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The headlines will blare today about the rough appropriation of an Australian soap opera that occurred in the White House last night, with Eric Cantor’s ego deeply bruised and glasses fogged, after the President reportedly said “I have reached the point where I say enough. Would Ronald Reagan be sitting here? I’ve reached my limit. This may bring my presidency down, but I will not yield on this… Eric, don’t call my bluff. I’m going to the American people with this,” and walked out of the room. Problem for Cantor is that the meeting was wrapping up anyway, and it wasn’t as angry and abrupt as he made it sound, others in the room allege.

But there were several actual pieces of progress toward an agreement.

• Depending on what accounts you believe, the White House and Republicans identified somewhere between $1.5-$1.7 trillion in spending reductions, mostly from the discretionary budget (with nothing from entitlements), that came out of the Biden talks. The Democrats want to supplement that with revenue increases to get to the $2 trillion benchmark that has for some reason been tied dollar-for-dollar to an increase in the debt limit to get through 2012. Republicans are adamantly opposed to those revenues. And that’s the impasse.

• Republicans also think the number from the Biden talks has downshifted to $1.5 trillion from $2 trillion. The Republican leadership, wary of the perception that they were rooked on the 2011 appropriations deal, thinks the White House is playing games with the numbers and clearly doesn’t trust them. Complicating this further is that neither side will put down their deal on paper, at least not yet.

• The decision on whether to persist with this impasse or abandon it and try to figure out some way to increase the debt limit has to come by Friday, according to the President.

• There are varying reports of stimulative measures being discussed as part of the final deal, basically extending the same two that expire at the end of the year – the payroll tax cut, and unemployment insurance. While you can argue that one or both are OK stimulus, as an extension of current law, they would add no stimulus on net.

• But all of this may be a moot point, because of what Paul Kane and Lori Montgomery note starting in paragraph 10 of their story.

Senior leaders in both parties, however, have begun to look outside the White House meetings for a solution, showing increasing interest in a Senate strategy that could use McConnell’s proposal to temporarily bypass House Republicans.

Senate Majority Leader Harry M. Reid (D-Nev.) is working with McConnell on this approach. Aides said the two are discussing a strategy that would pair McConnell’s debt-limit proposal with at least $1.5 trillion in spending cuts identified through bipartisan talks that Vice President Biden has led in recent weeks.

The deal also could create a committee of 12 lawmakers who would be assigned with identifying trillions of dollars in additional savings. The panel’s recommendations would be fast-tracked to votes in the House and the Senate and would not be subject to amendment, a process similar to the one Congress uses for closing military bases.

So instead of McConnell’s plan, which just increases the debt limit, Harry Reid is trying to add the Obama spending cuts to that plan, and a Catfood Commission II to deal with tax and/or entitlement reforms, with binding recommendations that get an up-or-down vote.

And why is this, when Republicans from John McCain to Tom frickin’ Coburn are on board with the McConnell plan as is, and the House is softening themselves, with Cantor (the New Leader) for the first time agreeing to take multiple votes?

Well, passage in the House isn’t a slam dunk, to be sure. And the McConnell plan would have difficulties in both chambers and in both parties, though that’s why they call it a last resort. But Obama reiterated that his “strong preference is not just to raise the debt ceiling but also to take significant steps to restrain borrowing.” As I’ve said repeatedly, by his own words, he wants to use this as a leverage point. The family of the hostage victim has become the hostage taker. So you have to believe that this Reid/McConnell deal, which mandates spending cuts even though the Republican leader in the Senate took them off the table, is being tailored to placate a Democratic President.

Still, I’m not sure that this gets done, either. The President’s entire contention with Cantor yesterday was that revenue must be included in the deal. Democrats in the House have said they won’t guarantee a single vote without revenues. That bargaining position has worked to put Republicans completely on their back feet. And with John Boehner estimating that at least 60 of his caucus won’t vote for any debt limit increase, House Democrats have plenty of leverage of their own.

So while Moody’s threatens a debt downgrade and futures on canned goods and ammunition skyrocket, it’s hard to argue with their analysis. The next 48 hours will be crucial as to whether we get a distasteful and harmful deal, or something that would at least avert catastrophe.