Ben Ringel Econ 400M

Can’t agree on the some of the simplest, non-partisan legislation: Highway and transportation funding Stabilizing the interest rates on federal student loans Protecting women from domestic violence 94% of registered voters believe Congressional gridlock is both hurting the U.S. economy, and lowering our standing in the world

“For the second year in a row but only the third time in the 30 years that National Journal has published these ratings, no Senate Democrat compiled a voting record to the right of any Senate Republican, and no Republican came down on the left of any Senate Democrat. (The first time this happened was 1999)” (Fox, 2012).

In an election season, especially, neither side wants to appear ‘weak’ Republican position: government spending and taxes on the wealthy are hurting production and raising the deficit Democratic position: generally support government spending and raising taxes on the wealthy Economists and budget experts agree that a mixed approach to spending and taxes is best for the long run

Players Democrats Republicans Strategies Stick to the party lines regarding typical budget policies Compromise on the budget and make some concessions to the other party

Republicans Party LinesCompromise Democrats Party Lines0,0*1,-1 Compromise-1,13,3*

Perfect information Repeated every year New budgets are legally mandated to be proposed and voted on annually Choices in real life aren’t as simple There are different degrees to which players can compromise The two players (Democrats and Republicans) may be composed differently in any given year Some politicians may get voted out of office, in which case new ones take their place Timing of the game could have an effect on the outcome In a year where many seats are up for re-election, players may have even more incentive to play the party lines

Represents a coordination game “games which exhibit multiple Nash equilibria which are Pareto-rankable” (Cooper et al., 1990) There are two pure strategy Nash equilibria When both players decide to play the party lines, and when both players decide to compromise The players are clearly better off when they both decide to compromise Each receive 3 in this situation, compared to receiving 0 when both play party lines

Congress has realized they will probably play the party lines N.E. Have not even bothered voting on or proposing a budget Don’t want to risk any voting or discussion that could be toxic to their re-election chances “Congress is legally required to consider a budget resolution every year, but there’s no penalty for not doing it, and no one has any standing to sue” (Chaddock, 2012).

Supreme Court justices are guaranteed their positions for life Don’t have to worry about getting re-elected or re- appointed Takes away disincentives for judges to rule how they truly feel Perhaps longer terms or some sort of tenure system could reduce incentives to avoid compromise in Congress?

Political action group with a 12 point plan to break gridlock, promote constructive discussion, and reduce polarization Get us to the pareto-optimal N.E. One part of the plan is to dock members of Congress pay for “each day that they fail to pass the budget and all appropriations bills for the next fiscal year before the prior fiscal year ends” (No Labels, 2012)