1. A President’s Prisoner’s Dilemma Budgetary Veto Politics

2. Divided Government After the 1994 election, the Republicans controlled both the Senate and the House while Democrat President Clinton was in the White House. After winning the House for the first time in decades, Speaker Gingrich wanted to push the Republican budgetary agenda. –This included cutting spending for domestic programs beyond what President Clinton would support.

3. A Veto Threat Once the Republican Congress passed a 1996 fiscal year budget that President Clinton did not like, he had to make a choice. –Should he veto the budget bill? President Clinton knew that there were not enough votes in Congress to override his veto so that if he vetoed the budget bill most of the federal government would be shut down.

4. Potential for Compromise Once Speaker Gingrich learned of the veto threat, he had to make a choice. –Should he compromise on the budget legislation so President Clinton would not veto it? Speaker Gingrich knew that any compromise would be viewed by other Republicans very negatively, yet he also knew that if there was no compromise most of the federal government would be shut down.

5. Best Case vs. Worst Case In the best case scenario, Gingrich would take the veto threat seriously and begin negotiations so Clinton would sign the budget. –A more moderate version of the budget would be passed, and the federal government would not close down. In the worst case scenario, Gingrich would not compromise, and Clinton would veto the budget. –The federal government would shut down indefinitely, likely causing public disapproval.

6. CompromiseNo Compromise No VetoBoth Gingrich and Clinton would have to compromise, and each would lose some partisan support. The government would remain open. Clinton would lose a lot of Democratic support if he signed a budget he strongly opposed. Gingrich would have lots of Republican support for remaining firm. The government would remain open. VetoClinton would have a lot of Democratic support for not signing the budget even with some minor changes. Gingrich would lose a lot of Republican support as he did not stand firm. The government would shut down. Both Gingrich and Clinton would retain a lot of partisan support for remaining tough, but the government would shut down. How would this play to the public at large? Gingrich’s Options Clinton’s Options

7. What Action to Take? Both Clinton and Gingrich have an incentive to retain the support of their partisans, so they would veto the bill and not compromise on changes, respectively. –That would lead to the bottom right hand box; the government would shut down! This is what happened late in 1995. This was the worst case scenario – but how long could it last?

8. Public Opinion Public disapproval of the shutdown did not impact President Clinton and Speaker Gingrich equally. –Most of the blame fell on Speaker Gingrich. As a result, most of the compromise needed in order for the government to open again came from the Republican side as President Clinton was in the stronger position.

9. President Clinton “Won” Although both Clinton and Gingrich adopted what appeared to be the worst possible position, in reality public opinion only punished Gingrich. As a result, President Clinton won this round of the Prisoner’s Dilemma despite his actions. –Had public opinion been different, he would not have fared so well!