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The Negotiator: Solving the US debt problem

Wharton's negotiation guru tackles Washington's most urgent challenge.

proposal and the Republican’s $5 trillion proposal are just not productive or realistic. When parties are far apart, they can't bring themselves to make big steps. Each side's position seems extreme to the other, so no deal is possible in the current climate. The hardest thing for adults to learn is to be incremental. When there's a lot of risk, you need to take much smaller steps.

The first thing they've got do is postpone the August 2nd deadline. Studies show that conflict arises and the quality of a deal goes down close to a deadline.

The next thing they need to do is move slowly toward each other. There's nothing wrong with throwing the other party a bone. Give the Republicans something, even if they're being extreme, and say, “let's postpone this and come back another day.”

Obama also needs to find friends on the other side, and there are some, who can talk some sense into those who are extreme, or exclude them if they can't.

On Tuesday, House Republicans took up a bill they call Cut, Cap and Balance. It would cap federal spending at 18 percent of Gross Domestic Product — the U.S. last spent less than that in 1966 according to the National Journal. It would also require a two-thirds supermajority in Congress to pass tax increases, and it would dramatically change how the government operates. Even conservative Democrats like Steny Hoyer D-MD regard the bill as unrealistic.

In other words, as the clock ticks toward the deadline, the House is occupying itself with a bill largely regarded as a distraction, or as a step away from compromise — and it won’t pass the Senate. The White House has called it “duck, dodge and dismantle.” Is such derision the right approach? How should the Democrats handle this?

Diamond: The last thing you want to do is start to insult the other side, which they continue to do. How can they possibly reach an agreement when they're insulting each other?

Producing extreme proposals just to look good to your constituents doesn't get deals done. It's just a waste of time, and proves the point that closer to a deadline, the quality of ideas diminishes. They need a calm commission to take some months to deal with this very complicated issue, and embrace ideas from the whole country.

There’s already been a commission, and it was largely ignored. The feeling is that because the two sides disagree so much, and because they’ve tarred one another with such vitriol, the only way to come to agreement is under a crisis situation like the current one.

Diamond: The problem is you've basically got the wrong people negotiating. Their success depends on who's on the committee and what structure they have. There are plenty of people who are experts in this kind of thing. They need to be empowered — just like the government did after the Challenger accident, after 9/11, and after nuclear accidents. Experts can follow the advice of the Government Accountability Office, which comes up with recommendations on how to cut waste and make the government more efficient all the time.

The challenge for the Tea Party Republicans appears to be that they came to office promising to enact policy that simply isn’t realistic — policy such as tax and spending cuts, at a time when many Americans are retiring, placing an additional burden on the government. Now comes the moment of truth when their principles are being tested — but if they stick with their stated goals the country will get hurt. House Majority leader Eric Cantor is the embodiment of this quandary. Last week, he stood in the way of a deal the House Speaker John Boehner backed. How should President Obama and Speaker Boehner deal with him?

Diamond: The way to deal with Cantor is not to deal with him. The president and Boehner both understand what needs to be done, which is to move toward an agreement that involves both sides. They need to be adding Republicans and Democrats one by one — in other words, they need to deal with everybody else.

Here’s an analogy from business: When Facebook was first rolling out, the University of Texas at Austin resisted the social network. So Mark Zuckerberg simply went to all the campuses outside the University of Texas at Austin. After those other schools joined, so did the University of Texas at Austin. You want to deal with the lower hanging fruit. You don't want to deal with the most difficult people first.

If Cantor is going to be difficult, they should just stop dealing with him. They should spend their energy on people that they can deal with. Eventually Cantor will either come around, or be excluded.

Last Wednesday, in a meeting with Cantor, President Obama walked out of the room before the meeting was over. Is this an effective technique?

Diamond: It is a terribly ineffective technique. When you walk out of a room, you worsen the situation by telling the other party that you don't value them enough to give them the time of day. That prevents people from listening, and does not produce good ideas. What he should have said is, “I think we're going to take a break now, and try to figure out what we're going to do." 

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Visit Stuart Diamond's website to read about his book, Getting More.