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President Obama and Congressional leaders at the White House, July 14, 2011.
President Obama and Congressional leaders at the White House, July 14, 2011. Chip Somodevilla/Getty Images
About the only thing certain right now in the debt-ceiling fight is that the yellow light has come on for negotiators who have pretty much run out of time to get a long-term deficit cutting deal done by the Aug. 2 deadline.
That's the date on which the U.S. Treasury says it will have exhausted all the financial tricks it has used since May to stave off a default by the federal government.
President Obama had set Friday, July 22, as the day when an agreement had to be reached so corresponding legislation could be drafted and passed on both sides of Capitol Hill. That would be tomorrow. You can't get there from here.
So now attention, of necessity, must turn to either a short-term deal that buys more time of the sort the president had, up until Wednesday, indicated he wouldn't sign or what we can call the McConnell Punt.
The punt proposal by Sen. Mitch McConnell of Kentucky, the Senate minority leader, would essentially give Obama the power to raise the debt ceiling on his own.
It would also include some level of spending cuts that are being negotiated now between McConnell and Sen. Harry Reid of Nevada, the majority leader.
Yes, there's the Gang of Six proposal that holds out the promise of nearly $4 trillion in spending cuts over ten years. But the conventional wisdom suggests there really isn't nearly enough time to get it through both chambers to fend off Defaultmageddon.
Which brings us back to a short-term stop gap that would put off the torching of the U.S. economy, which we're told would result from a default, by a few weeks at least.
But while you would think getting to a short-term extension would be less complicated since, by definition, expediency is supposed to be all about cutting corners, this being a very partisan, Tea Party era Washington, even the path of least resistance can be piled high with difficulty.
The Hill reports that there is some coalescing around a short-term proposal that would cut $1.5 trillion from spending over ten years:
Senate Majority Leader Harry Reid (D-Nev.) has signed off on the cuts, according to Senate sources. He wants to attach the spending reductions — which have not been released publicly — to a legislative proposal unveiled last week by Senate Republican Leader Mitch McConnell (Ky.) authorizing President Obama to raise the debt ceiling.
A Senate Democratic aide said the cuts would be added in the House to McConnell's and Reid's last-resort proposal to raise the debt limit, giving Republicans in the lower chamber a reason to vote for the compromise.
But House Republicans have other plans. They are considering pairing the $1.5 trillion in spending cuts with a $1.5 trillion increase in the debt ceiling, according to Senate GOP sources. Or they could take a portion of those cuts and match it with an equal amount increase in the debt limit.
One problem with this from the president's perspective, is that the a $1.5 trillion debt ceiling increase is significantly less than the $2.4 trillion increase the administration wants in order to put the next debt-ceiling fight past the 2012 general election.
So the president could veto the measure which, according to the story, would make congressional Republicans' day since they could then pin any default on him. In fact, some Republicans seem to be daring the president to veto such legislation.
Oh, then there's this other little problem. Senate Democrats say they wouldn't support it, meaning they would save the president the trouble of having to defeat it. From the National Journal:
Adam Jentleson, a spokesman for Senate Majority Leader Harry Reid, D-Nev., said Democrats would not back a short-term bill. "We would not back anything the president would not sign and my understanding is he will not sign that," Jentleson said.
So here's where we seem to be. There's apparently not enough time to do a long-term deal that raises the debt-ceiling beyond Election Day 2012 and achieves significant deficit reduction and not enough agreement on how to kick the proverbial can down the road.
If all of this makes you want to throw up your hands and ask to be awakened from this nightmare, you're not alone.