WASHINGTON — Just before the Asian markets opened on Sunday night, President Obama announced a deal to raise the debt ceiling, avoiding what could have been a financial disaster come Monday morning.
I give Republicans credit for leveraging the debt ceiling vote — they grabbed control of the agenda. “Big win, I think, for the Republicans. Don’t tell the Democrats,” a pithy Republican e-mailed me with a bottom-line analysis of who came out ahead.
Along the way, however, some GOP hard-liners could not take yes for an answer — threatening our economy.
The Tea Party Republicans and other conservatives took the nation to the brink, pushing too close to the Aug. 2 default deadline for a deal that was not all that different than what had been on the table a few days ago.
The agreement — with major spending reductions — gives Republicans much of what they wanted while opening a rift with Democratic progressives for Obama because it puts cuts in Social Security, Medicare and Medicaid “entitlement” programs on the table while not at this time closing tax loopholes to generate more revenue.
House Democratic Leader Nancy Pelosi (D-Calif.) — who had been adamant about not touching entitlements — gave the deal a chilly reception, saying she will see “what level of support we can provide.”
The House Democratic progressive caucus will meet Monday to study the proposals. Rep. Jan Schakowsky (D-Ill.), a progressive leader, told me she will have great difficulty backing a plan that cuts entitlements.
Sen. Dick Durbin (D-Ill.) — the assistant majority leader — has been taking heat from progressives because he has been regarded as one of them — yet he has been willing to look at revamping entitlement programs.
“This deal is not perfect, nor the deal many of us would have made ourselves, but in the end and after weeks of partisan differences, both sides have come together and compromised to avoid an economic catastrophe,” Durbin said in a statement.
Earlier on Sunday, I talked with Sen. Mark Kirk (R-Ill.) as the deal was taking shape as he emerged from the Senate chamber. “This was a 40-year culture of borrowing that changed in 40 days,” Kirk said.
House Rep. Joe Walsh (R-Ill.) — the freshman who has become a Tea Party leader — whose profile soared during the past weeks of the debate over the deficit and debt ceiling — announced Sunday he will vote against the bipartisan agreement.
“I have made it clear from day one that I will never vote in favor of a debt ceiling increase unless it fundamentally changes the way Washington, D.C., spends money. I believe the way to do that is by statutory spending caps and a balanced budget amendment to the Constitution.”
If the hard-liners keep voting no, they will undermine their clout.
The uncompromising conservatives — those in the House Republican Study Group — were “completely overreaching,” Kirk said and will find themselves “vastly muted” with “limited influence going forward.”
Kirk told me White House Chief of Staff Bill Daley has been reaching out to him — the latest on Saturday. “We talked quite a bit. He just wanted advice [on] what would work.”
Kirk said they have been discussing the situation “every three or four days.”
“He’s a Chicago guy and we trust each other and I always wanted to be a friend of the Daley family as much as possible.”