Mitch McConnell’s surrender plan for the debt limit may not be popular among the conservative grassroots, but it found a willing endorser where it matters: on the opinion page of the media’s voice of corporate America. McConnell is reacting to his corporate base, which would simply not abide by default, with his plan to allow a debt limit increase in exchange for a fairly meaningless series of forced votes.

The reality is that Mr. Obama is trying to present Republicans with a Hobson’s choice: Either repudiate their campaign pledge by raising taxes, or take the blame for any economic turmoil and government shutdown as the U.S. nears a debt default. In the former case Mr. Obama takes the tax issue off the table and demoralizes the tea party for 2012, and in the latter he makes Republicans share the blame for 9.2% unemployment.

This is the political context in which to understand Mr. McConnell’s proposal yesterday to force Mr. Obama to take ownership of any debt-limit increase. If the President still insists on a tax increase, then Republicans will walk away from the talks [...]

The hotter precincts of the blogosphere were calling this a sellout yesterday, though they might want to think before they shout. The debt ceiling is going to be increased one way or another, and the only question has been what if anything Republicans could get in return. If Mr. Obama insists on a tax increase, and Republicans won’t vote for one, then what’s the alternative to Mr. McConnell’s maneuver?

You have to love the hauteur here. The debt ceiling is going to be increased one way or another. Don’t mess with the forces of nature, plebians. This was always true; it’s why we’ve been watching a game of kabuki theater for the past several months. It was going to be a matter of which side blinked first, and in this case, the Republicans actually blinked. The fact that John Boehner told Fox News that McConnell “has done good work” on the surrender plan should tell you that it will be engineered regardless of the howls from the conservative wing of the party. The WSJ op-ed writes, “As former Senator Phil Gramm once told us, never take a hostage you’re not prepared to shoot.” Republicans weren’t prepared to shoot it because Wall Street would have received the brunt of the blow.

One of the things McConnell was also concerned about, aside from the Big Money Boyz, was that OMB would write the legislation and make it look like Republicans got rooked:

Senate Republican sources said McConnell’s proposal was motivated by a skepticism that the GOP can get an acceptable deal from negotiations with the Obama White House. White House budget director Jack Lew’s admission to McConnell Monday that the deal produced by the Biden working group would cut only $2 billion in discretionary spending next year was a key figure in convincing Republicans that they were in the process of getting rolled.

The fear among Republicans is that just like the deal produced in April to avoid a government shut down, spending cuts that had been discussed were quickly being whittled down so much that they would face a full-scale revolt from the conservative grassroots if Republicans agreed to any such proposal.

The president holds a distinct advantage in a negotiations process in which changes to any deal under discussion happen quickly and the actual nuts and bolts of how a plan would work and how the numbers would be structured is calculated by the White House budget office. Members of Congress have an in-house number-crunching shop — The Congressional Budget Office — but the process works far more differently with CBO. It needs more time to process requests for scoring a bill, and can handle only a certain number of requests from lawmakers.

This does not mean that defeat won’t be snatched from the jaws of victory. White House Press Secretary Jay Carney said yesterday that the President remains committed to “seizing this unique opportunity to come to agreement on significant, balanced deficit reduction.” He still wants a big bipartisan deal. And he held talks at the White House yesterday, and will hold them again today, for this purpose. The talks yesterday were described as constructive, though I don’t think McConnell would go through the motions of building a safety valve without knowing that negotiations were a dead end. One charming moment form the talks came when John Boehner was asked if he had something to share with the class:

Cantor, who is advocating a smaller deal, at one point demanded that Obama offer the details of his vision for a “grand bargain.”

“Where’s your paper?” he asked angrily.

Obama snapped back: “Frankly, your speaker has it. Am I dealing with him, or am I dealing with you?”

Given the internecine House Republican power plays and their total aversion to any tax increase, I don’t think there’s any chance of a deal. Which leaves us with the McConnell surrender plan.

You can easily argue that this was played shrewdly by the White House. But you would be ignoring the fact that they really want a bipartisan deal and have wanted one since entering office. The elements of the deal that Obama put on the table – chained CPI, raising the Medicare eligibility age, the blended rate for Medicaid – will stay there for many, many years, often with lines like “Even Barack Obama supported…” attached to them. I would say chances are good that the 2012 budget, a much more natural place to have this fight, could lead to the enactment of at least one of these policies.

But there’s no doubt that Republicans will be in disarray if they come up with only a few resolutions of disapproval for their leverage on the debt limit. The screams from the Rush Limbaughs of the world will be piercing. The word “betrayal” will be heard throughout the land. The party will have a very hard time regrouping.