Congress managed to pass legislation avoiding some of the potential negative effects of the so-called “fiscal cliff.” Most political analysts are trying to figure out whether this negotiated outcome is a victory for Democrats or Republicans. That is the wrong question to ask. The right question is whether the deal is better for each side than the alternative of failing to make a deal. Since the public, as well as the stock market, would have looked very unfavorably on the failure to make a deal, the agreement is clearly a win for both sides. Whether one side or the other gave up more of their original positions to achieve the deal probably reflects the relative bargaining strength of each side. In this case, bargaining strength is measured by public opinion, as well as the ability of each side to garner votes supporting their position in Congress.

Even though the amount each side needed to concede is primarily determined by their political power, most of the partisans on both left and right seem focused on the negotiating tactics of their respective leaders. Many partisans are highly critical of the deal, complaining that their leaders failed to hold firm enough to their initial negotiating positions, and surrendered too much to the opposition. These Monday morning quarterbacks are too concerned with technique, and fail to recognize the decisive importance of political power.

I happen to think it is usually poor form to second guess the negotiators from your team. When I come home from the supermarket lugging many bags of groceries, and one of my kids asks why I bought this brand of peanut butter instead of another brand, I don’t find that a helpful question, and I don’t usually appreciate having to justify my choices. When clients or co-counsel ask me whether I asked a witness a question at a deposition that I have already taken, I don’t find that kind of question helpful either, because the transcript will show all the questions that were asked, and if I forgot something, there is not much to be done about it after the fact.

Similarly, it drives me a little crazy when people who did not participate in settlement negotiations second guess the outcome. These non-participants cannot fully appreciate all of the reasons why the deal turned out the way it did.  And there is no point in comparing the deal that was achieved to some other hypothetical deal that some second-guessers on either side think they could have achieved if only their superior negotiating skills had been brought to bear. Even if they think they never would have given up on a particular point, they can’t say for sure what the other side would have done in response to that intransigence. Maybe they would not have obtained any deal at all.

Therefore, the only question that should be asked is whether the deal made by the leaders we chose, is better than no deal at all. Considering that the “fiscal cliff” bill passed by a margin of 89-8 in the Senate, the answer to that question would seem rather obvious, at least to about 90% of the members of the Senate. The only bills the Senate passes with that kind of margin are the kinds that declare our love of motherhood, the flag, or apple pie. And in the House, where Republicans have until now stood united in their opposition to any kind of tax increase, we saw 85 Republican members vote to support the package, the final bill passing by the landslide margin of 257-167.

A lot of people are worried that this deal did not solve as many problems as we hoped to solve. A lot are worried that we put off some difficult decisions, and will have more difficult battles ahead. Personally, I am cheered whenever I see two groups locked in bitter conflict able to agree about anything. However small and halting that agreement, it can be used as a stepping stone to build larger agreements.


Prior posts in this series:

I.   Openings - The parties make unrealistic opening offers and demands.
II.  Impasse - Negotiations break down in the middle stages.
III. Plan B -  The parties explore the alternatives to a negotiated agreement.
IV. End game -  The parties finally abandon previously inviolable positions.

Joe Markowitz has practiced commercial litigation for more than 30 years, both in New York City and Los Angeles, and has served as a mediator for more than fifteen years. He is a member of the Mediation Panels in both the District Court and Bankruptcy Court in the Central District of California. He is currently the president-elect of the Southern California Mediation Association. Website: