Framing in negotiation, and the negotiating skills and negotiation tactics that go behind effective bargaining, can help not only achieve a negotiator’s goals at the bargaining table, but also can anticipate the fallout or kickback received from parties away from the negotiation table. President Obama’s tax-cut negotiations with Senate Republicans in late 2010 offer cautionary lessons for those who must communicate bad news to constituents.
In December 2010, President Barack Obama engaged in a negotiation showdown with congressional Republicans over the George W. Bush–era tax cuts, which were due to expire at the end of 2010. During the 2008 presidential campaign, Obama had promised that, if elected, he would allow the tax cuts for Americans earning more than $250,000 to expire. But just before Christmas, 42 Republican senators were threatening a filibuster that would block almost all year-end legislation if Senate Democrats didn’t vote to renew all the tax cuts.
In negotiations with the Republicans, Obama (represented by Vice President Joe Biden) backed down and agreed to a two-year, $100 billion tax-cut extension for the wealthiest Americans. In addition, the Republicans (led by Senator Mitch McConnell of Kentucky) negotiated a reduction in the estate tax: a tax exemption for individual estates valued at less than $5 million. In exchange, the Republicans agreed to a second, $300 billion economic stimulus package that included extended jobless benefits, a temporary payroll tax cut, and new business tax incentives.
Negotiating Skills and Negotiation Tactics: Timing and Framing at the Bargaining Table and Beyond
The outcry from liberal Democratic commentators and Obama supporters was swift and furious. Condemning Obama as a sellout for extending the tax cuts for the wealthy, they accused him of reneging on a signature campaign promise and putting the nation deeper into debt. Many on the left believed Obama should have called the Republicans’ bluff, even if it meant Congress would grind to a halt.
Could Obama have negotiated a deal that better met the Democrats’ goals?
Greater historical distance is needed to answer the question conclusively. Yet based on what we know now, several lessons have emerged that all of us can apply to our important negotiations, especially when we face the task of communicating a negative outcome to those we represent.
1. Timing is (almost) everything.
Many of the Democratic lawmakers who complained about Obama’s concession on tax cuts for the wealthy have themselves to blame as well as the president, political analyst Albert R. Hunt writes for the wire service Bloomberg News. In the summer of 2010, when the Democrats still had a strong majority in both houses of Congress, they might have been able to negotiate a compromise with the Republicans to extend the tax cuts for middle-class Americans for a longer time period than the cuts for wealthier Americans. “They either would have prevailed or at least created a campaign issue,” Hunt writes.
Top officials in the Obama administration reportedly wanted to push for such a measure. However, at the time, the White House chief of staff, Rahm Emanuel, was departing to run for mayor of Chicago, and Senate Majority Leader Harry Reid of Nevada was absorbed by a tight reelection race. The White House officials in charge of setting strategy “miscalculated” by failing to pressure Congress to vote on the tax bill before the November midterm elections, says Hunt. After the Republican landslide, Obama may have lost the bargaining power he needed to push back successfully on the issue. Negotiators often fail to recognize when their power is fleeting. When you find yourself in a position to negotiate forcefully for what you need or want, don’t allow disorganization, distraction, or overconfidence to cause you to let the opportunity slip away. By seizing the day, you may avoid the need to do damage control in the future.
2. Get your message out.
Immediately after his deal with the Republicans was announced, Obama was widely derided as a poor negotiator. According to this view, having shown weakness to his enemies, Obama was doomed to be further exploited by the Republicans when Congress reconvened in January.
Yet in the weeks after the negotiation, Obama won back the respect of at least some of his disgruntled supporters by scoring key victories in Congress, including the repeal of the military’s “don’t ask, don’t tell” policy and passage of a new arms-reduction treaty with Russia.
Weeks after the tax deal was done, White House officials revealed it to be part of a more centrist course designed to attract bipartisan cooperation in 2011, as reported by the Wall Street Journal. Even many of those who still considered Obama a sellout on the tax issue were now able to see the logic of his broader negotiating strategy. Observers could be excused for overlooking the big picture at the time the tax deal was first announced, as Obama himself failed to clearly communicate his intentions. In a press conference announcing the deal, he defended it while comparing Senate Republicans with “hostage takers” and calling members of his own party “sanctimonious” purists. Missing from his message was an articulation of his long-term centrist strategy. It’s easy to get so wrapped up in the intricacies of a negotiation that we forget to communicate our broader goals to those we represent.
But because their support may be crucial during implementation, we need to take the time to explain our decisions, especially when we bring home disappointing results.
3. Display your emotions strategically.
Following what he described as the “shellacking” he and congressional Democrats received during the midterm elections, Obama invited GOP leaders of the lame-duck Congress to meet with him at the White House. The leaders postponed the president’s invitation by two weeks.
On the heels of this apparent slight, Obama extended another olive branch: a freeze on federal salaries. Senate Republicans responded with a vow to block almost all legislation unless the Bush-era tax cuts for the wealthy were extended. Obama’s concessionary behavior could be chalked up to the desire to move forward with a limited agenda. More interesting was his decision not to show frustration with his opponents. During his press conference after the tax-cut negotiation, the president displayed more anger toward fellow Democrats than toward the Republicans who had backed him into a corner. The late diplomat Richard Holbrooke was known for displaying a fiery temper during negotiation, but he maintained that his shows of anger were almost always strategic—designed to make the other side snap to attention.
Obama’s surprising decision to lash out at liberal members of his own party rather than the opposition may have been impulsive but, given his reputation for controlling his emotions, it might have been part of a long-term strategy for winning back independent voters. The judicious expression of emotion can be useful in negotiation, especially when others on your side are watching.
Suppose, for example, that you grow frustrated with the team across the table for backing away from a concession. By expressing your feelings constructively, you could show the other side and your teammates alike that you won’t tolerate further broken promises. Expressing emotions strategically doesn’t mean you should try to manufacture emotions you don’t feel. Rather, aim to stay attuned to your feelings and express them constructively when you need to send a well-timed message.
See also: 5 Win-Win Negotiation Strategies
Adapted from “Damage Control for Disappointing Results,” first published in the March 2011 issue of Negotiation.
Originally published January 2015.