Elementary negotiation theory and health care legislation

Pass something under reconciliation that improves the bargaining position of the good guys and weakens the bargaining position of the bad guys. Then sit down to negotiate.

1.  Health care legislation can avoid a filibuster and pass with 50 votes plus the Vice-President’s tie-breaker if it’s done via the budget reconciliation process.

2.  The Byrd Rule limits what can be done that way; the result would certainly be suboptimal compared to doing the same thing via ordinary legislation.  But that means 60 votes to break a filibuster.  That might be done with only Democratic votes if some Dems who plan to vote against final passage could be convinced that party loyalty ought to dominate their personal policy preferences or electoral calculations.  But that means giving every centrist-to-conservative Democratic Senator veto power.

3.  Basic negotiation theory starts with the question, “What happens if there isn’t a bargain?  How good or bad is that for each side?   In jargon, what is each side’s best alternative to a negotiated agreement (BATNA)?  The worse the BATNA, the stronger the need for a deal, and the weaker the bargaining position.

4.  Right now, the good guys want a bill and the bad guys don’t want a bill.  It’s hard to imagine any bill that’s better for Mitch McConnell than no bill.  So the obvious outcome of bargaining is no deal, or a very, very bad deal for the Democrats.

4.  So the obvious move for the good guys is to use the reconciliation process to make the BATNA better for Democrats, liberals, and the pro-health-reform interest groups better and – equally important – worse for conservatives, Republicans, and the anti-reform interest groups.  Once a bill passes under reconciliation that forbids some of the worst insurance abuses, heavily subsidizes health insurance for the poor and middle-income groups, raises taxes on the rich and on alcohol, and puts a cap on insurance-company executives’ pay, the balance of bargaining advantages reverses itself.  Now it’s the right that needs something else to pass.

5.   In this scenario, reconciliation isn’t a substitute for ordinary legislation but instead a prelude to negotiations about such legislation.  As Al Capone is supposed to have said, “You get more cooperation with a kind word and a gun than with a kind word alone.”

All this seems obvious to me, but all the journalism I see treats reconciliation and ordinary legislation as alternatives, rather than complements.

Can anyone explain this to me?

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com

7 thoughts on “Elementary negotiation theory and health care legislation”

  1. Nice post. Good analysis. I've wondered as well why we have to do acomprehensive bill. Pass something with the basics and the field tilts to the Democrat's advantage.

  2. Step 4 doesn't seem clear to me. In particular, you seem to be limiting the discussion to healthcare reform. An alternate option for the GOP would be, once a bill becomes inevitable, to change the subject to something else entirely — the war in afghanistan, financial-industry reform, ACORN, whatever looks like it will get the most traction. Control of the airwaves in a political war is much like control of the air in a physical one: you get to decide where and whether the big pitched battles will be fought.

  3. Brian Beutler at TPM quotes Mark Schmitt, editor of The American Prospect, and a former Finance Committee staffer, to report that the resistance to reconciliation is due to Dem leadership losing power and authority as a result:

    "it's not just the minority party that would be cut out, the institutional prerogatives of most of the committees other than Budget and Finance would be drastically reduced, especially Appropriations."


  4. "All this seems obvious to me, but all the journalism I see treats reconciliation and ordinary legislation as alternatives, rather than complements.

    Can anyone explain this to me?"

    The elite MSM is strongly swayed by elite economic interests. Never forget that the same media which swallowed GOP BS for 8 years during the Clinton administration, and for 8 more years under the Bush administration is maybe one inche less gullible now. And most of that is probably due to the internet

    holding their feet to the fire.

    IIRC, Bob Somerby spent years pointing out the Gore got the same sh*t that Clinton got, and Kerry got the same sh*t that Gore got, and predicting that the next Democratic president would get more of the same.

    He was right.

  5. In addition, Mark, it's important to pass a bill under reconciliation if at all possible, and I mean 'if at all possible', to trim the sails of the Baucus Gang. I don't believe that these guys got any more rolled by the GOP than they wanted to. Losing some goodies would teach them that the BATNA is not necessarily their friend, either.

  6. I think there is more to it than simple negotiation theory. The big difference between this and 100 Senators (or 6) in a room is that the American electorate is watching. I think the nastiness of the summer was far more expected than not by the administration, though they will never admit to this. Nastiness is not something Americans like to see on TV every night. Try explaining the tea party screamers to your 9 year old daughter and you have some idea of why.

    The President invites Republicans (and their kids) over to the White House, the President looks calm, unflappable and a bit saddened by the nastiness. The left stays (remarkably) calm, quiet and patient all summer long. The President comes to Congress and is calm and reasonable and clearly willing to compromise. The right shouts, almost claps…but no. The President ends up holding the center, looking reasonable and the right looks … silly and shrill. Even dangerous, bringing guns to town meetings, even the NRA must be cringing.

    Now you have a situation in which the Republican's poll numbers are slipping (see Grassley's Iowa Post polling) and the President's numbers are improving (see Pollster). If you are a conservative Democrat or centrist Republican, who do you side with? The shrill and silly or the calm center?

    This summer wasn't about negotiation, it was about letting the right define themselves. And they did it very, very well, right into a corner defined by Limbaugh and Beck. Now is the time to define what is reasonable. This will be led by the President, former Presidents Carter and Clinton, Dean, and wonks. Soon we will have negotiation and, if I'm right, those conservative Democrats and some Republicans will support a bill with a significant public option (with a fig leaf for their cause).

    This approach bears more fruit (if I'm right) for the Administration. In the next round (cap and trade, financial regulation) the industries facing change have to make a decision about signing with the shrill and silly or with the conservative Democrats who might be able to negotiate on their behalf. Watch PAC/industry donations from these industries. Do they go to the Republicans, which will mean more circus shows, or with conservative Democrats, which will mean quiet deals. My bet is that the donations are already switching, but we'll have to see.

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