Common Sense: Negotiation Experts Consider How to Reach a Budget Deal

Here’s a simple proposal for America’s political leaders, now engaged in yet another round of contentious and seemingly dysfunctional tax and budget talks: a crash course in negotiating tactics. When I broached the idea to Daylian Cain, who teaches a popular class in negotiating at the Yale School of Management, he immediately volunteered to take his course to Washington. “I’ll show up with my PowerPoints and a bottle of Scotch,” he volunteered.

What might President Obama, House Speaker John Boehner and the Senate minority leader, Mitch McConnell, the most vocal participants in the latest standoff, learn? Perhaps that they’re falling into some classic but avoidable pitfalls, and that they could achieve some of their most important goals without subjecting the financial markets, the American people and the global economy to yet another high-stakes and damaging game of chicken.

“This isn’t rocket science,” William Ury told me this week. Dr. Ury, along with Roger Fisher, who was a law professor at Harvard at the time, wrote the classic work on negotiating, “Getting to Yes,” and has been refining his insights at the Program on Negotiation at Harvard Law School. “It’s sad to watch this kind of brinkmanship,” he said. “There are plenty of ways to arrive at a good, responsible agreement that’s satisfactory to each side and, above all, is good for the country. You could put some high school students together and they could do it.”

Seth Freeman, who teaches negotiation and conflict management at Columbia Business School and N.Y.U.’s Stern School of Business, added: “I’m marveling at the postures each side is taking, given the stakes. It gives you vertigo.”

Mr. Obama and the Republican leaders have shown scant evidence that they’ve absorbed any of the lessons that are now standard fare in the nation’s leading law and business schools. In each successive round of talks, they’ve expressed mounting anger and frustration, which only creates “huge and unnecessary obstacles to reaching an agreement,” Dr. Ury said.

In recent weeks, their positions seem only to have hardened. Mr. Obama said he wouldn’t even talk to Republican leaders about raising the debt ceiling, saying at a news conference this week that “they will not collect a ransom in exchange for not crashing the American economy.” This is a standard negotiating stance, which is refusing to even discuss an issue, coupled with some provocative name-calling, since the use of  “ransom” suggests that Republicans are pirates or hostage takers.

“That’s a very high-risk, high-return approach,” Professor Freeman said. “If you can convince the other side you are truly committed to your position and there’s no going back, and the other side believes you, you can win. But if not, and they call your bluff, you’ve got a Dr. Strangelove situation. I see similar rhetoric from the Republican side.”

Mr. Boehner has said he won’t engage in any more one-on-one negotiations with Mr. Obama, and both he and Mr. McConnell have said they won’t support raising the debt ceiling without addressing the deficit with spending cuts. They have also refused to discuss further tax increases, saying that Republicans are “done” with that after the fiscal cliff deal raised taxes on the wealthy.

So neither side is talking, both have staked out absolute, winner-take-all positions, and the nation is marching toward the prospect of default, an outcome that nearly everyone says would be catastrophic. Dr. Ury said Thomas Schelling, a former economist at Harvard, compared the standoff to two trucks hurtling toward each other. One driver rips out the steering wheel and throws it out the window.

“From a negotiation perspective, it’s a game of chicken and each side refuses to swerve,” Professor Cain said. “Basically, this tactic aims at claiming a large portion of the pie: ‘Give me everything or I walk.’ That’s a very aggressive approach, and doesn’t foster creative deal-making at all. There’s no communication, so there’s little chance for a win-win outcome. So far, this has been a vicious circle. Each round of negotiations has been worse than the last and has begotten hostility. Reputations are on the line. Obama is worried about being too soft, so he’s being super firm. Boehner faces a revolt in the House.”

Article source: http://www.nytimes.com/2013/01/19/business/negotiation-experts-consider-how-to-reach-a-budget-deal.html?partner=rss&emc=rss