1. Obama calls debt talks constructive, but big gaps remain (NYT):
To the degree that any deal wins bipartisan support on slowing the growth of Medicare, for example, it would deprive Democrats of what has been one of their most potent arguments heading into 2012: their assertion that Republicans would gut the traditional Medicare system and leave older Americans vulnerable to rapidly rising health care costs.
2. What happens on August 3? (Felix Salmon):
Purely as a practical matter, it’s far from clear that it’s even possible to stop making the 3 million payments that Treasury makes automatically every day. Doing so involves a massive computer-reprogramming effort which I’m sure could not be implemented overnight. . . .
At that point — and no earlier — there would be enormous pressure on the White House to pull out the 14th Amendment and declare the debt ceiling unconstitutional, if only for practical reasons. . . .
Now that the Republicans can see how much leverage the debt ceiling gives them, they’re going to pull this stunt every time it gets near.
3. Liberal Democrats have leverage on debt deal (FiveThirtyEight):
A vote on a deal is a potential triple whammy for members of Congress. Raising the debt limit, in and of itself, is unpopular. So is cutting or amending popular entitlement programs. The cherry on top are potential tax increases — although since some of the revenue raisers on the table poll reasonably well, that is likely to be more of a problem for Republicans than Democrats.
4. Shame on them (Economist):
Until they started to play hardball in this way, Mr Obama had been deplorably insouciant about the medium-term picture, repeatedly failing in his budgets and his state-of-the-union speeches to offer any path to a sustainable deficit. Under heavy Republican pressure, he has been forced to rethink. . . .
The vast majority of Republicans, driven on by the wilder-eyed members of their party and the cacophony of conservative media, are clinging to the position that not a single cent of deficit reduction must come from a higher tax take. This is economically illiterate and disgracefully cynical.