 trillion a year.

The way to cut entitlement spending is get people off welfare and if that means to say Apple and companies like them are penalized for manufacturing in Chinese swat shops by the US raising import taxes so be it.

As for cutting SS/med etc why would we do that. The funds are ok and will continue to be as long as the feds pay them back the 3 trillion and reasonable interest they leached from them to pay for defense.

brnhut
brnhut

@akpat @brnhut I agree to cuts in the budget, but believe reform needs to come to entitlements first.  Our corporate tax rates are some of the highest in the world, so I agree to cutting those.  Green energy is a weak concept, and we should not be picking winners with tax dollars.  Military spending is high, but due government inefficiency   Give more military spending to private business in a competitive environment and see how far you get with the same monies.  Complicated discussion that will not go far in short comments, but let's go.

akpat
akpat

@brnhut @akpat Sure they were good years and he did a good job Monika aside however to get back to those rates will require a 50% cut in militaty and security spending together with import taxes to put people here to work rather than in China.

Would you go for that ?

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.

brnhut
brnhut

@JamesWordsmith Agree.  At least until I see my first paycheck with the new Obamacare taxes and the removal of the Bush cuts, and realize it's still going to a lazy entitled.