The Debt Ceiling Crisis of 2011: a Failed “Crucial Conversation”

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The Debt Ceiling Crisis of 2011: A Failed “Crucial Conversation”

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July 27, 2012

The negotiations on the American Debt Ceiling, the method by which the United States' Congress determines and authorizes the limits to the country’s national spending, took place during the period between the end of 2009 and the summer of 2011. While the Congress had previously authorized increases in the Debt Ceiling with a significant degree of automatism, the 2011 negotiations took on a difficult and slow pace as the emergent influence of the right-wing Tea Party movement, and the Republican Party’s acquisition of a majority in the House of Representatives in the 2010 midterm election shifted Washington’ partisan balance (Formisano, 2012, 56-58). In the 2011 Debt Ceiling Crisis, the House-controlling Republicans refused to raise the Debt Ceiling absent significant reductions in government spending. In contrast, the Democratic Party, controlling the Senate and the Presidency, called upon the Republican-controlled House to increase revenue by raising the Debt Ceiling, and increasing taxes (Walker, 2012)

While an outcome was ultimately agreed upon through closed-door negotiations, and was later ratified by the House and Senate, the Debt Ceiling crisis itself led to a downgrade of the United States’ credit rating. As this case study will demonstrate, many negative characteristics of the negotiation process are responsible for this sub-optimal outcome. For one, the divergent frames of presentation used by the different sides in the debate led to an inability to achieve common meaning in the negotiations, and thus an inability to realize the common purpose underlying all of the parties to it. Moreover, the significant presence of hidden agendas, whereby parties to the Debt Ceiling debate were using the negotiations to win support for the upcoming 2012 General Election, also mired optimal negotiations in that neither party was actually...