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Obama Sticks With 'No Ransom' Strategy, Comes Out Ahead


Throughout the battle over the government shutdown and debt limit, President Obama repeated his view many times: So long as Republicans were threatening default, he would not negotiate.

PRESIDENT BARACK OBAMA: You don't negotiate by putting a gun to the other person's head.

INSKEEP: That strategy paid off for the Whitehouse, but it's not a strategy the president comes by naturally - as NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: President Obama arrived at his no negotiation approach, only after painful episodes when he did bargain with Republicans in the past. Shortly after his party's shellacking in the 2010 midterms, for example, Obama agreed to extend Bush era tax cuts for the wealthy. Fellow Democrats complained loudly that he'd given away the store, but with the economy still crawling out of recession, Obama said, he couldn't take the chance of a prolonged political stalemate.

OBAMA: I think it's tempting not to negotiate with hostage takers unless the hostage gets harmed, then people will question the wisdom of that strategy.

HORSLEY: In that Christmas 2010 agreement, Republican and Democrats both got some of what they wanted. Obama scored a payroll tax cut and other benefits for the middle class. It's a classic example of what Robert Mnookin of the Harvard program on negotiation calls the Obama bargaining style.

ROBERT MNOOKIN: President Obama's natural inclination, in my view, is to really try very hard to understand the other side's perspective, try to reach common ground. On the other hand, I think that he took a beating, you know, in these earlier negotiations.

HORSLEY: The low point came in the summer of 2011, during an earlier showdown over the debt limit. That confrontation brought hiring to a standstill, cost the government its AAA bond rating and ultimately produced the painful cuts in discretionary spending known as the sequester. It's also when the president decided he would never again negotiate with the threat of a government default hanging over his head.

OBAMA: At some point, we got to kind of break these habits and get back to the point where everybody understands that in negotiations there is give and there is take and you do not hold people hostage or engage in ransom taking to get 100 percent of your way.

HORSLEY: That hard line of the president's was backed up this fall by Senate Democratic Leader Harry Reid. He was every bit, a former boxer, as he brokered the final agreement.

SENATOR HARRY REID: I appreciate through all this the steady hand of President Obama to help guide us to this conclusion.

HORSLEY: Still, the president's no negotiation strategy was not without risk. The government was shut down for 16 days and the Democrats did not escape blame. Republican House Speaker John Boehner tried to paint the president as the one who was being unreasonable.

REPRESENTATIVE JOHN BOEHNER: The president's position that, listen, we're not going to sit down and talk to you until you surrender, is just not sustainable. It's not our system of government.

HORSLEY: But as the unpopular government shutdown dragged on, polls show the public heap most of the blame on Republicans. And in the end, with the threat of a government default looming, it was the Republicans who blinked.

JACK PITNEY: The president pretty much stuck to his guns and the approach worked.

HORSLEY: Political analyst Jack Pitney of Claremont McKenna College knows Republicans won no major concessions on Obamacare, despite the political beating they took. In fact, thanks to the distraction of the government shutdown, they missed a golden opportunity to shine a critical spotlight on the deeply flawed rollout of the new health insurance exchanges.

Pitney says Republicans will have to ask themselves whether it's worth trying this tactic again.

PITNEY: The president won this confrontation. Everybody knows it. And the Republicans aren't eager to get beat up again. Some of them will want to confront the president again, but I don't think most Republicans want to have a January that resembles their October.

HORSLEY: The real test of the president's strategy, then, is whether there's another round of brinkmanship this winter. Texas Senator Ted Cruz promised to continue his campaign against the healthcare law, but asked by a reporter last night if we'd be doing this again in a few months, Obama said simply, no. Scott Horsley, NPR News, the White House. Transcript provided by NPR, Copyright NPR.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.

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