GOP insanity - our ace in the hole?

Another view on the debt ceiling battle from Ezra Klein:

I knew the White House wanted a compromise on the debt ceiling. I just didn't expect them to do quite so much, well, compromising.

Here's what appears to have been in the $4 trillion deal they offered the Republicans: A two-year increase in the Medicare eligibility age. Chained-CPI, which amounts to a $200 billion cut to Social Security benefits. A tax-reform component that would raise $800 billion and preempt the expiration of the Bush tax cuts -- which would mean, for those following along at home, that the deal would only include half as much revenue as the fiscal commission recommended, and when you add the effect of making the Bush tax cuts a permanent part of the code, would net out to a tax cut of more than $3 trillion when compared to current law.

That last bit apparently killed the deal. It But it was actually the biggest concession on the table.

Currently, Democrats are bargaining for some revenues now, with the option of forcing much more in revenues later. All they need to do to get $4 trillion in revenues next year is fail to come to an agreement with the Republican Party. And is there anything Congress is better at than not agreeing?

The deal Obama offered Boehner would've traded away the option to force much more in revenues later in order to get slightly more in revenues now. And it would have thrown in a slew of entitlement cuts and spending cuts as a sweetener.

In part, this is because the Obama administration, much to the disappointment of liberals, doesn't value the option to fight over taxes in 2012. They'd prefer to finish the debt debates now and move onto other issues after the election. They have no intention of letting the Bush tax cuts lapse in full, and since they're privately unsure that congressional Democrats will stand with them to let the cuts expire for incomes beneath $1,000,000, they don't see much upside in beginning their hoped-for second term with a bruising battle over taxes.

But they also know that if they get to 2012 without a deal, they're going to have to engage that fight whether they want to or not. And Republicans made that a lot more likely this week. The reality is that liberals should be sending Eric Cantor a fruit basket. It's increasingly clear that he has not only saved them from a deal they'd hate, but also stopped Obama from giving up a fight they want to have later.