Decide early as you prepare for an important negotiation, does the situation call for you to compete, collaborate, compromise, avoid or accommodate. All strategies have a time & place.
Negotiation Blog - Interests
Law & Order Viewers Learn Bargaining
By Marianne Eby
For the last 20 years, the popular television American crime drama Law and Order has taught hundreds of millions of viewers in 19 countries about US criminal law. What those viewers may not realize, however, is that they have also become quite familiar with the nuances of negotiation strategies that apply to commercial and internal negotiations as well. Watch this show and you'll improve your own bargaining skills, maybe even earn your get out of jail free card.
Since trials are expensive and unpredictable, both sides in any legal dispute—including criminal cases—try to reach a settlement before resorting to court. A plea bargain, as its name indicates, is an agreement on the plea the defendant will enter; in exchange for the simplicity and efficiency of a guilty plea, the prosecutor will make some kind of concession in the punishment.
We may forget that plea bargaining is just bargaining. What’s different about it, and what makes it so drama-worthy, is that the consequences are life binding. Instead of the parties negotiating over money, scope and terms (the traditional objects of commercial bargaining), they are often trading the parameters for criminal punishment — jail time, psychiatric treatment, or another kind of restriction. Money can play a role as well, in terms of fines, relinquished assets or victim compensation, but nothing gets more heated than when the primary concern is our freedom. With such heightened stakes, the plea bargaining on Law & Order surreptitiously involves and instructs viewers in a number of issues that arise in all bargaining.
First, the likely negotiation strategy for plea bargaining in a criminal case would seem to be competitive rather than collaborative -- defendants certainly value the outcome more than their relationship with the prosecutor. And, at first glance, it may appear that the opposing sides in a plea bargain are of unequal strength, which should lead to a one-sided negotiation.
But regular viewers of Law & Order come to understand that the complex variety of cases and their handling by attorneys who work with each other regularly can complicate the bargaining process and lead to a variety of negotiation strategies -- from competition to compromise -- depending on the case. Though the prosecution has all the resources of the police and other government agencies on its side, the defense has some advantages. For instance, it need not prove the client’s innocence, only raise reasonable doubt about the state’s claims of guilt. Defendants are also often able to gain concessions on jail time and other penalties by assisting the state in other prosecutions.
Plea bargaining on Law & Order also gives us a clear view of the difference between a negotiator’s position and interest. The defendant's position is his or her plea -- guilty or not guilty. But it is in his or her interest to consider a different plea, based on the likelihood of conviction, if it will reduce his or her sentence. The defendant's interest can include things like less jail time, confinement at a particular facility, lower bond, dropped charges, etc. Also lawyers can have different interests than those of their clients -- defense attorneys are paid more if they go to trial, and always need to maintain a good relationship with the prosecutor because their next deal may depend on it.
The prosecution’s stated position is that it must punish the defendant for his/her crime. Its interest, however, is in curbing crime generally, sometimes by using information from lesser criminals to successfully prosecute more serious offenders, information they are willing to trade for a reduced sentence. On “Law & Order,” consideration of this sort of trade is often presented as a moral dilemma, pitting the greater good against justice in a particular case.
Law & Order also gives viewers a sense of the nuances, timing, and performance of a skilled negotiation. The attorneys on the show (and the viewers) enter a plea-bargaining process knowing the facts of the crime, the evidence, and the law. But we know after several episodes how equally important is the understanding of the other side's histories and tendencies for well-timed offers and proposals, and skillful responses.
If no bargain can be struck, both parties have the same Best Alternative to a Negotiated Agreement (BATNA)-- a trial, with high costs and risks for both sides. But regular viewers of the show know they need only wait for the next episode to see another negotiation unfold.
Politicians' Negotiations -- What Can We Learn?
By Thomas Wood
Whatever the nature of our negotiations (commercial, legal, regulatory, internal, etc) we can learn from the ups and downs of some of the most prominent public negotiations. With the Euro in serious trouble and economies worldwide shaken, government negotiations over economic strategies are around the clock and very public. The US negotiations over federal budgets, taxes and spending are a prime example.
With several US significant tax and spending provisions set to kick in (or lapse) in December and January, official Washington will be furiously bargaining at year’s end. And the stakes couldn’t be higher: the fate of the US national economy, the credit rating of the U.S. government, and the confidence of the American people in their elected representatives’ ability to tackle big problems.
In last summer’s negotiations, President Obama and the Congress' House Speaker John Boehner came close to striking a “grand bargain” on long-term debt reduction. It combined restrictions on the growth of entitlement programs (which are trades dear to the Democrat party) with increased taxes on the wealthy (which is anathema to the Republican party). But at the last minute the deal fell apart. Examining elements of this failed negotiation through the prism of Best Negotiating Practices may well provide insight into what could happen at the end of this year, as well as provide guidance for our daily bargaining.
The 2011 budget talks were prompted by a deadline—namely, the need to raise the US government’s debt ceiling so it could borrow more money to pay its bills. Congressional Republicans used this deadline to try to force concessions: they refused to increase the government’s borrowing authority without obtaining agreement by the Administration to substantial budget cuts. While absolute deadlines can be helpful in focusing energy and avoiding unnecessary delay, skilled negotiators can also use arbitrary deadlines as tactic to gain advantage.
The Republicans took a position opposed to any tax increases. The President’s position was that he would not accept the level of cuts in entitlement programs sought by the Republicans without an increase in taxes on the wealthy. For both sides, the interest was to achieve debt reduction while maintaining the support of each party’s political base. Negotiators sought a solution—as good negotiators should—that served the two parties’ interests, even if it seemed to violate their positions (raising taxes by closing loopholes rather than raising rates, for example).
When the deal collapsed, Democrats charged that Boehner had lacked sufficient authority to bargain, and had been overruled by his Republican colleagues in the House. Negotiators should always have sufficient authority to strike a deal, but not absolute authority: carrying limited authority allows them to postpone or deflect unwelcome proposals. In the end, both sides decided that no deal was better than what they viewed as a bad one. They could both revert to the same, ready-made Best Alternative to a Negotiated Agreement (BATNA): elections, in which each side might achieve at the polling place what it couldn’t at the bargaining table.
While political negotiators in each country and all governments have special advantages and restrictions, everyone involved in negotiation can benefit from studying their successes and failures. It will be interesting to see if the US federal budget negotiators busy later this year are among those who have learned anything.
Three Possible Next Plays in Deflategate
By Marianne Eby
Deflategate continues to enlighten us -- not just about American football, or alleged scandals, or even the science of air pressure in balls in cold weather -- but about what happens when parties can’t reach a negotiated solution to their dispute. Last week opened with an appeals court reinstating New England Patriots' quarterback, Tom Brady's 4-game suspension, and ended with a court filing by the Brady team. The many plays that have occurred and the ones yet to come demonstrate the perils of litigation, the power of having a Plan B or BATNA, and that there is still benefit to and time for a negotiated solution.
When my colleague at Watershed Associates, Leslie Mulligan, wrote about Deflategate in July and again in September 2015, she quite rightly predicted that we have not seen the last of the NFL v. Brady case. She exposed the various stakeholders and their potential interests – why they might want what they are demanding. She also talked about the parties’ Plan Bs, or BATNAs (best alternatives to a negotiated agreement) – what moves they might make if no agreement is possible.
What Leslie couldn't know then was how the 2015 NFL season or the appeal of a lower court decision would ultimately play out, and what would be the next moves by parties who so far had not found common ground on which to negotiate a resolution of their differences.
The parties in court are technically the National Football League (NFL) Management Council, and the National Football League Players’ Association (NFLPA). The parties who everyone talks about are NFL Commissioner Roger Goodell and the star quarterback Tom Brady. Brady’s football team, the New England Patriots, are involved as they certainly care about winning games (and the revenue) that could be impacted by a suspension of Brady for his alleged role in the scandal. Roger Goodell is under great pressure to keep the League’s owners satisfied with his leadership decisions and equal treatment among teams, so the other teams’ owners are major stakeholders. And of course the NFLPA needs to demonstrate that it will protect the rights of the players, like Brady.
These parties chose to execute their litigation BATNA to resolve this dispute rather than negotiate a solution. As a former litigator myself, I know well the perils of litigation. Negotiation can be win-win or win-lose, but litigation is almost always lose-lose, and it has played out exactly that way in Deflategate.
The parties’ BATNAs in and outside the courthouse have continued to unfold. Last week a panel of the U.S. Court of Appeals for the 2nd Circuit reinstated the 4-game suspension issued by NFL Commissioner Roger Goodell against the New England Patriots' star quarterback, Tom Brady. This is probably not the final play in what has been a drama filled game of questionable tactics.
Unlike litigation, negotiating a settlement of their dispute had the potential to put the solution within the parties’ control. They could have mutually determined how they would be perceived, their investment of resources (15+ months, lawyers fees, personal time and stress) and the ultimate outcome. Litigation, on the other hand, held the potential to declare a final winner and a loser, raising the stakes significantly. Sometimes implementing the BATNA of litigation is the only way to satisfy our interests, but it usually comes at great cost to both parties.
There are always winners and losers, but it’s the Interests that underlie the wins and losses that really matter.
With commentary from me on what really mattered throughout Deflategate, let’s review Brady's win-loss record on and off the field, and in and outside the courthouse, and what was really at issue in each stage of this game since January 2015.
Jan 18, 2015 - Tom Brady leads the Patriots to win 45-7 in the AFC Championship game.
►What matters? Brady is a star football player and key to the Patriots' win record. A defeat of this magnitude certainly doesn't come about from pure ball tampering, but it does leave others wanting pay-back.
Jan 23, 2015 – NFL announces investigation into allegedly deflated balls (or as it turned out, possibly one ball); Deflategate is born!
►What matters? NFL’s interest here is ostensibly the integrity of the game.
February 1, 2015 - Midway through the 4th quarter of the 2015 Super Bowl, the Patriots are down by 10 points, but Brady isn't resigned to lose. Brady leads the Patriots to victory as Super Bowl XLIX champions.
►What matters? Brady and the Patriots don’t need deflated balls to win.
Brady loses 3 consecutive moves
May 2015 – NFL issues harsh penalties. Brady gets a 4-game suspension to take place in the 2015 season for his alleged role in Deflategate. The NFL also imposes a $1,000,000 fine on the Patriots and takes away the team’s first and fourth round draft picks.
►What matters? The official interests seem to be that the NFL won’t cover up even alleged complicity by one of its superstars and that it doesn’t “play favorites” with the teams. But there is a behind the scenes interest as well – that Goodell is beholden to all teams’ Owners and they haven’t forgotten past cheating by the Patriots.
June & July 2015 - Arbitration of an internal NFL appeal: NFL Commissioner Goodell, acting as the arbitrator, denies Brady’s appeal and upholds the suspension.
►What matters? The NFL’s power to conduct the investigation as it saw fit and issue penalties as it deems appropriate are paramount to its leverage with the players’ association.
Minutes later? Beating Brady and the NFLPA to the courthouse door, the NFL files a lawsuit in US District Court in New York to affirm the arbitrator’s decision.
►What matters? NFL files in NY to avoid ending up in a Minnesota federal court that has been more friendly to players.
Brady wins 3 consecutive moves
Brady is unstoppable throughout the 2015 NFL season.
Sept 3, 2015 – Federal District Court's Judge Berman vacates Goodell's decision and rules in favor of Brady. The Judge urged the parties to settle. Berman finds legal deficiencies that were fatal to the NFL’s suspension (inadequate notice to Brady of the possible punishment, lack of access to investigative files, and not letting Brady examine the lead investigator).
►What matters? Goodell’s conduct (rulings and decision) at the hearing are deemed unfair and in breach of the collective bargaining agreement.
The NFL didn't try to stop Brady from playing in the 2015 season, and the Patriots ultimately secured the AFC East Division title.
Around the same time, the academics finally weigh in. MIT professor John Leonard releases his study of the data – the math and the football – and he concludes that “no deflation occurred and the Patriots are innocent. It never happened.” It’s all over YouTube: MIT Professor Debunks Deflategate. And Harvard Business School has around a thousand students grapple with a case study about Deflategate, developed by professors Marco Iansiti and David Sarnoff. Iansiti comments:
“The data are the data. A lot of the proceedings are now frankly more about the power relationships between different stakeholders in the whole environment, and less about what actually happened with the bloody footballs.”
►What matters? Brady and the Patriots have multiple moral victories that no court can erase. It’s clear that Deflategate is all about the power of the organizations involved, and litigation, as is often true, is only a vehicle to increase or avoid losing that power.
December 22, 2015, the NFL files an appeal to the US Court of Appeals for the 2nd Circuit. And in January Brady and the Patriots lose the AFC Championship to the eventual 2016 Super Bowl champions, the Denver Broncos.
►What matters? The NFL’s power to enforce its decisions is paramount to its leverage with the NFLPA, regardless that the facts favoring Brady are mounting. On appeal, the law matters (not the facts), and winning on the field is as unpredictable as court.
March 2016 – Brady renegotiates his salary to include a $28M signing bonus for his $60M multi-year contract.
►What matters? Brady reduces his year-1 salary to $1M and thereby ensures that he protects a large portion of his earnings with a signing bonus the NFL can’t touch in the event that the 4-game suspension is reinstated on appeal, after the questioning at the hearing on March 3 didn’t bode well.
Goodell hedges on whether the NFL will enforce Brady’s suspension if the NFL is successful on appeal.
“That is not an individual player issue,” Goodell said then. “This is about the rights we negotiated in our collective bargaining agreement. We think they are very clear. We think they are important to the league going forward and we disagree with the district judge’s decision.”
►What matters? The NFL’s real interest is in protecting its rights under collective bargaining agreements; the facts aside and well beyond the implications for Tom Brady.
Apr 25, 2016 – US Court of Appeals for the 2nd Circuit in New York issues decision overriding Judge Berman and reinstating the Brady’s suspension, with one dissenting opinion.
►What matters? Judge Berman’s improper application of the law in overturning Goodell acting as arbitrator of his own decision. The NFL’s power in collective bargaining is re-established.
Brady holds the #1 spot for sales of NFL players merchandise for the 2015-16 season.
►What matters? Since his initial suspension, Brady surpassed both Quarterback Peyton Manning’s merchandise sales even though Manning led the Denver Broncos to be Super Bowl champs in 2016, and the merchandise sales for Russell Wilson, quarterback for the Seattle Seahawks, who held the #1 spot for the previous 2 years. The players get 2/3 of the money from the merchandise sales. One could conclude from this that Deflategate improved Brady’s reputation rather than hurt it.
What are the parties' next moves?
Who wins or loses next? More importantly, what really matters?
The NFL wants happy fans, the assurance of power in its collective bargaining agreements with the players’ union, and increased revenue. The NFL has lost a great deal of respect to protect those interests. Tom Brady is by all measures a star football player, but he wants to go down in history as an honest football legend, not to lose income, and as a winner on and off the field.
Will the parties rely again on the strength of their BATNAs, or will they finally see that their interests can be addressed in a negotiated agreement – that they can move from lose-lose to win-win?
Here are the 3 possible next plays in Deflategate:
- Goodell and the NFL retreat
Goodell and the NFL could reduce the suspension or choose not to enforce it against Brady, having adequately secured confirmation of Goodell’s power and the NFL’s rights under collective bargaining agreements.
- Brady and the NFLPA advance
Brady and the NFLPA could ask for a stay of his suspension and seek to get a majority of the 13 active judges in the 2nd Circuit to agree for all 13 judges to review the 3-judge panel’s ruling. Or Brady and the NFLPA could seek an appeal to the US Supreme Court. Neither option has a great chance of success.
- What if the parties negotiate a solution and regain control over the outcome of this dispute.
The mere threat of filing an appeal could act as leverage to get the NFL to negotiate a settlement that releases the suspension. Brady and the NFLPA have just strengthened their leverage by showing a willingness and ability to execute their BATNA of filing an appeal; they officially added Theodore Olson to their legal team, a former U.S. Solicitor General who has argued before the Supreme Court 62 times.
The NFL has won the legal issues at this juncture, and may want to avoid any risk of a further appeal, given the strong dissent by Judge Katzmann, who found the Commissioner breached his authority.
Brady doesn’t have much more to gain even if he wins the next court decision, given that his popularity actually increased during Deflategate, the Patriots re-signed him and helped him avoid most of the financial hit a suspension will impose, and there are many experts who question not just the NFL’s actions during Deflategate, but the evidence itself, leaving Brady’s integrity largely intact.
Of course Brady and the Patriots want to win football games, and the team’s chances of reaching the playoffs in the upcoming season are increased if Brady plays those first 4 games. But that outcome is attainable in a settlement, and does not need a court decision. We don’t know what are the parties’ next moves, but we can be pretty sure everyone wants to see more of Tom Brady playing football, especially when he may not have many seasons left.
3 Key Negotiation Issues to Watch in Deflategate
By Leslie Mulligan
Will Tom Brady or Roger Goodell come out the winner in the NFL's DeflateGate? Who has the skills and strategies to win the next round? Get your tickets because this negotiation is a game everybody is watching.
NFL camps are opening this week all over the US, and football-hungry fans are getting excited about watching their teams – and favorite players – on the gridiron again. One huge problem hanging over the start of the season: what will happen to much-beloved Tom Brady, locked in battle with NFL commissioner, Roger Goodell and the "ownership powers that be," over DeflateGate? Did Tom Brady break the rules with football deflation in the AFC championship game, and if so (or even if he just “covered up” potential evidence), what punishment fits this crime?
The NFL handed down a 4-game suspension back in May 2015 and the players' union, NFLPA, appealed in June. Just this week, Commissioner Goodell upheld his decision: the 4-game suspension stands. But the questions may linger - what is fair in this situation, and what will be accepted by those football-hungry fans, especially when Tom Brady was just announced as the #1 seller of NFL merchandising for Q1 this year, from the NFLPA’s Top 50 Player Sales list.
How can Roger Goodell and NFL ownership keep fans happy, while retaining control over league activities? The balance of power is intriguing. – can a win-win be reached between the NFL and Tom Brady’s camp, especially now that Goodell has solidified his position with his latest ruling? Here are the issues to watch.
Stakeholders are Issue #1 to Watch
An essential concept in negotiations is to manage your stakeholders, in part by recognizing and hopefully meeting their interests: Goodell has a number of stakeholders, and their interests are not necessarily aligned. The NFL (and NFL Owners) makes close to $10B in revenue a year, with an aim of reaching $25B by 2027 – the top professional sports league in the world.
And they pay Goodell handsomely; in 2012, Goodell’s salary was $44M (this is the last published salary, as after 2012, the NFL relinquished its tax-exempt status and closed ranks on disclosing salaries). Goodell clearly wants to keep the owners happy! In fact, at least two of these very powerful owners lobbied hard to uphold the 4 game suspension – Jim Irsay (Indianapolis Colts- the team that lost to Brady in the infamous game) and Steve Bisciotti (Baltimore Ravens). So it is no surprise that Goodell doubled-down on his decision this week.
Tom Brady’s last contract was $57 million over 5 years – orders of magnitude lower than NFL revenue and less than Goodell’s own salary, but in the court of public opinion, Brady’s power is significant. The NFL assuredly wants to keep all of those jersey-buying fans happy too, as their zeal fills the owners’ cash registers. It seemed as if the majority of fans wanted Brady’s suspension lightened if not lifted – that will play out on the airwaves in the coming days, as we see how fans react to Goodell’s decision.
Interests are Issue #2 to Watch
Both sides of this conflict have myriad interests in play. It is essential to understand and prioritize your interests, and determine what is driving the other side, in order to attain a win-win outcome in any negotiation. Goodell clearly wants to keep the NFL owners and the fans happy, but he has a self-serving interest too: he wants to preserve his reputation and legacy as an outstanding Commissioner. His reputation has taken repeated hits lately with various league scandals. As he ponders next steps, surely he wants to avoid second-guessing in the media, questioning his leadership. How his decision to uphold the suspension preserves, or sullies, his reputation remains to be seen.
Tom Brady is also very interested in self-preservation – he values his earnings potential both as an NFL player but as a champion endorser too! If he is viewed as a cheater, his short-term income from promotions, commercials and other sponsorships may dry up. In 2013, Brady's endorsement income was $7M, not too far below his NFL annual salary.
But probably more important to Tom Brady than his marketing potential is his legacy as one of the best, if not the best, quarterback to have played the game. He went on record in January to proclaim he was not a cheater. The new information that he had his cell phone destroyed after the investigation began raises the stakes for him. He wants to be in the pantheon of immortal NFL players, and with 4 championships under his belt already, he was on his way. It is no surprise that Brady wanted the entire 4-game suspension wiped away – with the recognition that he did not cheat. So his interest is clear, but how to best achieve it?
BATNAs are Issue #3 to Watch
Tom Brady and the NFLPA have one major lever – their BATNA! In this case, their Best Alternative To A Negotiated Agreement, or Plan B, is to take the NFL to court. And they have been clear that they are willing to do just that: they are willing to execute their BATNA and go to court. BATNAs are most powerful when the other side believes you have a strong Plan B (or more than one alternative, even) and are willing to execute it. Back in June during the initial appeal, Brady’s defense attorney publicly stated that they have a strong case, and many in legal circles agree.
The NFL has a lot on the line; some recent NFL investigations did not go so smoothly (remember the Ray Rice case), but Roger Goodell has shown that he is also willing to execute his BATNA. The last thing that Roger Goodell and the NFL probably want is a protracted legal proceeding, including all that might come out in the Discovery phase of litigation, but that seems to be the path we are on. Just a few days ago, Forbes published an article that suggests Brady and team will prevail in court. If that's an accurate assessment, Goodell's priority must be keeping his stakeholders happy at this stage.
One hope is that cooler heads will soon prevail, as an underlying, common Interest in play for both parties should be a speedy resolution. Brady assuredly wants to get on the field – he only loses $2M if he misses all 4 games, but he would snap his 13-year record of season opening starts. And Goodell would like to open the NFL season with happy fans (and happy owners). But for the moment, we are at the stage of litigation threats. It will be fascinating to see how this unfolds.
We will know soon enough if they are able to pull back from their BATNAs and negotiate some form of a win-win solution. Interests and stakeholders are now well understood; opening and counter-offers have been made and BATNAs revealed. Let’s hope they focus on Best Negotiating Practices rather than legal tactics in the near term, and close the books on this rapidly, so that the start of the American football season can kick off happily for all parties - especially the fans!
Negotiating Covid Relief – Politics in Play
By Leslie Mulligan
Businesses had to sharpen their negotiation skills as markets and supply chains endured enormous pressure in 2020. Now it’s the U.S. president’s turn to demonstrate his negotiation expertise in passing the $1.9 Trillion Covid-19 Relief Bill. Is he willing to collaborate with Congress, or will he take on a competitive approach? And how will the Republicans respond?
President Biden has made it his mission to tackle the devastating pandemic – it is the very first priority listed on the White House website. Specifically, he has vowed to get the massive $1.9 trillion coronavirus relief package passed in U.S. Congress and ensure Covid vaccines are distributed as rapidly as possible. Time is of the essence as the economy remains weak; many still face desperate times. Yet President Biden has also pledged a bipartisan approach to governance and wants to unite the country – so how do you negotiate effectively with Congress in this still polarized landscape to deliver on these promises; or do you?
Will a collaborative (win-win, interest-based) or even compromise approach produce bipartisan approval, or will the Administration have to take a competitive approach (win-lose) to get results.
Emerging from the last presidential election, the USA is seriously divided, no doubt about it. Yet President Biden is on a quest for unity, including in his Congressional relationships. As a long-serving alumnus of the Senate, he underscored the need for bipartisanship: “I think I can work with Republican leadership in the House and Senate. I think we can get some things done.” But will Republicans reciprocate – will they work with the president and their Democratic colleagues? We don’t know what is happening behind the scenes, but the president has only publicly met with 10 Republican senators in early February to discuss the Covid relief bill. And Republicans have felt rebuffed by their
Congressional colleagues: “…they were frustrated that their views weren’t being considered as Democrats pushed the legislation forward without GOP support”. This may foreshadow a competitive stance.
And yet, President Biden has the support of the American public writ large – even Republicans: “Half of all Republicans believe that President Joe Biden's $1.9 trillion COVID-19 relief package should be passed because of the proposed round of $1,400 stimulus checks, according to a new poll.” 73% of all Americans support this bill, according to a Navigator Research poll last week. Bipartisanship can be achieved in the public domain – that has certainly been realized in the run-up to the passage of this bill. But will any congressional Republicans come on-board? Jen Psaki, the White House Press Secretary, put this question succinctly when asked about Republican support: “Obviously, Republicans in Congress will have to make their own choice about whether they support the final package. But the vast majority of the public supports it, including the vast majority of most members’ constituents. So it’s really a question for them.”
But will Democrats entice them to support a negotiated bill, with a willingness to compromise by giving in on some of what’s been proposed, if not collaborate by finding new solutions that satisfy both parties? Or simply use a heavy-handed competitive approach to get what they want. The overriding negotiation strategy used here may set the tone for the next 4 years.
Time is almost always a factor in negotiations. There is an adage in negotiating – “deadlines force concessions”. And President Biden feels the pressure of a looming deadline. On March 14th, over five million people will lose their weekly $300 federal unemployment benefit. The PPP program runs out for small businesses on March 30th, and the airline industry may take a big hit as $15B in federal funds that subsidize payrolls also expires. But will Congress feel the same pressure of this deadline? Assuredly the Democrats largely will. But Republicans may resist the pressure, advocating that previous stimulus bills have set the stage for recovery - the trajectory is positive. Could Republicans use time as leverage to get more of what they want? All politicians have a political calculus even while making policy decisions – how will these deadlines impact their negotiations across the aisle and with President Biden?
Policy vs Politics
Great negotiators know that their positions are driven not just by what they can conceivably achieve, but by a greater business or overriding imperative. The same is true in negotiations over legislation. Politics are the quintessential overriding imperative that drives what each legislator is willing to do.
“Negotiation in Congress is never solely about policy; politics and policy are always intertwined”, per the Task Force Report published in December 2013 by the American Political Science Association (APSA), Negotiating Agreement in Politics, which sheds light on the challenges of American political negotiations. There are valuable lessons in that report, with pragmatic advice for all parties at the Congressional negotiation table. One truism comes from former Rep. Barney Frank (D-MA): “Nobody pushes for unpopular policies.” And it appears that the Covid relief bill is popular! But elected officials manage their politics to keep their constituents (and donors) happy - they must justify their policy votes. Those up for reelection in 2022 will weigh their policy decisions now against a potentially different political landscape one year hence. In fact, news reports indicate that Republicans believe they are better served to deny President Biden a “bipartisan win” – and so are working to keep their own party cohesive, and plan their own PR push to paint this Bill as “bloated”, disparate and not well-aimed.
When defining any negotiating strategy, it is paramount to assess who your stakeholders and what their Interests are, and how they impact your plan. When it comes to legislation, there is no shortage of competing stakeholder Interests to address.
President Biden is banking on the American public as the most important stakeholder in this landscape. Most of them enthusiastically support this bill, and the timing is such that now is the opportunity to strike. Big business also supports quick passage of this Bill. Just this week, 150 of the country’s most powerful executives penned a letter to President Biden urging action: “Congress should act swiftly and on a bipartisan basis to authorize a stimulus and relief package along the lines of the Biden-Harris administration’s proposed American Rescue Plan."
Republicans may take the longer view, and assume that their stakeholders, their constituents, will accept resistance to this bill. After all, it may get passed even without Republican support. Then the subsequent policies will help everyone, without Republicans having to go “on record” as supporting a democratic presidential priority. “In short, explicitly partisan political considerations condition the opportunities for deal-making on policy issues,” suggests the learned authors of the ASPA report mentioned earlier.
No seasoned negotiator enters negotiations without a back-up plan, known as a Best Alternative to a Negotiated Agreement or BATNA. That means both sides of the political aisle have BATNAs in play that they are willing and able to execute.
Can the Covid relief bill pass without Republican support? Does President Biden have an alternative to a truly bipartisan bill, a BATNA in the lexicon of negotiating? Absolutely – after all, the Budget Reconciliation tool is available to him, now that Congress passed the Senate’s budget earlier in February. As long as the Democratic party stays cohesive, this enables passage of the Covid relief bill with only Democratic support. If Democrats prove each item in their reconciliation bill has a direct budgetary impact, this tool can be used to prevent Republicans in the Senate from filibustering and blocking the floor vote. So inasmuch as President Biden would like Republican support, it is not necessary for passage of this bill. His BATNA is strong, and he is willing to execute it, to ensure the needs of the American public are being met. Republicans too have their BATNA – they can decline to support this Bill, counting on their supporters to look positively on that decision down the road. This is a risk, but will they be willing to take it?
Negotiators come to the table prepared to trade. And President Biden has indicated some willingness to trade on the minimum wage – its inclusion in the Bill at all, a phased-in timeline to protect small businesses, and maybe even the new wage rate.
There are two factors that complicate this element of the bill. First, Senator Joe Manchin (D-WVA) has said he does NOT advocate for the full $15/hour – although he would support a reduced rate of $11/hour. Second, couple that with the fact that the Senate parliamentarian has ruled that as written, the minimum wage hike does not meet the threshold of having a “direct budgetary impact” – thus eliminating it as is from inclusion in the Budget Reconciliation Bill. This bargaining chip may come off the table entirely when the Bill reaches the Senate, or it may become a viable bargaining chip. The president has said he is open to negotiating the minimum wage. But cohesion among the Democratic senators will still be crucial on other elements of the bill, and keeping Senator Manchin in the fold may be a challenge that President Biden faces beyond just this particular legislation.
This bill will get passed, but probably with Democrats taking on a competitive approach ultimately and driving passage without any compromise. President Biden is willing to execute his BATNA and believes that his primary Stakeholder – the American public – needs the relief that it will provide, and will reward his Administration for it. Bipartisanship will have to wait, as the president feels the pressure of the March deadline. The Republican political calculus indicates that they too can take a competitive approach and won’t be penalized by their supporters. But this first interaction between the president and Congress may not bode well for collaboration between the two parties in the future. Time will tell, so stay tuned.