There were two reports yesterday of an imminent deal on the debt ceiling, but both plans fell apart within hours. A complication is that House Republicans must seek a solution that doesn’t involve breaking up the dysfunctional alliance between the Republican Party and the Tea Party. It is no victory for Republicans if they save their country but lose their party, yet the Tea Party has made it clear they won’t mind destroying both if that’s what it takes. Another complicating factor is that while the Treasury will run out of money and start delaying payments on Thursday or Friday, Congress seems to see Sunday night as their deadline. It is a setup for a Sunday night crash in the House, followed by stock market crash the next morning — because after Sunday, every day is a step backward to the tune of a few billion dollars, making it very hard to form an agreement in principle that means anything while working at the speed of Congress.
House leaders want to go right up to the edge because they think it gives them more leverage, but then when the time comes they don’t have the basic vitality it takes to get their work done. If recent history is a guide, the House will meet Sunday, but end up not taking a vote. Of course, it is foolish to suggest a prediction, but even more foolish to just assume that when push comes to shove, the House Republican caucus will be able to agree among themselves.