The Golden Report

12 DAYS UNTIL IOWA
19 DAYS UNTIL NEW HAMPSHIRE

BREAKING: A magnitude 5.9 earthquake has struck near Christchurch, New Zealand, the US Geological Survey reports

TOP STORY: A deal.

Late this afternoon, Speaker of the House John Boehner, looking weary and defeated after a week of intense negotiations, came to the microphones to announce that he had reached a deal with Senate Majority Leader Harry Reid to have the House pass the Senate bill extending the payroll tax cut for two months, adding a provision that seeks to accommodate the burden that some businesses may face from having to adjust their payroll filings as a result of the legislation.

He expected that the House and Senate would both act before Christmas- meaning tomorrow- to pass the bill by unanimous consent. That is, unless one member objects which, while entirely possible, is considered unlikely.

THE LATEST- from The Hill- “House Republican Leaders Cave- Agree To Pass Two-Month Bill”

“Speaker John Boehner (R-Ohio) announced the agreement with Senate Majority Leader Harry Reid (D-Nev.) Thursday evening after briefing rank-and-file House Republicans on a conference call. The House has agreed to pass a version of the Senate’s two-month payroll tax cut legislation, with a fix demanded by Republicans to make implementation easier.

According to a lawmaker who participated in the House GOP conference call, Boehner told the rank-and-file members that a deal was struck and the deed had been done. Unlike an extended phone call on Saturday, where members voiced extreme opposition to a Senate compromise, the Thursday conference call was one-way, and members were only allowed to listen in.

The agreement capped a disastrous week for Boehner, who was first forced into a fight with Senate Republicans by his own angry members and then was abandoned by senior Republicans, including Sen. John McCain (R-Ariz.), the 2008 presidential nominee, and Karl Rove, the chief strategist for the last Republican president.

“I don’t think this is any time for celebration,” Boehner said as he announced the agreement in the basement of a nearly empty Capitol.

Asked if he caved on the issue, the Speaker replied: “You know, sometimes it’s hard to do the right thing, and sometimes it’s politically difficult to do the right thing.”

STATEMENT FROM SPEAKER BOEHNER announcing the deal:

“Senator Reid and I have reached an agreement that will ensure taxes do not increase for working families on January 1 while ensuring that a complex new reporting burden is not unintentionally imposed on small business job creators.  Under the terms of our agreement, a new bill will be approved by the House that reflects the bipartisan agreement in the Senate along with new language that allows job creators to process and withhold payroll taxation under the same accounting structure that is currently in place.  The Senate will join the House in immediately appointing conferees, with instructions to reach agreement in the weeks ahead on a full-year payroll tax extension.  We will ask the House and Senate to approve this agreement by unanimous consent before Christmas.  I thank our Members – particularly those who have remained here in the Capitol with the holidays approaching – for their efforts to enact a full-year extension of the payroll tax cut for working families.”

STATEMENT FROM MAJORITY LEADER REID affirming the deal-

“I am grateful that the voices of reason have prevailed and Speaker Boehner has agreed to pass the Senate’s bipartisan compromise. Year-long extensions of the payroll tax cut, unemployment insurance and Medicare payments for physicians has always been our goal, and Democrats will not rest until we have passed them. But there remain important differences between the parties on how to implement these policies, and it is critical that we protect middle-class families from a tax increase while we work them out.

“I look forward to appointing members of my caucus to continue negotiations towards a year-long agreement. Two months is not a long time, and I expect the negotiators to work expeditiously to forge year-long extensions of these critical policies.”

STATEMENT FROM PRESIDENT OBAMA trumpeting what has been a very good week for his presidency-

“For the past several weeks, I’ve stated consistently that it was critical that Congress not go home without preventing a tax increase on 160 million working Americans. Today, I congratulate members of Congress for ending the partisan stalemate by reaching an agreement that meets that test.

Because of this agreement, every working American will keep his or her tax cut – about $1,000 for the average family. That’s about $40 in every paycheck. Vital unemployment insurance will continue for millions of Americans who are looking for work.  And when Congress returns, I urge them to keep working to reach an agreement that will extend this tax cut and unemployment insurance for all of 2012 without drama or delay.

This is good news, just in time for the holidays. This is the right thing to do to strengthen our families, grow our economy, and create new jobs.  This is real money that will make a real difference in people’s lives. And I want to thank every American who raised your voice to remind folks in this town what this debate was all about. It was about you. And today, your voices made all the difference.”

TONIGHT, THE PRESIDENT TWEETED FROM @WHITEHOUSE:

Thanks to all who shared #40dollars stories. Today’s victory is yours. Keep making your voices heard – it makes all the difference. –bo

PAYROLL TAKEAWAYS:

1/ This debate was a big deal. The question is how big a deal it remains weeks and months from now. Will it be seen as a defining moment in the relationship between President Obama and Congress, between Democrats and Republicans, between Republicans and the Tea Party- or will this debate, similar to the others we have seen this year over federal funding and the debt ceiling, be eclipsed by the next big battle?

2/ The White House found its voice. After a year of trying, and often coming up short, in its negotiations with Congress and after continued difficulty messaging and communicating with the public, the White House’s operation has seemingly come together over the last week. The #40Dollars campaign was really the first time the formal White House has successfully leveraged the social media tools they mastered in the 2008 election to help them win both a policy and a political debate, in a way that related to the average American.

3/ The Speaker is severely weakened. What we don’t know is if he is damaged beyond repair or, quite possibly and alternatively, if the Tea Party Republicans who forced a change in control in the House in 2010 have finally been shunned by enough of the traditional Republican establishment. Many believe that this group of freshman representatives revolted in the summer and prevented Speaker Boehner from agreeing to a grand bargain with President Obama. This time, the Speaker was at first ready to give in to their demands but then essentially said “not this time.”

WALL STREET- from CNBC-

“Stocks pushed into the close to finish around their highest levels for the second day in a row, as banks surged and Wall Street shrugged off fears of a global economic slowdown.

Financials, energy and technology — the market’s principal weak spot recently — led gainers, while commodities, particularly mining-related stocks, showed weakness. Consumer staples was the worst of the 10 Standard & Poor’s 500 sectors during a day in which the market traded in a tight range throughout the session.”

• DOW up 62
• NASDAQ up 21
• S&P 500 up 10

CAMPAIGN 2012:

Former President George H. W. Bush endorsed Gov. Mitt Romney today.

(Earlier this year, Romney was the only one of the current presidential candidates to attend a tribute event for Pres. Bush at the Kennedy Center in Washington organized by the Points of Light Institute. THE EVENING REPORT was there that night and met President Bush and Governor Romney)

RON PAUL is surging in Iowa, although his campaign is coming under new questions about documents that have surfaced (similar- maybe even identical- to ones that surfaced with allegations of racism in 2008). Yesterday, Paul even walked out of an interview with CNN’s Glorida Borger.

And as NBC’s Domenico Montanaro reports, there may be more skeletons in the closet set to come out in these final days before the Caucus:

• No federal regulations for car safety, medicines, even air traffic control
• Don’t regulate raw milk:
• Heroin, marijuana, cocaine, prostitution OK if states allow them
• - No air conditioning for troops (as a way to bring them home)
• Against the Americans with Disabilities Act
• No FEMA
• Believes Social Security, Medicare and Medicaid are unconstitutional

The question is how many of these past statements and positions, many which are quintessentially Ron Paul, will have staying power.

GINGRICH HAS A NEW NICKNAME FOR ROMNEY- via National Journal-

“When a Massachusetts moderate says I’m not conservative, it makes me want to laugh when he goes down that road,” Gingrich told radio host Tony Powers, responding to the former Bay State governor’s frequent charge. “When a Massachusetts moderate says Newt Gingrich is not conservative enough, other than break up laughing I don’t know what the correct response would be.”

Gingrich also criticized another rival, Rep. Ron Paul, R-Texas, who also has run ads critical of the former House speaker. “Paul’s case is different because he believes in legalizing drugs … thinks it’s OK for Iran to have a nuclear weapon and believes Americans are responsible for 9/11, which makes no sense.”

GALLUP TRACKING POLL: Gingrich 27, Romney 21, Paul 12, Perry 7, Bachmann 6, Santorum 4, Huntsman 1, Cain

GINGRICH averages a 3.8% lead in an average of national polls for the Republican nomination

RON PAUL leads an average of recent polls in IOWA, topping Romney by 3.5%

In NEW HAMPSHIRE, MITT ROMNEY has a 13 point average lead over Newt Gingrich

The near-reverse is the case in SOUTH CAROLINA, where GINGRICH has a 16 point lead over Romney

And in FLORIDA, the last of the early primary states (at the end of January), GINGRICH retains a 18 point lead over Mitt Romney.

FINALLY…Matt Damon still has some beef with President Obama. Actually, a lot of beef. And he told Elle Magazine that the President should think about leaving after one term. From the Huffington Post-

“I’ve talked to a lot of people who worked for Obama at the grassroots level. One of them said to me, ‘Never again. I will never be fooled again by a politician,’” Damon tells the magazine. “You know, a one-term president with some balls who actually got stuff done would have been, in the long run of the country, much better.”

Referring to the Occupy Wall Street movement, Damon continued: “If the Democrats think that they didn’t have a mandate — people are literally without any focus or leadership, just wandering out into the streets to yell right now because they are so pissed off … Imagine if they had a leader.”

The slam follows in the same vein as a number of other criticisms Damon has made of the President and the Democrats, including in March, when he criticized Obama’s education policy.

“I really think he misinterpreted his mandate. A friend of mine said to me the other day, I thought it was a great line, ‘I no longer hope for audacity,’” Damon told CNN host Piers Morgan. “He’s doubled down on a lot of things, going back to education… the idea that we’re testing kids and we’re tying teachers salaries to how kids are performing on tests, that kind of mechanized thinking has nothing to do with higher order. We’re training them, not teaching them.”

HAPPY HANUKKAH!

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JUST IN: Senate Majority Leader Harry Reid plans to bring a veterans tax break bill to the floor for a vote on or close to Veterans Day, the latest component of the President’s proposed American Jobs Act to be considered in a piece-meal approach. In doing so, Reid is all but daring Republicans to vote against a popular tax break on a symbolic holiday. Today, the Senate failed to reach 60 votes to cut off debate on a transportation and infrastructure bill, one day after President Obama went to Washington’s Key Bridge to urge its passage.

TOP STORY: Greek Prime Minister George Papandreou appeared to walk back today on his proposal earlier this week to put the EU-brokered financial rescue package for his country up for a vote by popular referendum. Tomorrow, Papandreou faces a vote of no confidence in the Greek Parliament and it is not clear if he and his ruling political party will survive the vote. This comes as leaders of the G-20 nations are meeting this week in Cannes, France to discuss the proposal and its effects, should it pass or fail.

TOMORROW MORNING: The Labor Department releases its monthly employment report which will show the jobs situation for the month of October. Bloomberg is predicting that 95,000 jobs were added last month and the unemployment rate is expected to be unchanged at 9.1%. The numbers are released at 8:30am EST.

WALL STREET:

• DOW up 208
• NASDAQ up 58
• S&P 500 up 23

STILL IN THE DARK: As of this hour, 318,212 customers in Connecticut remain without power after Saturday’s historic and unusual snow storm. Tonight, the Connecticut National Guard has been dispatched to some areas of the hard-hit Farmington Valley. Many school districts have been closed for the entire week. Connecticut Light & Power, the state’s primary utility company, predicts that all customers will have power restored by Sunday night.

TOP POLITICAL STORY: the developing scandal over allegations of sexual harassment by Republican frontrunner Herman Cain. The story has taken a number of new developments: with now three accusers coming forward, at least one asking permission from the National Restaurant Association to go public with her story and an accusation by the Cain campaign that a staffer with the Rick Perry campaign reportedly leaked this story to POLITICO. In an interview with CNN tonight, Perry strongly denied that, saying, “You know, I don’t know how to tell it any other way except we knew nothing about it.”

SO FAR, Cain is holding his own against a growing media firestorm. But as each day goes by, more and more details are coming out that, when compared against Cain’s prior statements, and the statements that he has made this week, don’t appear to add up. The biggest unknown right now is what kind of damage this story may have in the eyes of Cain’s supporters. However, his campaign reported this week that they have been raising on average of $1 million a day, a sign that Cain’s base of support may not be weakened- but rather emboldened- by this controversy. And with Rick Perry being drawn into the story, the Romney campaign is having a very good week. Although their candidate is not attracting any media attention, he also isn’t attracting any scrutiny while his chief obstacle (at the moment) for frontrunner status is fighting hard to get his campaign back on track.

THE NEXT DEBATE is Wednesday night in Rochester, Michigan. Its focus is slated to be jobs and the economy, although it is hard to see at this point how the Cain scandal could not be brought up.

RASMUSSEN POLL out today:

• Cain 26%
• Romney 23%
• Gingrich 14%
• Perry 8%
• Paul 7%
• Bachmann 2%
• Huntsman 2%
• Santorum 1%

QUINNIPIAC POLL out Wednesday:

• Cain 30%
• Romney 23%
• Gingrich 10%
• Perry 8%
• Paul 7%
• Bachmann 4%
• Huntsman 2%
• Santorum 1%

FINALLY..SERIOUSLY…”Siri” the voice activated network on Apple’s new iPhone 4S, encountered a major glitch today resulting in its first outage. According to TechCrunch, which is compiling some of the best tweets from users experiencing the problem, “When you try to use Siri on the iPhone 4S right now, the usually perky virtual assistant just responds: “Sorry, I am having trouble connecting to the network” and does nothing.”

DEVELOPING: A historical development this evening in Congressional procedure. Senate Majority Leader Harry Reid invoked what has been referred to previously as the “nuclear option” to challenge a ruling of the Senate president and break what effectively had become a second filibuster by Republicans following a successful motion to invoke cloture and cut off debate on a Chinese currency regulatory bill earlier today. Here’s how it went down, from The Hill:

Reid appealed a ruling from the chair that Senate Republican Leader Mitch McConnell (Ky.) does not need unanimous consent to force a vote on a motion to suspend the rules to consider amendments after cloture has already been approved.

 

The chair, which was occupied by Sen. Mark Begich (D-Alaska), ruled under the advice of the Senate parliamentarian that Republicans had the right to force a vote on a motion to suspend the rules and proceed to President Obama’s controversial jobs bill.

 

The vote was 51-48 to back Reid and overturn the Senate precedent.

 

The maneuver is arcane but momentous. If a simple majority of the Senate votes with Reid and strikes down the ruling, the chamber’s precedent will be changed through the unilateral action of one party.

The consequences of Reid’s actions are, at present, unclear, but they have the potential to dramatically- and permanently- increase the power of the Senate majority. They also may further increase- if that was even possible- the level of partisanship in the United States Senate and the level of vitriol between Democrats and Republicans. 

Practically, it could mean that Reid brings the American Jobs Act to a vote next week in the Senate without having to invoke cloture, and thus passes the bill without 60 votes [that, by any whip count today, he does not have and is not likely to get]. 

The move caught Republicans off guard and it is unclear what their response will be. Further, it is not yet clear tonight if Reid’s move was coordinated with the White House and national Democratic Party leaders. 

EARLIER TODAY President Obama held a news conference at 11am from The East Room. Remarkably, it was the first news conference the President has held in nearly two months [during the height of the debt ceiling debate in July, the President was taking questions from reporters almost once a day]. Here are the highlights, from The Washington Post:

“If Congress does something, then I can’t run against a do-nothing Congress,” Obama said in response to a question at a morning news conference. “If Congress does nothing, then it’s not a matter of me running against them. I think the American people will run them out of town, because they are frustrated, and they know we need to do something big and something bold.”

 

“It’s fair to say that I have gone out of my way in every instance — sometimes at my own political peril and to the frustration of Democrats — to work with Republicans to find common ground to move this country forward,” Obama said. “Each time, what we’ve seen is games-playing, a preference to try to score political points rather than actually get something done.”

There are least two storylines that the developments today in Washington demonstrate. Both will follow the national Democratic Party through the election thirteen months from now. 

1/ Democrats are redefining their definition of “rich.” Perhaps as the result of the economic recession, they are largely abadoning the position that “rich” begins at $250,000 annually and increasing the threshold for pursuing increases in taxes to $1 million. They believe that the easier-to-remember round number will resonate more with the American people, who (public opinion polls indicate) are largely on their side with increasing taxes on the wealthy in order to balance the deficit. 

2/ President Obama is following the reelection strategy of Harry Truman. His statement today about a do-nothing Congress was a warning- and essentially a dare- to Congressional Republicans. Do something, he said, or he would run against them. The White House clearly believes that this is a winning strategy as it gives the President the upper hand. If the Senate passes the Jobs Act, by any means possible, (as tonight’s developments indicate they are ready to do), and the House does not consider it at all, it plays into this evolving narrative even more. The American people are frustrated- and they are looking for someone to blame. The President is betting that if he can shift some of that blame to Congress- even more unpopular than he is- he can take the high road from now until next November. 

TWO THINGS TO WATCH TOMORROW:

1/At 8:30am, the Labor Department will release the monthly employment report for September. Watch to see any changes in the unemployment rate and the number of nonfarm payroll jobs added, or subtracted, last month. This number will drive the day- and expect to see President Obama comment at some point- especially if the numbers come in better than expected. 

2/ Tomorrow marks the 10th anniversary of Operation Enduring Freedom and the initiation of combat operations in Afghanistan. Here’s how Tom Brokaw reported it for NBC Nightly News that Saturday evening a decade ago, “America Strikes Back” 

WALL STREET:

• DOW up 183
• NASDAQ up 46
• S&P 500 up 21

FINALLY… Following last night’s news that Apple co-founder Steve Jobs had died, TIME Magazine showed how the print industry can still be nimble and relevant. In the course of three hours, the magazine stopped the presses on next week’s scheduled edition and replaced it with a Steve Jobs commemorative cover piece. It is the eighth TIME cover that Jobs has been a part of. Full photo gallery.

FRIDAY’S EARLY EDITION

TOP STORY: US-born suspected Al-Qaeda terrorist Anwar al-Awlaki was killed this morning in a US drone attack in Yemen. In April 2010, President Obama ordered the targeted killing of Al-Awlaki, the first time a US Citizen has been placed in that CIA designation, because he represented an imminent threat to the United States. An attack to take him out in May proved unsuccessful. Al-Awlaki is linked to nearly ever terrorism plot or attack in recent years, including:

• 2005 London Train Bombings
• 2006 Toronto Terrorism Plot
• 2007 Fort Dix, NJ military recruiting center plot
• 2009 Little Rock, AK military recruiting center shooting
• 2009 Fort Hood, TX shooting- where he is accused of a direct connection to shooter Nidal Hassan
• 2009 Detroit “Underwear Bomber” plot- accused of recruiting suspected terrorist Umar Farouk Abdulmutallab
• 2010 Times Square bombing plot- again, a direct connection to suspected terrorist Faisal Shahzad
• 2010 Cargo Plane Terrorism Plot

In remarks at the transition ceremony for the Joint Chiefs of Staff this morning, President Obama said of the killing, “The death of al-Awlaki marks another significant milestone in the broader effort to defeat al Qaeda and its affiliates. Furthermore, this success is a tribute to our intelligence community, and to the efforts of Yemen and its security forces, who have worked closely with the United States over the course of several years…Al Qaeda in the Arabian Peninsula remains a dangerous — though weakened — terrorist organization. And going forward, we will remain vigilant against any threats to the United States, or our allies and partners. But make no mistake: This is further proof that al Qaeda and its affiliates will find no safe haven anywhere in the world.”

POLITICAL BIG STORY: The Florida Republican Party officially announced this morning that they will hold their presidential preference primary on Tuesday January 31, 2012- 6 days before the Iowa Caucuses are currently scheduled. This will now set off a major shakeup of the primary season calendar, with South Carolina, Nevada, New Hampshire and Iowa (and potentially Missouri and Arizona) moving their primary dates forward- perhaps beginning as early as the first week of the new year. 

One possibility- as reported by ABC’s The Note:

Jan. 9 or 10 — Iowa
Jan. 17 — New Hampshire
Jan. 21 — Nevada
Jan. 28 — South Carolina
Jan. 31 — Florida
Feb. 7 — Missouri
Feb. 28 — Arizona, Michigan
Mar. 6 — Georgia, Ohio, Oklahoma, Tennessee, Texas, Vermont, Virginia, Idaho and Wyoming caucuses

WALL STREET: Austria became the latest state to approve a Eurozone bailout fund today. On this final day of the third quarter, the stock market took a steep dive, ending the day down over 10 percent and ending the quarter nearly ten percent lower. One of the big stories today was Eastman Kodak- amid rumors of the company’s imminent bankruptcy, the stock price was down over 60 percent today. 

• DOW down 240 to 10,913
• NASDAQ down 65 to 2,415
• S&P 500 down 29 to 1,131

HURRICANE OPHELIA today became the third major hurricane of the 2011 Atlantic Hurricane Season. The Category Three storm, with winds of 115mph, is located 535 miles south of Bermuda, where a tropical storm watch is currently in effect. Large swells are expected to begin affecting the island tomorrow, with tropical force winds possible by late Saturday afternoon.

LANDRA REID, the wife of Senate Majority Leader Harry Reid is undergoing treatment for Stage II breast cancer, Reid’s office announced in a statement today reported by POLITICO Sen. and Mrs. Reid appreciate the thoughts and concerns expressed during this time. They ask that they be afforded the respect and privacy that any family would want,” Reid’s office said in a statement.

FINALLY…HOW WE DID

In Sunday’s edition of THE EVENING REPORT, we previewed the three things to watch for in the week ahead. Here’s how we did:

1/ Government Shutdown. Congress did, in fact, avert a government shutdown- which would have begun at midnight tonight- with the passage of a temporary four-day continuing resolution through Tuesday, when the House will vote on a longer-term CR extending through the middle of November. But, as we detailed in Tuesday’s Report, there is a long road ahead for the budget and appropriations process, and there is no clear assurance a shutdown threat won’t be reproduced in about six weeks

2/ Wall Street. We indicated there might be some easing in global markets over the bailout situation in Europe and the debt crisis in Greece. Early-week gains were erased in a selloff today as the markets continue to be on edge and reacting to each and every overseas development. This will continue to be a top story to watch in the week ahead.

3/ Supreme Court. We hinted on Sunday night that this might be the week where the Obama Administration would make a decision on bringing a challenge to its health care reform law to the Supreme Court in its upcoming session. On Wednesday, the Justice Department did just that. The High Court, which convenes for its new term on Monday, has until the end of the year to decide whether it will hear this case, which challenges a ruling from the 11th Circuit Court of Appeals. If they do, a decision could come next May, directly in the midst of the 2012 election.

The House has just voted to defeat Sen. Reid’s debt ceiling increase- in a highly symbolic, politically charged move.

Earlier today, the Senate came into session. Debate is continuing on the Reid bill in that body ahead of a cloture vote expected at 1am. 43 Republican Senators signed a letter indicating their opposition to the Reid bill (4 Republican Senators did not sign it)- but that means there are not enough votes for passage.

Reid is holding a news conference now. Boehner & Cantor are holding a news conference shortly.

Reid & Pelosi are due to go to The White House for a meeting at 3:30. 

It’s Saturday morning. We are now three days until a potential default. And although undoubtedly (and hopefully) negotiations are going on behind the scenes to end this crisis and pass an increase in the debt ceiling before Tuesday- there are no signs of any progress or break towards a compromise today.

Here’s what we do know.

The House is in session at noon, beginning debate at 1pm and a vote before 3pm on the debt ceiling/deficit reduction plan introduced yesterday in the Senate by Harry Reid. This is a political show vote- to show that Democrats along can not pass the bill in the House (obviously). It’s an exercise in political theatre- there’s no way around that.

The Senate is in at 1pm to debate the cloture motion for the Reid bill. That will happen all day. We expect there to be some sort of updates from Congressional leaders at some point. At 1am, there is a vote scheduled for cloture in the Senate. If that vote still takes place, it would require 60 votes- and it is unclear and unlikely at this point that Reid has the 60 votes to stop a Republican filibuster. That vote may also be a show vote- a political vote to show Republicans as the party of obstructionism, holding up a vote just two days before default.

So after the political theatre- where is the actual resolution?  

The Senate has just voted to table the Boehner debt ceiling increase bill passed by the House about two hours ago. 

Immediately afterwards, Majority Leader Harry Reid introduced his own proposal and filed cloture on it.

An exchange occurred between Minority Leader Mitch McConnell and Reid. McConnell offered a vote tonight. Reid does not have 60 votes to defeat a Republican filibuster and pass the legislation. McConnell essentially called Reid’s bluff. 

Report: McConnell has said he will not negotiate with Harry Reid; only with President Obama. Which, if true, will make the interesting because the Speaker and the President are not talking. 

Next steps: No more roll call votes in the Senate tonight. House in at noon and will vote at 1pm to reject the Reid bill in a politically symbolic vote. 

This is a legislative stalemate and a Congressional standoff. 

New Development: The House will vote tomorrow, beginning at 1pm, on the Reid bill (as of yet un-introduced). It will be defeated. This is to show that the Reid bill can not by itself pass the House. (or, by the way, the Senate without some Republican votes). 

Shortly before 6:30pm, the House passed the revised Boehner debt ceiling increase bill on a party-line vote, with 20 Republicans voting against it. Tea party members were won over when the Speaker inserted a requirement that Congress pass a Constitutional Balanced Budget Amendment before the next increase the debt ceiling. That is a practical impossibility but it was just the amount of red meat to convince freshman members to go with the Speaker, and thereby save his speakership.

Now attention shifts to the Senate. In the next few hours, the body is expected to defeat the Boehner bill out right. We also expect Harry Reid to introduce and invoke cloture on his own bill- the contents of which we have not seen yet. That could set us up for a long weekend of procedural hurdles in the Senate, where tea party members will do everything they can to kill the bill. Eventually, it will have to go back to the House where the assumption is it can pass- but only with Democratic votes. 

The timeline is uncertain but it may stretch until Tuesday afternoon- the day the country begins default.

It’s save to say that where we are right now is not the favored scenario of any of the players- and reflects very badly on Washington and American politics in general.