Once again, things fall apart in the debt ceiling talks. The way clear of this seems to me to be something like:
— Debt ceiling hiked by $2 trillion and paired with $2 trillion in spending cuts.
— House passes full extension of the Bush tax cuts.
— Harry Reid tries to bring extension of the middle class Bush tax cuts to the floor, but GOP filibusters.
— Bush tax cuts expire in 2012.
— Obama and GOP nominee fight it out in 2012.
This seems to me to achieve a substantive outcome better for progressives than the deal Obama is pushing for. At the same time in political terms achieves congressional republicans’ goal of avoiding an affirmative vote in favor of tax increases, and avoiding letting Obama play the Grand Bipartisan Dealmaker.