Gimme Two Steps

That’s where we’re at in the debt discussions, with the Speaker of the House saying a two-stage deal is the only “physically possible” option. Lori Montgomery explains the stages – a $900 billion hike of the debt limit, $1.2 trillion of cuts, and the “Super Congress” developing its own cuts for the future. This, theoretically, would be happening at the same time the Gang of Six was using its breathing room for a plan that could be more desirable than the newly empowered Posse of 12 – the people in that Super Congress.

This could be what Republicans introduce on Monday. What do Democrats have?

Mr. Reid, the Senate’s top Democrat, was trying on Sunday to cobble together a plan to raise the government’s debt limit by $2.4 trillion through the 2012 elections, with spending cuts of about $2.7 trillion that would not touch any of the entitlement programs that are dear to Democrats or raise taxes, which is anathema to Republicans.

Boehner gave a very slow and calculated performance on Fox News Sunday, but he sounded truly happy about this: “the debate is over how many trillions of dollars we can cut.” So it is, and the debate has, for now, staved off any noticeable market panic.