"I Will Not Yield"

"This may bring my Presidency down. But I will not yield on this." President Obama, speaking (mostly) to Eric Cantor, late Wednesday afternoon, as the budget negotiations (literally) broke up. "Don't call my bluff, Eric," he had said earlier.

Astonishing words from the President. Words I did not think I would ever hear. By nature, he is not angry; he works very hard at not drawing lines in the sand. And here is anger. And there is a clear line in the sand.

I think Republicans are in trouble. They did not know or respect their adversary. They assumed political calculation, endless maneuvering, and then a cave-in. Wrong. They have lost their internal unity. They have lost the media. They are losing or have lost the people. Talking to Laura Ingraham this morning, McConnell said a default will be blamed on Republicans, and like 1995, they will then assume co-ownership of the tough economy.

So what will they do? The President charged both sides to put their best offer forward by Friday. My guess is Republicans will put a $2.0-$2.5 all spending cut program forward. Democrats will put a similar size plan forward, but including new revenues. No agreement will be reached.

Next week Republicans in the House will try to put the unagreed to deal to a vote, and it will be defeated, with a lot of Tea Party Republicans voting no. Dems in the House probably will not get a chance to vote on their version, but if it is put to a vote, it might pass. I think enough Republicans might break with leadership and support new revenues. But a betting man would say there is a real chance we will get to next Friday with no legislation.

Then what? Possibly McConnell's deal, which might pass. If not, a clean debt service increase, which might fail once, even twice, but then, at the last minute, it will pass.

If Republicans fail to get ennabling legislation through by August 2, Obama will simply exercise the 14th Amendment option, or, as discussed earlier, ask the Fed to give Treasury money to keep paying the bills.

We will not default.

And how dangerous Republicans are will be clear to many, if not to all.