While most of us will be free to pursue family and other activities this weekend, it looks like Senators Chris Dodd and Richard Shelby will be spending the weekend trying to hammer out an agreement between Republicans and Democrats on new financial regulation legislation. That is because Majority Leader Harry Reid set a vote for 5:00 p.m. on Monday on the Dodd bill. Republicans have threatened to prevent debate on the bill by unanimously voting against cloture. So by setting the time for a vote, Reid is forcing one of three possible outcomes. Either a deal is struck and a number of Republican Senators will then allow the bill to come up for a vote. Or no deal is made and at least one Republican Senator allows the bill to come to the floor anyway. Or the Republicans stick together and prevent the bill from coming up for debate.
I discussed the politics of this bill a bit on my political blog. Here I’m only interested in talking about negotiating tactics. I also did a post about deadlines a few months ago, in which I noted that parties often do not take them seriously. But sometimes the parties all know that the deadline is probably real. In a lawsuit, if the judge shows he is serious about a trial date, the parties know that if they don’t settle the case before the trial starts, they are most likely going to trial. In the case of financial reform regulation, Senator Reid could still decide to postpone Monday’s vote. But he will more likely decide he has to stick to it, so as not to look weak, so the parties have to take the deadline seriously. Harry Reid’s maneuver demonstrates that if you are going to set a real deadline, you should have a Plan B and also perhaps a Plan C. Reid, who is a master negotiator, would not be forcing a vote unless he can live with any of the three possible outcomes. The Majority Leader can presumably live with any compromise Senator Dodd works out with Senator Shelby. He can certainly live with passage of the original Dodd bill. And he must be able to accept the risk that the bill will be defeated due to a Republican filibuster, which would then allow the Democrats to blame Republicans for being in the pockets of Wall Street come the fall elections.
When you set a deadline, you also have to calculate the effects of that deadline on the other side. Senator Reid knows that a number of Republicans support many of the provisions of the reform bill, and he also knows that there are serious political risks for the Republicans in being seen as against Wall Street reform. So he evidently feels that the pressure of a deadline will be sufficient to gain enough support to allow the bill to pass. Senator Schumer is quoted in Politico as saying that as a result of this pressure, the Democrats “have the upper hand.” Reid’s time limit thus prevents negotiations from dragging on for weeks, seems likely to achieve passage of some form of bill, and allows the Democrats an acceptable political alternative if the deadline does not achieve its intended results. To make the best possible deal, you sometimes have to be willing to walk away from the table and accept the consequences of failure.
(photo from I Hate Room Mates)