How I Learned to Stop Worrying and Love the Debt Ceiling Negotiations

Regardless of where you come down on this whole debt ceiling business, if you want to hone your negotiation skills, it is the thing to pay attention to.  Because watching people screw things up beyond all recognition is a fantastic way of learning.

Here are the major lessons I hope you take away from this debacle.

No one is a perfect negotiator.

Negotiation is carefully traversing another person’s emotions and coming out on the other side with what you want.  No one does it perfectly all the time.

President Obama and Speaker Boehner are both very good negotiators.  They’ve both made some stupendous mistakes in this negotiation.

(c) 2011 Associated Press News Service

President Obama did not deal well with his disappointment when Speaker Boehner walked away from their talks last week; instead of regrouping, he took to the airwaves and lashed out at the Speaker, severely limiting the likelihood of the Speaker collaborating with the President to raise the debt ceiling.

Speaker Boehner, on the other hand, failed to do his homework to figure out what the real interests of his fellow House Republicans were before he sat down to those talks.  He that if he brought back a deal that served certain interests, a majority of his party members would be content to vote in the affirmative.  He was very wrong.

Mistakes don’t mean that you are a crappy negotiator.  They mean you made a mistake.  So don’t avoid negotiating because you’re afraid of screwing up.  You’re going to screw up; negotiate anyway.

Don’t use your perspective to understand someone else’s interests.

The New York Times ran an article this past weekend about how amazing it was that the House GOP freshmen weren’t interested in avoiding the ramifications of not raising the debt ceiling by the August 2nd deadline.

Really??  Really?

AP Photo/John Bazemore

This is amazing only if you are trying to understand their motivations in terms of what you want and think is important.

If you think the debt ceiling is important, that not raising it will have a negative impact on the economy, and that the deadline for doing so is immovable, you’re correct that the actions of many of the GOP freshmen don’t make a lick of sense.

But people don’t act, especially in times of great crisis, in a way they think is unhelpful or irrational.  They act in a manner that is most likely to ensure their interests are met.

What the Democrats and many Republicans failed to realize until too late in the game was that the Tea Party affiliated Congressmen and women did not share their fundamental interest: avoiding the negative economic ramifications of failing to raise the debt ceiling.  What the Tea Party members were/are interested in is not increasing the nation’s debt.  Period.  That motivation colors every action that they take; trying to ignore that does you absolutely no good.

If someone you’re negotiating with is behaving in a way that doesn’t make sense to you, stop trying to understand them from your perspective.  Ask yourself, “What are their actions best designed to achieve?”  Use the answers you come up with to uncover their true interests and brainstorm options that they’re more inclined to accept.

When things get tough, put it all back on the table.

About three weeks ago, after steady negotiation between the White House and Republican leadership that saw both sides offer up a number of concessions, talks ran in to an impasse.  Everyone was done conceding and were content to hunker down for a nice friendly game of chicken.  Instead of playing along, President Obama and Speaker Boehner did something that seemed a little odd: they threw out the almost-deal they had and started all over again.

Brendan Simalowski/Getty Images

When a negotiation runs into problems and neither side is willing to budge another centimeter, sometimes the best thing to do is throw out the almost-deal you have, put everything back on the table and start all over again.


Well, first of all, you don’t have a deal.  Which means you don’t have what you need to get what you want.  Many people see restarting a negotiation like this as giving up something.  That’s silly.  You don’t have anything; you have a deal written in sand and the tide is barreling in.  Making all aspects of the negotiation fair game again is just fine.

Second, doing so can rebuild trust for both of you, and you’ll need that trust to finish what you’ve started.  Negotiations can get rough and when you’re battling back and forth over small matters, you can lose faith that this is a person you can depend on to stay true to their word.  Hitting refresh makes you both a little vulnerable and communicates that you’re both worth trusting.

Finally, and most importantly, putting everything back on the table, every concession, every tiny win, gives you more to make a deal out of; it gives you more options.  When a negotiation reaches an impasse it means that neither side is interested in what they can get by agreeing to what remains.

Those last few bits and pieces of the potential deal are unappetizing to both sides.  You can try to force a deal, but neither of you will be satisfied because you’ll only remember the last horrible thing you gave up/agreed to.  So, scrap what you’ve got and start over.  Chances are you’ll end up structuring the agreement just slightly differently, and those changes will be the difference between an almost-deal and a real, live bone fide deal.

Threats don’t work.

Democrats started talking about the importance of raising the debt ceiling much earlier in the year.  Treasury Secretary Timothy Geithner testified many times of the calamity that would ensue if Congress didn’t raise the debt ceiling.  He was even so bold as to declare the date everything would start falling apart.


The problem was that Geithner’s threats didn’t hold up.  He moved the date of economic Armageddon.  Twice.  So when he was “really serious this time, guys” about the August 2nd deadline, many Republicans thought he was bluffing.

An individual’s natural reaction to a threat is to be defensive.  Occasionally, that defense means giving into the threat because the person doesn’t have any other options, but very rarely do people not have other options in a negotiation.  The easiest and most readily available one is walking away.  It’s not a bad tactic because it tells them really quickly if you’re bluffing.  If you are, be prepared to pay for that bluff in the negotiations that follow.

Even if you aren’t bluffing, threats can backfire.  Secretary Geithner may have believed that May 31st really was our drop dead date.  But as the deadline approached and Congress didn’t act, he had to do something to prevent economic panic.  And that something, though the right thing to do, undermined his threat.

Threats won’t get you what you want, unless what you’re after is a weaker bargaining position.  Stay away from them and use more creative tactics instead.


The basics that I talk about here in the blog are at play in even the most complex negotiations.  Paying attention to those high profile negotiations, identifying what’s at play and how things work out, will help you improve your negotiation skills.  It will also give you something to do other than be angry about politics.

(c) Columbia Pictures

Categories: Dealing with People, Negotiation Strategy


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6 responses to “How I Learned to Stop Worrying and Love the Debt Ceiling Negotiations”

  1. Great blog, from a perspective that I have not heard- nice work!

  2. Very well written, and an interesting look at some lessons to learn from such a high-profile negotiation. But it seems like you left out the most obvious element of the debt ceiling negotiations- the facts that one side didn’t seem to be negotiating in good faith, and the other didn’t seem to have any leverage in the negotiation. Without importing a political debate, the Republicans seemed to reject all efforts at compromise (even when said “compromise” was in fact massively in their favour), and clearly had no fear of the consequences of negotiation breakdown- or at least, not enough to force their party into line. Likewise, Obama repeatedly seemed to abandon both his party’s position/interests, and to reject anything (such as the constitutional option) which would have given him a stronger negotiating position.

    Whether you agree with this analysis or not (and I would be interested to know if you did), what advice do you have about negotiating in such a position? Namely, what do you do if you need to agree a deal, but your opposite numbers don’t appear to be negotiating in good faith? Suck it up and accept their terms, no matter what? How do you better your position when you’re the underdog?

    • Katie says:

      This is a great question; thank you for feeding my negotiation nerd and asking it!

      I stayed away from that particular topic because I didn’t want politics to get in the way of what I was trying to explain. I really do think both sides made bonehead moves (though, the more important a negotiation is, the more likely there will be bonehead moves). Both sides accused the other of not bargaining in good faith and because I don’t know what actually happened, I don’t know that either was right or wrong.

      But your question! Your question is fair game. When you’re negotiating with someone you think is being unfair or holding back you can (and should) confront them about it and look around for other options.

      Confronting someone is hard, but necessary. Sometimes people don’t have the self awareness that what they’re doing feels unfair, other people are just trying to get away with something. Many, but not all, people will try harder to work with you if you confront them about how they are dealing with you. Because (1) we all have an inherent social drive to be liked and (2) they presumably want the deal to happen, too. When I’ve confronted people in the past I’ve said things like, “You know, this just doesn’t feel fair. No matter how I look at it. And it’s really frustrating me. Tell me what’s going on and why I shouldn’t walk away from this deal.”

      The second thing you should do is use what you know about the other side’s interests to generate a better position for yourself. Granted, this is a lot easier when the other side isn’t half of the nation’s political structure. Are there other people or things that they’re interested in that you have a relationship to? People generally do not act against their own best interest. If you can offer them something that they very much want, you can use that interest to drive better behavior in your current negotiation. The Dems and some of the Repubs sort of tried to do this with the balanced budget amendment vote, which is something the Tea Party very much wants. The problem was that the vote would fail and never get out of Congress, much less be approved by the States, and the TPs knew that. They knew it was a false promise so it didn’t entice them to the degree some probably hoped. When you try and use a carrot to produce better behavior from your shifty counterpart, make sure it’s one that you can make good on.

      Thanks for the question!

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