The lead article in today’s New York Times, “Debt Bill Signed, Ending Crisis and Fractious Battle,” is somewhat of an anticlimax given the titanic struggles that preceded it. As expected, the Senate passed the debt bill by a substantial margin, 74-26, and the President signed it, raising the debt ceiling a mere 12 hours before it was set to expire.

The new super-commission established by the legislation is commanded to find more than $1 trillion in additional cuts; otherwise, an automatic across-the-board spending cut will take place affecting legislative priorities important for each party: Medicare for the Democrats and Defense for the Republicans. And more vitriolic debate has already broken out about the commission. Republicans say it is not empowered to consider any tax revenue while Senate Leader Harry Reid vociferously contradicted that stand.

And amidst all this debate about the debt, the real concern of the American people, the issue that the Republicans ran on in 2010, is jobs. There are several steps the Congress can take to improve the job situation — if they hadn’t broken for summer recess until September 7th. These include trade pacts, an extension of the payroll tax reduction and improvement in the patent process to encourage entrepreneurs.

So when Congress gets back, enough about debt. Let’s finally move on to jobs.

The lead article in today’s New York Times, “House Passes Deal to Raise Debt Cap and Defuse Crisis,” describes the new debt deal compromise and its passage in the House of Representatives by a 269-to-161 vote. Democrats delayed voting, and the bill seemed stuck at 20 votes short with two minutes to go when Representative Gabrielle Giffords, recovered from an assassination attempt, appeared on the floor to vote for it. To thunderous applause, she seemed to “melt away” the rancor of the past weeks and give a renewed sense of hope.

Somehow, some way, our nation has pulled through once again. The institutions founded so many years ago, derided as dysfunctional over the past few weeks, nevertheless delivered. The deal provides for $2.1 trillion in spending cuts, a raise of the debt ceiling through the next election, and the creation of a joint select committee of 12 bipartisan members of the House and Senate, evenly split, to determine further deficit reductions. If the select committee is unable to agree, automatic triggers will cause painful cuts for both parties, to Medicare for the Democrats, and to the security budget for Republicans.

As the saying goes, democracy is the worst form of government, except for every other one. While the public initially might deride the “sausage making,” in the end, the sausage was completed.

The lead article in today’s New York Times, “Leaders Agree on Outlines of Deal to End Debt Crisis,” describes the results of nail-biting negotiations that extended right up until the possible moment of default for our country.

The pact raises the debt ceiling by $900 billion in a first stage and $1.2 to $1.5 trillion in a second stage even though Congress could express pro forma disapproval that could be vetoed by the President. The formula protects the President from a second debt ceiling debate desired by many Republicans.

Meanwhile, a total of $2.4 trillion in cuts were agreed upon, also in a two-stage system with the second part dependent upon a commission evenly divided between Republicans and Democrats.

If the commission fails to provide a proposal, an automatic “trigger” would institute across-the-board cuts to the Pentagon and Medicare. These two programs, favored respectively by Republicans and Democrats, were chosen to provide incentives for an agreement.

Conservative Republicans, especially in the House, and Nancy Pelosi, on behalf of Democrats, were unenthusiastic about the agreement. If saner heads prevail, however, it should be able to be passed prior to the default deadline of August 2nd.

The Asian markets, who have already begun trading, reacted favorably to the development, and one hopes that Wall Street will do the same.

The lead article in today’s New York Times, “New Data Shows Sharp Slowdown in Growth Rate,” provides an extra dollop of bad news about the economy. The most widely accepted measurement of the economy’s growth, gross domestic product (GDP), increased less than one percent for the first half of 2011 according to the Commerce Department. This was a much weaker statistic than most economists expected, and it also came with revisions extending all the way back to 2003, showing that the recession was deeper than realized and the recovery weaker.

According to the article, a sharp economic downturn is often followed by a sharp recovery, but in the present case, this did not hold true. In addition, all the turmoil over the debt ceiling is just making matters worse. If the U.S. should default on its debt, especially in light of these new statistics, a new recession may be inevitable.

Thanks to the uncertainty, frankly caused by intransigeance among Tea Party members in the House, businesses are sitting on their profits instead of hiring new workers. And this, in turn, results in the stubborn unemployment rate and a reduction in overall consumer spending. And consumer spending is the engine that drives the economy.

One hopes these new statistics will make Washington come to its senses.

The lead article in today’s New York Times, “Obama Closes in on Deal for Cuts in Boehner Talks,” raises the intriguing possibility that the President and Speaker of the House may be near an agreement that would allow the debt ceiling to be raised. The outlines are well known, about $3 trillion in cuts, revenues from reform of the tax code and some restructuring of Social Security and Medicare to make the programs more solvent.

The talks are being kept tightly secret to avoid a replay of the previous negotiations when leaks led hard-liners in both Parties to torpedo them. If an agreement is reached, however, there will be strong pressure to accept it from the financial community who definitely do not want to see the U.S. default.

One other seeming difference this time: the President and Speaker seem to also be agreeing to a trigger if tax reform does not pass. This would be extremely punitive for both sides: for the Republicans it would be raising taxes on the wealthy, and for the Democrats it would be repeal of the individual mandate in President Obama’s healthcare plan.

At this point, only time will tell if the President and Speaker will be able to agree. Unfortunately, time is a precious commodity at this point in the negotiations.

The lead article in today’s New York Times, “Push Intensifies for Larger Deal on Debt Impasse,” describes a scene of chaos on Capitol Hill and the White House. As the deadline to raise the debt ceiling draws inexorably closer, there are plans all over the place to resolve the situation. There are secret deliberations between the President and the Speaker of the House, John Boehner. There is the plan from the bi-partisan Gang of Six combined some revenues and a lot of spending cuts. There is the ingenious scheme by Mitch McConnell to allow Republicans to increase the debt ceiling without actually voting for it. And there are the die-hard protests of 60 Tea Party Republicans in the House who are refusing to vote for any increase in the debt ceiling, period.

Meanwhile, the market volatility continues, and noone knows what might push investors over the edge. If not an actual downgrade of the nation’s credit rating, maybe it will be August 2nd or 3rd when the market crashes, and then, just like the last time, in 2008 with TARP, the Republicans will release the folly of their ways and fall back into line with their leadership.

Or everything might just collapse like a stack of cards.

The lead article in today’s New York Times, “Bipartisan Plan for Budget Deal Buoys President,” gives hope to both Democrats and Republicans alike who are serious about addressing the debt, more serious than maintaining ideological purity or becoming President.

The group of three Democrats and three Republicans was energized when Republican Conservative Tom Coburn joined their ranks, and they came up with a $4 trillion plan that was almost immediately embraced by President Obama as a good working start.

The agreement, however, is just a four-page outline now and cannot be finalized before the August 2nd deadline to raise the debt ceiling. I expect there will be some kind of temporary raise while the outline is turned into legislation.

Even Eric Cantor, the most fervent Tea Party leader in the House, admitted that there were some positive elements to the plan, though he sounded very cautious about it. And the leaders of the Senate, Harry Reid and Mitch McConnell, had been working on their own plan and were not very pleased by the timing.

Still, it does show that Democrats and Republicans are capable of working together, even if it takes a potential apocalypse to make them do so. Let’s see what happens from here on out.

The lead article in today’s New York Times, “Behind Battle Over Debt, a War Over Government,” provides a succinct analysis of the real difference between Democrats and Republicans, the one behind the current negotiations, that makes an agreement nearly impossible.

Unlike previous Republican parties, committed primariliy to deficit reduction, this group of representatives is more committed to smaller government, enabled by lower taxes. In other words, the primary role of lower taxes is not fiscal prudence, but the desire to “starve the beast,” to force the elimination of government programs. Thus the negotiations with Democrats are about more than numbers, where President Obama has actually proposed higher deficit reduction than Republicans, compared to the actual philosophy of the role of government.

If this is the case, what hope is there for ever achieving agreement? The numbers can be split, but ideological differences can not. While some saner heads, such as Senators McConnell and McCain, as well as Representative John Boehner, remember the government shutdown of 1995 and its effect on their electoral chances, the “young Turks” do not. And their main goal seems to be ideological purity not the fate of the country.

If that analysis is true, they face a rude come-uppance. When the stock market goes into free fall, when key checks are not paid — never mind Social Security — their phones will light up like Christmas trees, and they will come face to face with reality. It’s unfortunate that it may have to come to that day, and I’m still praying that it won’t.

The lead article in today’s New York Times, “Debt Talk Mired, Leader for GOP Proposes Option,” shows the continued intransigeance of the Republican Party, despite the effort by a Senate Leader to break the logjam. The leader, Senator McConnell, proposed empowering the President to lift the debt ceiling on his own, thus freeing the Congress from any responsibility for it. On the other hand, that path also means defeat for Republicans proposing deep spending cuts as the price for a debit ceiling elevation.

Yet despite all the Republican huffing and puffing about the need to decrease the debt, they have utterly failed to rise to the occasion when the President proposed to double the amount of cuts, from $2 trillion to $4 trillion, if the wealthy are required to pay their fair share. One wonders why they are resisting so vigorously. It’s almost as if this tenet of their Party platform was more important than all the others combined, so much so that’s it’s blinding them to everything they could achieve with just a modicum of common sense.

Do they want to provoke an unprecedented financial crisis? To stop checks for Social Security, veterans benefits and the disabled? To let the United States default for the first time in its history?
This is sheer insanity for people who are supposed to care about America. If they let this happen, it will be a long time before the American people forget and give them a chance to govern again.

The lead article in today’s New York Times, “Obama and GOP Remain at Odds on Deficit Deal,” describes a deadlock that at once seems resolvable and impossible. Both Democrats and Republicans seem to have drawn lines in the sand that are at once ideological and mutually exclusive.

The outlines of a deal seem obvious — the Democrats will allow modifications to programs such as Social Security and Medicare that do not directly affect payments to beneficiaries while the Republicans will allow the tax cuts to the wealthiest Americans expire. Alternatively, the Republicans could defend these tax cuts as a face-saving measure and just close loopholes for the oil companies, owners of corporate jets and hedge fund managers.

Yet the Republicans are, somewhat stubbornly, refusing to provide similar face-saving measures for Democrats. They refuse to address any tax provisions whatsoever. Meanwhile, Democrats, especially in the House, having been burned by Republicans in so many negotiations in the past, will refuse to support cuts in popular programs, especially Medicare where they hold a strong political argument against Paul Ryan’s draconian reform, without anything in return. And because so many Republican Tea Party members will vote against any increase to the debt ceiling, John Boehner needs some Democratic support to pass any new legislation.

What will happen? Mitch McConnell claims he has a secret formulation to solve the impasse. Stay tuned.