Take away taxes and live to fight again

“It does not matter if John Boehner is a reasonable man. The White House likes John Boehner. They feel -- or at least felt -- he's someone they can do business with. But they're learning that they're not actually doing business with Boehner. They're doing business with the Republican Party. And Boehner isn't the Republican Party. In fact, of the four major figures in the GOP leadership -- Mitch McConnell, Eric Cantor, and Jon Kyl -- Boehner is perhaps least representative of the modern Republican Party. The main reason people thought we might have a deal last week was because Boehner said he wanted one. The deal's collapse is, first and foremost, a reminder that what Boehner wants really doesn't matter.

For Republicans, this isn't about deficits. It's about spending and taxes. If this were really about deficits, a win-win would be possible. Easy, even. Republicans want spending cuts, and those cut the deficit. Democrats want revenues, and those cut the deficit. See where I'm going with this? But where Democrats really are arguing over deficits -- note their willingness to give more in spending cuts if Republicans will give more in revenues -- Republicans want less deficit reduction because it'll mean Democrats have less leverage with which to demand tax increases.

For a deal to be possible, something will need to change. We've reached an equilibrium where Republicans can't accept any revenues and Democrats can't accept a deal without any revenues. And I use the word "revenues" advisedly. There was a brief, shining moment when it seemed the deal would be changes to the tax code that did raise revenues but didn't increase rates and so Republicans wouldn't count as tax increases. But Cantor and others have made clear that they will oppose any net increase in revenues. So there's no deal until something breaks the equilibrium. Right now, the most likely candidates, in order, are public fury arising out of a government shutdown or a market panic arising out of near-default.”