As the United States continues its inexorable approach to the date it defaults on its debt, the House and the Senate have assembled their own respective deals in the hopes of leaving the other holding the bag at zero hour. Yesterday Harry Reid and Mitch McConnell spent their day assembling a deal that would include, roughly:

  • Opening and funding the government through January 15
  • Raising the debt ceiling through February 7
  • Income verification of those receiving Obamacare subsidies
  • A delay of an Obamacare reinsurance tax that had been requested by unions
  • A budget committee to report back by December 13

Then they went home.

Instead of selling the plan to the Senate Republican conference, McConnell decided to wait until 11 a.m. today in order to get all his senators back into town and, possibly, to run out more of the clock so that the House would not have a chance to amend the Senate’s bill and send it back.

This morning, Robert Costa reported that

Instead, House Republicans are planning to pass their own proposal, including, roughly:

  • Opening and funding the government through January 15
  • Raising the debt ceiling through February 7
  • Income verification of those receiving Obamacare subsidies
  • A budget committee to report back by December 13
  • The medical device tax component of Obamacare would be delayed 2 years
  • Obamacare exchange subsidies would be stripped from members of Congress and cabinet members, but not staff (Vitter amendment-lite)
  • The Treasury would be barred from exercising “extraordinary measures” to stave off default, as it has been since this spring
  • The reinsurance tax would not be delayed

Michael Tackett of Bloomberg reports that

The consequences of crossing the debt ceiling and failing to repay US Treasury bonds would be, by all reasonable accounts, catastrophic.

As Brian Beutler reported at Salon this morning,

If three months ago I had told you that the debt-limit fight would end not with Democrats offering a concession to Republicans but with Republicans teaming up with Democrats to provide a concession to dreaded labor unions, you would’ve laughed me out of my job, and rightly so.

But here we are.

It is far too early to know where things will ultimately land, but Beutler subsequently reported that Senate Democrats are scrapping the pro-union measure after the House reaction. It derived from Reid and Obama stance, set out at the beginning, that “any policy ransom, no matter how small, is too large a price to pay for increasing the debt limit,” as they sought to amend that hard-line position with “Consensus items are fine. So are mutually agreeable swaps.”

The Reid-Obama intransigence has been a fine leverage position up to the present moment, as they have reaped the rewards of “standing strong” with their base while simultaneously watching Republicans tear their party to pieces and reverse everything they hoped to achieve.

But now that Boehner and the House are proceeding with a deal that leaves Obamacare largely intact, it is time for principled stands to yield to pragmatic agreement. The union giveaway was Reid trying to keep his theoretical point of negotiation sound to the last, taking advantage of Republican weakness to induce full capitulation. Today he took to the Senate floor to insist that the House proposal will not pass the Senate.

The stakes for the millions of innocent people of this country are too high, however, to risk economic catastrophe for one last turn of the screw.