Debt Ceiling - Both Parties Losing In Debt Standoff - Npr

Enlarge Charles Dharapak/AP

House Republicans leave the White House Wednesday after meeting with President Obama about the debt ceiling .

Charles Dharapak/AP

House Republicans leave the White House Wednesday after meeting with President Obama about the debt ceiling .

The debt ceiling show vote in the House is now in the rearview mirror, Wall Street having been fully briefed that the GOP-orchestrated rejection of a national borrowing limit increase would signify absolutely nothing.

The House Republicans-visit-the-White House-for-debt-ceiling-talks charade has also wrapped up, but not before a bout of chest-puffing and sputtering over who's demagoguing whom.

"Demagoguing" having emerged as the Beltway's new favorite buzzword. Because it's something so very unusual.

And party leaders remained publicly intransigent Wednesday over political compromises necessary to forge an agreement that would raise the debt ceiling before the nation hits its $14.3 trillion borrowing capacity by Aug. 2.

Treasury Department officials have warned that failure to raise the nation's ability to borrow by about $2 trillion could lead to a catastrophic "default crisis." Merely scare tactics, charge some House conservatives.

And voters watching at home? It's a fair bet that Congress's current disapproval rating, which has been hovering north of 70 percent, won't be improving anytime soon.

"Right now, both parties are in a place that is potentially hazardous," says Jennifer Duffy, senior editor for the Cook Political Report, which analyzes political races.

The U.S. Public Debt Quadruples.

In trillions

Source: White House Office of Management and Budget

.As Annual Budget Deficits Grow

In trillions

Source: White House Office of Management and Budget

Debt As A Percentage Of GDP

For selected countries

Source: CIA World Factbook

Credit: Stephanie d'Otreppe / NPR

Promises Made, Kept?

Republicans, especially Tea Party-fueled House freshmen, ran on a promise not to raise the debt limit and are also adamant that taxes not be increased.

Democrats are equally determined to block GOP efforts to link cuts to entitlement programs like Medicare with any agreement to raise the debt limit.

They are also pushing for "revenue enhancements" as part of the debt ceiling/debt-reduction calculation.

The White House has repeatedly warned that it believes if drastic cuts to domestic spending are linked to raising the debt ceiling, the nation's still-fragile economic recovery could stall.

So how do they reach common ground and avoid potential economic damage from a failure to address the debt limit?

"If I had the answer to this, I would probably be very wealthy," Duffy says. "But I don't think anyone's kidding themselves about what this means." Both in terms of market uncertainty and political repercussions.

- Nathan Gonzales, political editor, The Rothenberg Political Report