What should you do in a negotiation when the other party refuses to meet your key demand? That’s the question Senate Democrats faced in the midst of the 2025 shutdown of the federal government. The decision of eight Democratic caucus members to concede on their chosen flagship issue in exchange for very little proved highly controversial—and violated best practices for making concessions in negotiation.
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The Democrats’ Ultimatum
On October 1, Congress triggered a shutdown of the federal government after failing to pass appropriations legislation for the 2026 fiscal year. While Senate Democrats were unhappy with many aspects of the House appropriations bill, they objected most vociferously to its phasing out of premium tax credits for healthcare plans offered on the Affordable Care Act (ACA) marketplace. As the shutdown began, Democrats said they wouldn’t accept a bill without the healthcare subsidies.
With the government negotiations largely at a standstill, the shutdown dragged on for more than a month and inflicted significant pain on ordinary Americans, as federal employees worked without pay, federal food aid (aka SNAP benefits) dried up, and travel was disrupted. Rather than negotiating with Democrats, President Donald Trump put pressure on them to back down from their ACA ultimatum by firing some federal workers and fighting in the courts to prevent SNAP benefits from being reinstated.
Is That All There Is?
Opinion polls showed the public blamed Republicans more than Democrats for the shutdown. The Democrats’ decisive showing in November 4 elections across the country also appeared to add to their negotiating power.
Yet, on November 9, the news broke that eight members of the Democratic caucus had agreed to fund a bill that did not include the ACA tax credits. In exchange for backing down, the senators secured only modest concessions from Republican negotiators, including the promise of a future vote on the tax credits, the rehiring of federal employees fired by Trump, and a short-term ban on future workforce reductions, Politico reports.
The eight senators (seven Democrats and one Independent) reportedly caved after concluding that congressional Republicans and President Trump were willing to allow the shutdown to continue indefinitely without conceding on ACA subsidies, even as the pain inflicted on everyday Americans mounted. “I think people were saying ‘We’re not going to get what we want’” on the health subsidies, Senator Angus King, one of the eight, said. “But in the meantime, a lot of people are being hurt.”
The shutdown’s expected end came as welcome relief to millions of Americans. But many Democrats were furious that the eight senators had given in on their key demand and wondered what the painful shutdown—the longest in U.S. history—had achieved. “Yay, we can finally get paid,” one civil servant told the New Yorker. “But at the same time, W.T.F. was it all for? We were used as pawns in a political game, with nothing to show for it but stress, emotional trauma, and credit-card debt.”
Guidelines for Making Concessions in Negotiation
The following advice points can assist you in making concessions in negotiation that improve the quality of your deals—and avoid the need for capitulation or impasse.
Make trade-offs, not ultimatums. In the most efficient negotiations, parties make value-creating trade-offs by proposing concessions on the issues that matter most to each of them. For example, if you value short turnaround from a service provider, you might offer to pay more up front in exchange for a tighter-than-usual deadline. If the other side can work quickly and values early payment, they should be happy to make the trade. You each get more of what you want with minimal pain.
By comparison, when one party makes a demand on a single issue, they box both sides into a corner: Each now faces a stark choice between standing firm and backing down. Such take-it-or-leave-it ultimatums ratchet up the odds of competition, impasse, and capitulation. Indeed, in the three previous lengthy government shutdowns, as the New Yorker notes, “the party forcing the issue wilted under public pressure without getting what it came for, as the other side pointed to the intensifying costs for federal workers and average Americans.”
In the 2025 appropriations negotiations, political polarization, animosity, power differences, and deep distrust all made effective collaboration challenging. Yet having so many issues at stake, from ACA benefits to border security to security funding for federal officials, offered rich opportunities for both sides to get more of what they wanted. The fact that the two sides needed each other to make a deal—rather than being able to walk away and find a different partner, as is true of most business negotiations—offered further motivation for productive concessions in negotiation. Both sides squandered the opportunity.
Insist on reciprocation. The eight senators broke the most cardinal rule around making concessions in negotiation: Don’t make a concession without getting something of significance in return. When you make an unreciprocated concession, or fold completely, you signal weakness that could set you up to be taken advantage of in future negotiations.
Make decreasing concessions. When making concessions, start off with the largest concession you’re willing to make, then offer less and less in subsequent concessions. In their research, Kian Siong Tey and colleagues found that negotiators who offered concessions that decreased in size—rather than one large concession (as the eight senators did) or concessions that grew larger—got better deals.
Offer a contingent concession. What should you do when your counterpart seems completely self-interested? Harvard Business School Professor Deepak Malhotra recommends making a contingent concession. “A concession is contingent when you state that you can make it only if the other party agrees to make a specified concession in return,” he explains.
He gives the example of an executive who’s renegotiating a service contract with a customer who is demanding extra support for no extra fee. The executive might say, “We can provide additional support but only if you agree to purchase some of the following additional services” or “This is the best we can do on price, but if you can adjust some of your demands, we might be able to reopen the issue.” In the Senate negotiations, both Democrats and Republicans might have broken through their stalemate by replacing rigid demands with contingent concessions.
What other advice do you have for making concessions in negotiation?
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Build powerful negotiation skills and become a better dealmaker and leader. Download our FREE special report, Negotiation Skills: Negotiation Strategies and Negotiation Techniques to Help You Become a Better Negotiator, from the Program on Negotiation at Harvard Law School.
