Ezra Klein points out that Republicans may not know it but they have won.
We don't yet know what the final deal to raise the debt ceiling will be. But now that Harry Reid is developing a proposal with $2.7 trillion in cuts and nothing in revenues, it's a safe bet that it won't include any tax increases. Which means that whether Republicans realize it or not, they've won. The question now is whether they can stop.
Originally, the Democratic position was that we should simply raise the debt ceiling. Republicans said "no." There would have to be a deal that reduced the deficit by at least $2.4 trillion -- which is the size of the debt ceiling increase needed to get us into 2013.
In short, Reid is expected to give the Republicans everything they initially said they wanted. However, no one seems to think the Republicans will accept the offer.
Rosalind Helderman, David Fahrenthold and Lori Montgomery at the Washington Post point out that there may not be enough time to get legislation passed and signed into law by August 2nd:
In the House, Republicans who took charge last year promising a new era of transparency have said they will not force votes on legislation that has been public for less than three days. Unless they reverse themselves on this new rule, the earliest the House could pass a bill would be Wednesday. A bill approved by the House that day would then take at least four to six days to make its way through the Senate. That timeline would conceivably allow a bill to reach Obama by the deadline — but only if there were agreement in both chambers, and so far there is none. A bill that starts in the Senate might not pass until Friday, setting up a final showdown vote in the House next weekend. The key point of contention now appears to be one of timing that, until now, did not appear to be terribly troublesome — whether the debt ceiling should be raised enough that Congress would not have to vote on the issue again before the 2012 election.
This from Great Britain on the damage right-wing nutters are causing:
The British government's business secretary, Vince Cable, summed up the U. S. debt situation as he saw it on the BBC this weekend: "The irony of the situation at the moment, with markets opening tomorrow morning, is that the biggest threat to the world financial system comes from a few right-wing nutters in the American Congress."