15 Ways to Solve the Budget Impasse

governmentshutdown

As the partial shutdown of the U.S. government continues into its second week, Knowledge@Wharton decided to ask several of the school’s top negotiation experts for their ideas on how to solve this impasse. Their assignment: Come up with a mechanism, or mechanisms, that could bring about a solution acceptable to both the Republicans and Democrats.

Here are their responses:

Wharton legal studies and business ethics professor G. Richard Shell:

  • Ask Presidents Clinton and Bush to co-mediate the dispute.
  • Devise an “unacceptable penalty” that would kick in if the two sides fail to reach an agreement by a set date. For example, begin permanently closing all national parks.
  • Change the negotiators: i.e., replace Obama and Boehner with a new representative from each party – people who still trust one another.
  • Invite participation by an authoritative and neutral third party that would structure a process for resolving the dispute. The government would return to work and the default would be delayed for three months while this process took place.
  • Ask the mayor of a small U.S. town – a political Independent from a swing state — to invite Obama and Boehner for a “backyard beer” to discuss the situation and come up with a solution.
  • Punt the issue down the road again by making an agreement that lasts only three months and then work on one of the other options on this list.

Wharton management professor Adam M. Grant:

  • Ask both sides to submit their fairest proposals, and invite Nelson Mandela to select the proposal that he views as fairer.
  • Invite the signers of the Giving Pledge to each donate $1 million abroad instead of domestically if agreement is not reached within a week.
  • Take both sides to visit elementary schools, explain to fifth graders why the government has shut down, and ask the children for proposals.

Wharton executive education senior fellow Mario Moussa:

  • Acknowledge that both sides have irreconcilable philosophies that make it hard to see the facts in the same way. Instead of trying to rush to agreement on substantive issues such as funding Obamacare or rolling back taxes on medical device companies, seek agreement on a process that would help resolve this impasse.
  • As part of this reconciliation process, consider organizing a community board of interested parties — Main Street investors, Wall Street titans,  governors, mayors, students and teachers, retirees — who publicly discuss what the debt issue means to them. Aim to define a set of interests that helps politicians move past entrenched positions.
  • Consider also involving economists and policy experts from the left and the right to create scenarios that illustrate the practical consequences of defaulting on our debt, [thereby] helping to tone down the overheated rhetoric that characterizes the current debate.
  • Have Obama and Boehner deputize a group of legislators to review the broad conclusions reached by the community representatives and experts, and propose various packages of agreements that address the underlying interests.
  • [Suggest] that this whole process take place in public, with the press offering gavel-to-gavel coverage. The transparency would help rebuild trust among the key players.

Wharton operations and information management professor Maurice E. Schweitzer:

  • Create an opportunity for both sides to save face. They have climbed up a tree and vowed not to come down. They each need a way to “claim” victory.

Wharton operations and information management practice professor Cade Massey offered the following thoughts as well:

My concern is less this negotiation than future negotiations that take this particular tack. My objective would be to avoid this type of governance/negotiation – using the credit standing of the government as leverage – regardless of which party holds which branch of government.

Negotiating in [such conditions] will guarantee that future legislative decision making will also take place under these circumstances. Of course, how to avoid that is its own question. It’s a bit like the cold war, with the best deterrence in the face of a nuclear threat being a commitment to respond in kind. The best response to a threat to default is a willingness to let the default happen. Without that willingness, there is no leverage. And without that, we will find ourselves here again.

 

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One Comment So Far

Samuel Price

This was a seriously amazing read and I’d like to come back and read even more if at all possible. I guess I’ll just check back later on.
Extraordinary job!
http://www.planperfectparty.com/