The more I consider the strategic decisions coming out of the GOP camp, the more it seems as though the Republicans are chasing a pot with a 2-7 off-suit in the pocket. The Republicans have expressed public frustration with the offers coming out of the Obama administration and refused to accept the suggestion of their RCCC chair Tom Cole, who is urging his caucus to agree to President Obama’s public plea to extend the middle class tax cuts now and then negotiate from there. Republicans are concerned that this will forfeit all their leverage in negotiations, after all that would make the entire discussion about protecting tax cuts for the wealthy, but they seem to forget their biggest problem.
In January, Obama becomes a tax cutter, instead of a tax cut extender. Right now the debate is focused on the tangible, but abstract risk that taxes will go up for the middle class starting in January. It’s hard for the average American to grasp the significance of this to their pocketbook. But if we go past the fiscal cliff deadline, everyone’s tax rates go up and suddenly the President occupies the role of tax cutter. And when Americans are losing money week after week, their patience for an opposition party telling them “we won’t agree to cut your taxes until the President agrees to granting a tax cut for millionaires,” will wane dramatically.
And when you consider the fact that President Obama can champion the idea that whatever tax cuts eventually get passed can be applied retroactively, Obama becomes the tax cutting Messiah struggling to relieve the burden placed upon the American people.
If the Republicans agree to the President’s plan before January they can claim that they protected the Republican-created tax cuts for most Americans. If this reaches into January, Republicans will get no credit for reaching an agreement. Didn’t they learn this lesson in the 90s when Gingrich shut down the government and the only result was Bill Clinton becoming much more popular?
The Republicans need a basic course in negotiation strategy. Here’s a list of pitfalls to avoid when negotiating provided by the Stanford School of Business. There’s a couple relevant to the Republican failure here.
Successful negotiators make detailed plans. They know their priorities — and alternatives, should they fail to reach an agreement. You must know your bottom line, your walkaway point.
Well, Eric Cantor, who is the lead GOP negotiator in bipartisan talks headed by Vice President Biden, has already walked away from the talks citing any tax increase as a dealbreaker. This is a reasonable walkaway point if taxes weren’t going to increase on everyone if he doesn’t reach a deal. Is this walkaway move supposed to scare the Democrats into giving up? Because given the result of the election where Democrats won more votes nationally on a platform of tax increases, the Dems aren’t really going to move on that.
With the coming January shift that would only strengthen Obama’s position as described above, the Republicans probably should go back to the planning stage.
Failing to pay attention to your opponent
Negotiators need to analyze the biases their opponents bring to the table. How will they evaluate your offers?
One way to get inside your opponent’s head and influence his attitude is to shape the issues for him, a technique called “framing.” If you get your opponent to accept your view of the situation, then you can influence the amount of risk he is willing to take.
The only party in this negotiation engaged in any framing is President Obama. The public message of “let’s just pass what we agree on now” is incredibly reasonable and is shaping the public pressures on Republicans. The Democrats have achieved wild success framing this entire debate as “Democrats protect 98% of America, Republicans are holding America ‘hostage’ for the benefit of the 2%.”
Here’s a life lesson — if the mainstream conversation is labeling you as a hostage taker, you’re losing.
The only effort Republicans are making to frame the negotiations is by casting President Obama as “overreaching” and when most Americans voted for Democrats that seems like a really weak frame.
My advice? Republicans should come back with a plan offering to extend the middle class tax cuts immediately, an agreement to increase taxes on the wealthy by about 1/2 what Obama wants, coupled with a big corporate tax cut, a series of specific budget cuts, and a willingness to accept the Buffett Rule which is incredibly popular and not significant enough to oppose. By pushing the corporate tax cut, the Republicans can fudge the issue of whether they are really “raising” taxes and have a much much stronger argument for the idea that a tax cut can create growth.
But they won’t…they’ll take us over the cliff and then watch Obama become even more powerful.