Basic Bargaining Theory and Health Care Reform

Negotiation theory says that the side that needs to get a bargain done has the edge on the side that doesn't need to get a bargain done.  Right now, the Democrats want a bill to pass, and the Republicans want no bill to pass.  So it's not surprising that the Republicans aren't bargaining in good faith.

If a solidly Democratic bill were to pass under reconciliation, even if it were far from a perfect bill, the balance of negotiating advantage would shift.  So why does everyone write as if reconciliation were an alternative to ordinary legislation rather than a prelude to it?

1.  Health care legislation can avoid a filibuster and pass with 50 votes plus the Vice-President’s tie-breaker if it’s done via the budget reconciliation process.

2.  The Byrd Rule limits what can be done that way; the result would certainly be suboptimal compared to doing the same thing via ordinary legislation.  But that means 60 votes to break a filibuster.  That might be done with only Democratic votes if some Dems who plan to vote against final passage could be convinced that party loyalty ought to dominate their personal policy preferences or electoral calculations.  But that means giving every centrist-to-conservative Democratic Senator veto power.

3.  Basic negotiation theory starts with the question, “What happens if there isn’t a bargain?  How good or bad is that for each side?   In jargon, what is each side’s best alternative to a negotiated agreement (BATNA)?  The worse the BATNA, the stronger the need for a deal, and the weaker the bargaining position.

4.  Right now, the good guys want a bill and the bad guys don’t want a bill.  It’s hard to imagine any bill that’s better for Mitch McConnell than no bill.  So the obvious outcome of bargaining is no deal, or a very, very bad deal for the Democrats.

4.  So the obvious move for the good guys is to use the reconciliation process to make the BATNA better for Democrats, liberals, and the pro-health-reform interest groups better and – equally important – worse for conservatives, Republicans, and the anti-reform interest groups.  Once a bill passes under reconciliation that forbids some of the worst insurance abuses, heavily subsidizes health insurance for the poor and middle-income groups, raises taxes on the rich and on alcohol, and puts a cap on insurance-company executives’ pay, the balance of bargaining advantages reverses itself.  Now it’s the right that needs something else to pass.

5.   In this scenario, reconciliation isn’t a substitute for ordinary legislation but instead a prelude to negotiations about such legislation.  As Al Capone is supposed to have said, “You get more cooperation with a kind word and a gun than with a kind word alone.”

All this seems obvious to me, but all the journalism I see treats reconciliation and ordinary legislation as alternatives, rather than complements.

Can anyone explain this to me?

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Comments

[TheIndependenceParty]

You must be kidding! Your scenario leaves the Democrats holding a bag full of C R A P with their name and fingerprints all over it. Healthcare will be no more affordable, and the momentum will be lost. Your theory is corporate in nature, and not political. It presumes both parties agree they are best served by a mutually beneficial outcome, and by their inherent need to participate. A corporate prty which does not participate ("work") gets fired.

In political negotiation theory, one party in negotiations may have the intention that the outcome will be so ridiculous and ineffective, that they can later point to the outcome as an abject failure, ... blame it upon the other party, ... claim innocence in their previous objection, ... and take over the position of the other party, namely by winning an election in which the principal campaign theme is how the "Democrats screwed up healthcare reform".

Think of it as the "terrist" negotiation theory, ... because that is what the Republicans are doing. If they can't have their way, ... they don't care howthis goes down!

[loveHP]

"Negotiation theory says that the side that needs to get a bargain done has the edge on the side that doesn't need to get a bargain done."

Didn't you mean to say that the side that doesn't need to get a bargain done has the edge?

[Malagodi]

Sure, I can explain it. In a standard coalition government, there MUST be a proposal that accommodates both partners, otherwise the government risks dissolution and new elections.

If there is a non-standard coalition government, there still must be a proposal that accommodates both partners. But there is no imperative to accomplish a real result that actually benefits the society, as elections are regularly scheduled. Both partners know that the only imperative is to keep the system intact. It is the system that protects the economic structure, the nation. It is not that there is no difference between the parties, it is that they do not compete for actual political power, but for dominance of the system that controls, or steers, the power. It is never steered in a 'progressive' direction.

That is why the reconciliation process is not a good option for the Democrats. It breaks the arrangement. If they use the reconciliation process on health care, they will get no future cooperation on climate change or immigration, etc., making their administration a 'failure'.

Suggestion: rather than trying to rewrite the constitution and umpteen laws in 50 states to create a parliamentary system - an impossible task - simply shift the coaltion partners from Red and Blue to Blue and some shade of Green.

*a simple joke:
Q: What is the difference between Republicans and Democrats?
A: The Democrats must say they like you.

(again, I don't think they're the same, just that they compete for dominance, not control.)

[wildedge]

The reconciliation process is standard legislative proceedure. The right wing charge that it undermines the power of the Legislaure is a joke revealing a want of knowledge about the workings of government. The reason even presidents hesitate invoking it is because it risks forcing legislation down a path to a lowest common denominator just to get something down.

[tran23]

I have to disagree with your comments: "Right now, the Democrats want a bill to pass, and the Republicans want no bill to pass."

It should be worded: "Right now, the Republicans want a corporate handout to pass. The Democrats also want a corporate handout to pass. They are doing their best to make it appear that they are on different teams (the altruistic democrats vs the selfish republicans). In the end, the corporate lobby always wins since both parties work for their team."

[mld678]

President Obama’s heath care promises won’t be kept. Costs will rise exponentially, NOT fall. Therefore, our taxes will be the ones to pay for it. We need to support the goal of covering all individuals through private health insurance. We are NOT prepared to turn our health system over to the government.
http://www.friendsoftheuschamber.com/issues/index.cfm?ID=300 .

[EbonBear]

No-one is proposing turning healthcare over to the government. What is being proposed is a public insurance OPTION.

[wildedge]

Taxing the rich would keep middle class taxes down. And I wsh the health care reform bill would turn our health system over to the government, a system that works exceeding well in other civilized nations; however, none of these bills hand anything over to th government; most o the legislation is merely regulatory, andthe public option is simply one possible choice that would hardly hand over the entire health system to the government. Indeed one of its function is to put market pressure on insurance companies to produce higher quality insurance at a lower cost. That's capitalism in the 21st Century, get used to it.

[mylihm]

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http://tcmknow.com/

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[pinkibus]

What it has to do with is keeping support for campaign funds and winning the next election. Health care reform means the insurance companies lose and so do the candidates who depend on the insurance companies to fund their campaigns. The bill would have gone through in a nanosecond if lobbying and corporate donations to campaigns were halted.

Further, there is an underlying aspect to American religious beliefs which is that wealth indicates God.s pleasure and poverty his displeasure. So - the idea of actually cobbling to-gether a health insurance single payer violates memes which go back to the Pilgrim Fathers. That it would actually save money is irrelevant. And it is irrelevant that the whole of society would benefit.

[wattnot]

It seems to me that the word explanation is no longer in the dictionary. What is so manifestly obvious is the need to take the proft motive out of health care. Until that happens those who ration health care will do it on the basis of money, not need. I can tell you now that rationing health care access on the basis of clinilcally determined need, rather than ability to pay, will do more to improve the gene pool in America than anything else imaginable. Those who oppose health care reform know this.

[unitron]

That could be an interesting SNL skit (or Twilight Zone episode)--Triage of a tsunami of patients on the basis of financial, rather than medical, criteria.