Cut, Cap, and Balance is Dead. Long Live Cut, Cap, and Balance.

It may be temporary, it may just be a PR victory, but the conservatives appear to have won. The new version of the Boehner plan steps up the importance of a Balanced Budget Amendment – a key component of Cut, Cap, and Balance. So conservatives have ensured that the second bill that will pass the House will have some of the the same components that Democrats rejected in Cut, Cap, and Balance. And it may get fewer votes!

According to members leaving the conference just now, the Boehner plan will get this tweak: A balanced budget amendment will have to pass both chambers before the second “tranche” of the debt limit increase/cuts – $1.6 trillion – and whatever the Supercommittee recommends. Which kind of BBA? It doesn’t matter. Any kind. That’s different from Cut, Cap, and Balance in that the prior bill required a BBA “that contains a spending limitation as a percentage of GDP, and requires that tax increases be approved by a two-thirds vote in both Houses of Congress for their ratification,” and required it for any increase in the debt limit.

It’s still not enough for some hold-outs.

“If you save it for the second tranche, I’m not sure that it’s enforceable,” said Rep. Joe Walsh, R-Ill., still voting no. “We should do it now.”

Rep. Mike Pence, who was already won over by the prior plan’s promise of a BBA – no strings – was convinced that the new version had won over more conservative voters. He held out hope, despite what Democrats have been saying so far, that a long, “serious” debate about the BBA could be won.

Why do I say this may be a PR victory? If it works, Republicans can say what they wanted to say yesterday: “We’ve passed two bills, and the Senate hasn’t passed anything.” But they’d be in a weaker position than they were yesterday, because they’ve proven that they can’t pass a bill without a BBA hostage situation. How would markets react to the threat of an early 2012 debt limit vote that requires a supermajority for passage? We’ll never find out. All we found out this morning is that Boehner is as weak as Democrats said he was in his relationship with conservatives.