Debt-Ceiling Crisis Abated … for Now

August 3, 2011 by  
Filed under Newsmakers, Politics

President Obama puts the finishing touches on his speech Tuesday. (Official White House Photo by Pete Souza)

When the debt-ceiling crisis of 2011 finally became history, most Americans were extremely relieved to know that the United States would not have to default on its obligations. The armed forces at home and abroad, veterans, the poor, the disabled, the elderly and the millions of Americans on the federal payroll or contracted by the government will continue to receive their checks at least until the end of 2012.

Some of the other short-term winners are recipients of Social Security and Medicaid (but not Medicare); people who don’t want any change in the tax code; people who don’t think we should be the world’s policeman or expand the American Empire (the defense budget will take a big hit). President Obama and Democrats seeking re-election are the biggest winners. They will not have to defend a vote to raise the debt ceiling again before Election Day. This was, in fact, the major concession won by the Democrats.

Among the losers, the once-sacrosanct Department of Defense will be humbled: the Pentagon will sustain $350 billion in immediate cuts and a possible $600 billion more over the next 10 years. Infrastructure, research, clean energy, education — these are certainly losers. There will be little support for them. The jobless will lose extended unemployment benefits — $60 billion — as of Jan. 1.

The economy may be a loser as well, despite Moody’s announcement Tuesday that it would not downgrade the AAA credit rating of the United States. Keep in mind that the result of all the scheduled cuts is much less spending and investing in an already weak economy. The public sector lost 39,000 jobs in June alone. So far this year, almost 100,000 employees in local government have lost their jobs because of spending cuts. The cuts yet to be enacted as a result of the debt-ceiling deal will add still more people to the ranks of the unemployed. How will that reduce the deficit?

Our biggest problem is unemployment, not the public debt. A strong work force would make a big dent in the deficit. Far from attempting to solve the unemployment problem, the debt agreement exacerbates it. The economic recovery is faltering now because there isn’t enough consumer demand. Yet the debt-ceiling deal will result in still less demand as the government is forced to cut jobs and fire contractors. Demand previously created by government spending will wither away, and government liability will increase in the form of unemployment insurance, food stamps, etc. Added to the negative balance is the forfeited tax revenue that would have been collected if workers had not lost their jobs. Consequently, spending cuts may turn out to be counterproductive if they increase rather than reduce the deficit. Cynics say that Republicans may actually welcome a deeper and more prolonged recession because continued joblessness and a limping economy would work against the Democrats — and Obama in particular — in the next election.

No one is happy. The Tea Party isn’t satisfied with the savings projected by spending cuts they deem to be insufficient. Democrats bemoan the lack of revenue. As we know, in a compromise nobody gets what he wants. The best one can say is that the nation avoided default.

But what does that mean? When was the good faith and credit of the United States ever placed in doubt before? A domestic, self-inflicted crisis has eroded international faith in the dollar and tarnished America’s image.

The biggest loser, then, is American democracy. If there was any doubt before, now there is no question that the checks and balances written into the Constitution have been circumvented, rendering the legislative branch all but dysfunctional. The filibuster has a colorful history. Intended to protect the minority, its abuse makes a mockery of majority rule. In the last decade, the frequency of its use has soared. Now practically nothing can be passed in the Senate without a super-majority, rather than the simple majority dictated by the Constitution. The resolution of the debt-ceiling crisis set a precedent. From now on, the debt ceiling will be tied to spending cuts. A minority can coerce the majority into accepting its demands.

Grover Norquist, arguably one of the most powerful men in Washington (any Republican running for office must sign his no-new-tax pledge), said Monday:

[T]here is a new rule in town. The Boehner Rule: Any increase in the debt ceiling will require a reduction in federal spending by the same amount of the debt ceiling increase.

Senate Minority Leader Mitch McConnell confirmed that Monday:

YouTube Preview Image

McConnell promised that in the future the debt ceiling will be held hostage to Republican priorities:

[The debt ceiling debate] set the template for the future. In the future, Neil, no president—in the near future, maybe in the distant future—is going to be able to get the debt ceiling increased without a re-ignition of the same discussion of how do we cut spending and get America headed in the right direction. I expect the next president, whoever that is, is going to be asking us to raise the debt ceiling again in 2013, so we’ll be doing it all over.

When Somali pirates held Americans hostage two years ago in anticipation of receiving a grand ransom, the president countered with a swift, clean strike. Two years ago he knew better than to negotiate with terrorists for fear of emboldening them.

Debt Ceiling Update: Did Obama Sabotage Talks With GOP?

July 30, 2011 by  
Filed under Newsmakers, Politics

Photo: Architect of the Capitol

As the epic conflict over the debt ceiling draws on, President Obama is besieged by denunciations from the right while fielding a blitz of disapproval from the angry left. The Democrats feel betrayed by his apparent willingness to sell the farm by agreeing to spending cuts demanded by Republicans to programs dear to Democrats. Obama has also been accused during the past week of being too removed from the fray after he and Speaker John Boehner reached an impasse, and negotiations over raising the debt ceiling moved to Congress.

Lawrence O’Donnnell, an MSNBC talk show host who has first-hand knowledge of how congressional negotiations work, rejects that idea. (He served as a key legislative aide to Sen. Daniel Patrick Moynihan from 1989 to 1995.) O’Donnell believes the president has been very much involved — albeit behind the scenes — and is, in fact, orchestrating the entire drama. Unbeknownst to all the other players, theorizes O’Donnell, Obama never had any intention of agreeing to the cuts in Medicare and Social Security so painful to Democrats and so desired by Republicans. He may well have sabotaged the negotiation with Boehner to ensure the Republicans wouldn’t accept his offer. After the speaker had made the huge (for a Republican) concession of allowing $800 billion in tax increases, Obama called him and left a message asking for a 50 percent increase to $1.2 trillion in revenue. The president had to know that Boehner could never agree to such a large sum. (It is widely thought that Boehner walked out of his talks with the president because he knew he couldn’t sell the deal to his caucus.) Boehner was right — he couldn’t muster the votes to pass even the Republicans’ own plan. The president instead gained points with the public for being reasonable. He can now say he was willing to give, while the Republicans would only take. Of course, Obama also knew that his bluff would never be called, because his own party would have rejected the concessions he made.

We are now in the “stunt game” stage of the process, O’Donnell said on Thursday morning. On the other side of the aisle, the speaker is fully aware that the Democrats won’t accept the demands of the Tea Party faction of his members. He also knows that any Republican budget proposal will need Democratic votes to pass — but he didn’t expect to lack the necessary Republican votes. After 20 years in Congress, Boehner knows his way around Washington, so he also knows what to do to convince recalcitrant House members to vote for a distasteful bill.

Well, he thought he did. First he let the House pass the “Cut, Cap and Balance” bill (far more extreme than Rep. Paul Ryan’s plan, excoriated by Democrats), knowing it would die in the Senate. The speaker himself touted the virtues of the bill to gain credibility with the Tea Party. Boehner figured, O’Donnell believes, that that was the only way to convince the freshmen members of the futility of their demands and introduce them to the practical realities of a divided government. As Boehner had foreseen, Majority Leader Harry Reid immediately tabled “Cut, Cap and Balance,” essentially killing it. Boehner’s tactic should have been enough, and in previous years it would have been. But Boehner hadn’t reckoned with the extent of the freshmen’s intransigence and commitment to their pledges of shrinking the deficit exclusively with spending cuts.

The House majority fashioned another bill. It too, was rejected by the Senate. The Republicans wrote a third bill, but Boehner had to postpone the vote scheduled for Thursday afternoon, an implicit admission that the Republicans still weren’t able to agree among themselves. By Friday evening, Boehner had threatened or cajoled enough of his caucus to pass the bill. It squeaked by with a vote of 218-210, with no Democrats joining the slim majority. But to no avail: that bill too was quickly dismissed by the Senate.

The ball has landed in the Senate’s court. It was up to the Democratic majority to construct a bill that would be acceptable to the Republican-controlled House. On Saturday afternoon, however, the ball was forced out of bounds. Forty-three Republican senators wrote to Reid announcing they would not vote for the bill, meaning the legislation as it stands won’t make it out of the Senate. And the minority leader, Mitch McConnell (R-Ky.), said he would only negotiate with the president. Meanwhile, the House went ahead and voted on the Reid plan — even though the Senate has not — and rejected it by 173-246.

In the Senate, Reid is three votes short of the 60-vote super-majority insisted upon by the Republicans. The majority leader will have to either wheedle those votes from the Republican minority or convince them to vote with a simple majority. He does have one slim ray of hope: four Republican moderates didn’t sign the letter. One of them, Sen. Scott Brown (R-Mass.), said on Friday that he could vote on Reid’s plan as it stands.

With Tuesday’s sword of Damocles hanging over Congress and the nation, McConnell and Boehner held a news conference Saturday afternoon in which the Senate minority leader said that he believed the president was now fully engaged in the debate and that he believed a solution could be reached. “I’m confident and optimistic that we’re going to get an agreement in the very near future and resolve this crisis in the best interests of the American people,” McConnell said. Meanwhile, Reid and the House minority leader, Nancy Pelosi, were meeting with the president at the White House. After that meeting, Reid said the were no closer to a deal.

What got people at least talking again? No one has said specifically, but one theory has it that troops in Afghanistan may have jolted the politicians into action when they asked Adm. Mike Mullen if they would be paid if a deal isn’t reached on the debt ceiling. “I actually don’t know the answer to that question,” said Mullen, chairman of the Joint Chiefs of Staff. He added: “I have confidence that at some point in time, whatever compensation you are owed, you will be given.”

Newsflash: Senate Votes Down Boehner’s Bill on Debt Ceiling

July 29, 2011 by  
Filed under Newsmakers, Politics

C-SPAN

Without a single Democratic vote, the Republican-controlled House passed on Friday night a bill offered by Speaker John Boehner to raise the debt ceiling in two stages, with the second stage of the increase contingent on passage of a constitutional amendment requiring a balanced budget. The vote was 218-210. But the Senate quickly voted, 59-41, to defeat the measure.

Even though Boehner’s bill was considered “dead on arrival” in the Senate, it was hoped in some quarters that it would open the way to negotiations on a Senate measure that could become the mechanism for raising the debt ceiling. The thought was that with some revisions a bill could be crafted that could be approved by the House, even if it did not have the support of Republicans aligned with the Tea Party Movement. But that hope came to an abrupt end.

Sen. Kent Conrad (D-N.D.) said on MSNBC on Friday night that a solution in the Senate is by no means a sure thing. The Senate minority leader, Mitch McConnell (R-Ky.), has said that he will not negotiate with the Senate majority leader, Harry Reid (D-Nev.), and that he will negotiate only with President Obama, according to Conrad, chairman of the Senate Budget Committee. Further, McConnell has indicated that the Republicans intend to filibuster, which would push the earliest time the Senate could vote right up against the deadline of Aug. 2, the date that the United States is projected to go into default.

The Boehner plan, revised from an earlier proposal that failed to gain enough support for passage, calls for raising the debt limit by $900 billion and for cutting spending by $917 billion. That is projected take the government through February or March.

The second stage would authorize the president to raise the debt limit by an additional $1.6 trillion if a bipartisan committee of 12 lawmakers could identify $1.8 trillion in cuts before the end of the year and if Congress sends a balanced-budget amendment to the states for ratification.

D-Day Minus 6: Countdown to Default?

July 27, 2011 by  
Filed under Newsmakers, Politics, World

CBS News

Six days before the United States will have insufficient funds to pay all its creditors, Republicans and Democrats have yet to reach an agreement on how to avoid default and obviate a momentous downgrade of the nation’s credit rating. Hanging on the outcome of the debt-ceiling crisis are interest rates on U.S. Treasury bonds and consequently, all loans; the salaries of millions of federal employees, including active-duty military; payments to the millions who depend on Social Security and Medicare — all these and more.

Republicans and Democrats have grown far apart in their visions for the country’s future and how to get there. As a result, the government is not merely divided; it is dysfunctional. The leaders of the two parties, President Obama and Speaker John Boehner, having reached an impasse in the negotiations, addressed the nation on Monday night to present their cases to the American people.

The differences between the two men wasn’t limited to their proposals — they also differed sharply in tone. The president was on a charm offensive and Boehner was combative. Obama credited Boehner with putting politics aside to work alongside him and admitted that “neither party is blameless.” Boehner credited Obama with creating “the ‘crisis’ atmosphere.” He characterized the Democrats’ “balanced approach” as “we spend more . . . you pay more.” (Nancy Pelosi later said about the difference between the budget proposals, “We get the sacrifice, they get the wealth.”)

Obama and Boehner had different audiences. In addition to influencing voters, Obama was trying to calm the fears of governments and individuals worldwide who are invested in U.S. Treasury bonds. Boehner’s task was more difficult. He had to speak to both the moderates and the radicals in a divided Republican caucus, the seasoned legislators and the newly arrived freshmen who have yet to learn the art of governing. To appease these radicals, Boehner used fiery rhetoric and twisted the truth somewhat out of shape. The high unemployment rate, he said, was largely a result of the Democrats’ “spending binge.” He called the vote on the Republican Cut, Cap and Balance Act bipartisan, even though only five of the 186 Democrats in the House joined 229 Republicans in voting for the measure.

The president wound up his talk with an appeal to citizens to call their representatives in Congress and let them know what they wanted. The congressional switchboards were shut down by the ensuing deluge of calls.

Boehner’s position and his political future may well depend on his ability to reconcile two mutually exclusive aims. He has to craft a bill that will be acceptable to Democrats and also have it approved by the many in his caucus who don’t want to raise the debt ceiling under any circumstances. On Tuesday, Boehner was faced with the certainty that he didn’t have enough Republican votes to pass his budget proposal. Later in the day he was hit with bad news from the Congressional Budget Office: his plan as written missed a key Republican goal — to cut spending by a greater amount than the new debt ceiling. Instead of saving $1.2 trillion in 10 years through spending cuts as predicted, Boehner’s plan would save only $850 billion. Senate Majority Leader Harry Reid’s plan saved more than the Republican plan, even though it didn’t save as much as advertised. Boehner had to postpone the vote he had scheduled in the House until a quickly rewritten plan could be ready.

On Wednesday, the threat of a downgraded credit rating receded when Standard & Poor’s president revealed he thought it unlikely that the United States would default on its debt. The financial markets, however, registered their dismay at the inability of Congress to approve the debt ceiling and avoid default. All the indices closed sharply down from the day before.

Yet the threat of default is a manufactured, self-inflicted crisis that can be resolved immediately with a bill containing a single line authorizing an increase in the debt ceiling. The debt limit itself is superfluous. It has nothing to do with the deficit or future expenses incurred by future programs. The deficit exists because Congress created it by enacting programs that must be paid for. In that sense, the debt limit has already been set. It applies to money that is already spent in the same way a consumer incurs debt by charging purchases to his credit card with the understanding that he will pay for them at a later date. The bank that issues the credit card sets the consumer’s debt limit for current and future purchases. It can’t set a retroactive limit, which is akin to what the Republicans are attempting to do.

James Surowiecki notes that the debt ceiling places Obama in a paradoxical bind: If the debt limit isn’t raised, the president will have to either cut back or eliminate programs authorized by Congress, i.e., he will unconstitutionally override Congress. And if he spends the money that is already authorized, he will violate the debt ceiling law.

The debt limit has nothing to do with the deficit, which is the negative difference between the government’s revenue and the money it is already committed to pay. Linking the two is a political ploy. The Republicans know that avoiding default matters more to the Democrats. A default would wreak havoc on the economy and thereby jeopardize Obama’s and many Democrats’ chances for re-election. Obama wants to raise the ceiling enough to ensure the government will be financed past the 2012 elections. The Republicans want to raise it only enough to last until early next year, so that another conflict like the current one will consume the Democrats during the election season.

Except for that major difference, the two plans have a lot in common. Neither calls for an increase in revenue, a key demand of the Democrats until now. The Boehner plan as outlined before it was withdrawn late Tuesday had two phases. In the first phase the debt limit would be increased to $1 trillion and spending would be cut by $1.2 trillion, actually $850 billion as scored by the CBO. Future spending would be capped. In addition, it would require Congress to vote on a balanced budget amendment. In the second phase a bipartisan committee would have to find an additional $1.8 trillion in savings, for a two-phase total of $3 trillion. Only then could the debt limit be raised to $1.6 trillion. The Reid plan proposed to cut spending by $2.7 trillion (but $2.2 trillion per the CBO). All projections are for a 10-year period.

By late Wednesday, the two sides seemed to be if not coming together, at least cautiously approaching. Both worked on refining the numbers in accordance with the CBO estimates, and Boehner sharply warned his caucus in the House that they had to pass the bill in its final form. “I think we’re going to solve this,” said Sen. Richard J. Durbin (D-Ill.).

It is by no means certain. But difficult to contemplate that we might not.

Clock Is Ticking Down With No Debt-Ceiling Accord

July 23, 2011 by  
Filed under Newsmakers, Politics

“We have now run out of time,” the president declared on Friday.

Up to now, the financial markets have remained remarkably sanguine, sharing the widely-held assumption that for the United States to default on its debt is unthinkable. After all, U.S. Treasury bonds are the safest investment in the world — so much so that every major financial institution worldwide holds Treasuries as rock-solid insurance. But now, with the Aug. 2 deadline only 10 days away, negotiations stalled and no hint of compromise, the unthinkable is becoming real.

On Friday afternoon, Speaker John Boehner announced he could no longer negotiate with the president. “The White House is simply not serious,” he said. “In the end, we couldn’t connect — not because of different personalities, because of different visions for our country.” Those visions consist essentially in the Democrats’ reliance on the ability of government to protect the general welfare and especially the poor, the sick and the elderly, versus the Republicans’ conviction that the prosperity and the salvation of the country lie in a marketplace unencumbered by taxes or regulations.

Boehner left Obama “standing at the altar,” as the president said at the press conference he hastily called in response. Obama made clear his anger and frustration: “Can the Republicans say ‘yes’ to anything?” Their talks foundered, it seems, on the issue of revenue — taxes — yet again. Still, Obama knows that throwing in the towel is not an option, as does Boehner, who returned to Congress in an attempt to reach a deal. The president summoned the congressional leaders to the White House for an emergency meeting Saturday morning. That meeting lasted less than an hour. The president, aware of a warning from credit-rating agencies that the AAA rating of the United States will be downgraded unless the debt ceiling is raised in time to prevent a default, sent the leaders back to their members to find a way forward. He stands firm in his opposition to a short-term solution that would plunge the nation back into crisis within months.

The clock, as they say, is ticking, and many think that unless a deal is reached by Sunday, the markets will start to react on Monday, setting in motion a financial crisis that may be unstoppable.

The kabuki playing in Washington — the charges and countercharges, the refusals to continue negotiating, the crafting and dismissing of one unrealistic plan after another to resolve the debt-ceiling crisis — is grand farce for the disinterested bystander, if such exists. But this political theater may be a tragedy. There is no one who doesn’t have a stake in the success of the effort to raise the debt ceiling, because default will affect every single American.

Analysts are in agreement that financial markets will plummet, instantly wiping out trillions of dollars in assets worldwide. Interest rates will spike, thereby increasing the deficit, because the Treasury will owe much more in interest payments. The cost of most kinds of debt will rise: mortgages, personal and business loans, credit card debt, auto loans, hospital and municipal bonds. Obama and Treasury Secretary Tim Geithner have been discussing contingency plans, debating which payments will be made and what parts of government will have to shut down. If interest on the debt is paid and checks go out to Social Security, Medicare and Medicaid beneficiaries, and the troops are supplied, there will be nothing left for anything else. Homeland Security, the FBI, air traffic controllers, airport security staff, the Pentagon — in short, every other part of the government will shut down on Aug. 3. Millions of people will be instantly thrown out of work. We would see an economic and social cataclysm considerably worse than the Great Depression. It is not an exaggeration to say that the fate of the world is precariously perched on the shoulders of a few intransigent members of Congress.

Debt-Ceiling Deal Appears Closer to Becoming Reality

July 20, 2011 by  
Filed under Politics

The debt-ceiling Armageddon being fought in Washington has never been chiefly about money. Because everyone except the most extreme members of the Tea Party Movement knows that the debt limit must be raised, Republicans are holding it hostage to exact acceptance of their conservative agenda. They know that the Democrats controlling the presidency and the Senate will never agree to scale back Social Security and other social programs. All but a very few Republicans are inexorably opposed to any tax increase, including the closing of loopholes that would result in higher taxes for individuals or corporations. Seizing the opportunity offered by the moment, they would force far-reaching cuts in public programs as the price of preventing the United States from defaulting on its debts.

Driving the conservative agenda is the determination to shrink the size of government by “starving the beast” — defunding it by steadily lowering taxes — a theory adopted by Republicans in the 1970s. The assumption was that the decreased revenue would compel cutbacks in spending, especially on the social network programs (Social Security, Medicare, Medicaid) enacted by Democrats. Republicans wanted to prune those programs drastically or, ideally, eliminate them entirely.

Despite the demonstrated failure of “starving the beast,” today’s Republicans are still set on the same objectives. In the debt-ceiling negotiations they have insisted on both spending and tax cuts. President Obama offered them a deal that reportedly would have cut the deficit by $4 trillion in 10 years, raised the eligibility age for Medicare and cut Social Security benefits by switching to the chained-CPI. But Republicans refused to consider it, because the package also included a tax-reform provision and would have let the Bush-era tax cuts expire in 2012. The Senate minority leader, Mitch McConnell, knew that the president’s plan would force Republicans to “either sign onto a bad deal that raises taxes or go into default and allow us to have co-ownership of a bad economy.”

Not surprisingly, throughout this white-knuckle debate, rivalries, political maneuvering and not-so-hidden agendas have been simmering barely below the surface. Obama may have been “pulling an anti-Corleone, making Republicans an offer they can’t accept,” wrote Paul Krugman. Obama’s goal in putting Medicare and Social Security on the table may have been “to paint the G.O.P. into a corner, making Republicans look like intransigent extremists.” The president has been portraying himself as the only adult in the room, and polls confirm that Americans accept that view. Gambling that the Republicans wouldn’t accept his $4 trillion deal, Obama could safely earn points for offering to sacrifice the sacred cows of the Democrats.

Now that the noose is starting to tighten as Aug. 2 is less than two weeks away, Republican leaders realize that the time for posturing and grandstanding is over. But how to renege on their pledge not to raise the debt ceiling without severe spending cuts, particularly in the social programs, and with nary a tax increase? Sen. Lindsey Graham (R-S.C.) admits they are in a tight bind. “Our problem is, we made a big deal about this for three months,” he said. “How many Republicans have been on TV saying, ‘I am not going to raise the debt limit’?” Graham asked, admitting he had been one of those. “We have no one to blame but ourselves.”

McConnell has made very clear that his “single most important political goal … is for President Obama to be a one-term president.” McConnell made no bones about his motivation in designing a fallback plan that would be electoral poison for Democrats — his proposal allows them to raise the debt ceiling, but in three installments and with no Republican votes. “I refuse to help Barack Obama get re-elected by marching Republicans into a position where we have co-ownership of a bad economy,” said McConnell. Of course, Democrats in swing or conservative districts who voted three times before the election in favor of raising the debt limit without guaranteed spending cuts would have a scant chance of being re-elected.

Eric Cantor (R-Va.) appears to be challenging the position of John Boehner (R-Ohio) as top dog in the House. Cantor speaks for the House Republicans who have vowed not to raise taxes under any condition. Boehner instead accepts that some agreement must be reached, because not raising the debt ceiling “would be a financial disaster, not only for our country but for the worldwide economy.”

There is also a discernible rift between the Republican leaders and the rank and file. Speaker Boehner had indicated he could cut a deal with the president — one that would of necessity involve some “revenue” or tax increase — but he was forced to back down because he didn’t have the votes. At least 60 members of his caucus, he said, “won’t vote to raise the debt ceiling under any circumstances.” Neither Boehner nor McConnell are in favor of increasing taxes, a component of any deal Obama and the Democrats would approve, but they understand the imperative of maintaining the “full faith and credit” of the United States.

The most committed (or intransigent, take your pick) Tea Party Republicans, however, believe the predictions of financial collapse and global calamity are overblown. Last week presidential hopeful Michele Bachmann (R-Minn.) said that default “is a misnomer that I believe that the president and the Treasury secretary have been trying to pass off on the American people, and it’s this: That if Congress fails to raise the debt ceiling by $2.5 trillion, that somehow the United States will go into default and we will lose the full faith and credit of the United States. That is simply not true.”

Supporters of the Tea Party Movement, like Bachmann, don’t fear the specter of default. They believe it could work in their favor, because if the Treasury hasn’t the money to both pay its creditors and meet its domestic obligations, it will have no choice but to reduce spending — the primary Tea Party goal.

In addition to the intricate choreography played out by the various players, the leads and the chorus, we are also witnessing what would be a farce, were the stakes not so high. Rome burns and Nero fiddles. On Tuesday the House spent the day debating then voting on a plan that everyone knew could never vault the Senate’s Democratic phalanx. The Republican passage of “Cut, Cap and Balance” was intended to reassure their constituents. It mandates drastic cuts — more than $100 billion in 2012, a future spending cap of 18 percent of the total economy (a level not seen since the 1960s) and a constitutional amendment requiring a balanced budget, which would effectively rule out any tax increases ever. The object of the exercise was to provide political cover for the Republicans who would have to vote to increase the debt limit.

At the same time, word spread that what had been a moribund bipartisan budget plan in the Senate had roared back to life. Like Obama’s rejected plan, it would reduce deficits by $4 trillion in the next decade. It also includes steep cuts in spending and new revenues from tax-code reform. The president embraced it, and 49 senators on both sides of the aisle look on it favorably. The financial markets signaled their relief that the debt-limit crisis has a resolution in sight with a strong rally.

The single cloud on the horizon is an ominous thunderhead. Will the Tea Party members of the House sign off on a plan that violates their stated deepest convictions?

Video Pick: Politicos vs. News Hounds on the Softball Diamond

It wasn’t “Casey at the Bat” on Wednesday night in Washington. Instead, it was congresswomen at the plate and in the field, taking on women from the news media in a softball game to raise money for the Young Survivors Coalition, an organization that deals with breast cancer issues. The congresswomen, led by captains Kelly Ayotte, Jo Ann Emerson, Kirsten Gillibrand and Debbie Wasserman Schultz, found that their early-morning practices paid off as they defeated the newswomen, 5-4. Wasserman Schultz got the game-winning RBI as Linda Sanchez scored the winning run. On the losing side were such players as Dana Bash of CNN, Jackie Kucinich of USA Today, Lynn Sweet of the Chicago Sun-Times and Amy Walter of ABC News. The game was a festive event with Justice Sonia Sotomayor throwing out the first pitch, which she did get over the plate, and Speaker John Boehner and Minority Leader Nancy Pelosi both making appearances, although not at the same time. The cry from the newswomen when all was said and done, “Wait till next year.”