Few people actually want to see a debt default. Republicans, generally having more balls than Democrats, thought they could bully Dems into accepting huge cuts without giving anything on tax hikes.
It now appears that Obama is finally taking a stand, and will not simply cut cut cut without raising any taxes. Republicans have a bit of a disjointed voice on this, but with Moodys talking about downgrading US debt, it seems they finally are getting nervous. Their backers in big business and the financial sector certainly do not want this added headache to satisfy some weirdo tea partiers.
``Earlier this year House Republicans produced a report noting that an 85%-15% split between spending cuts and tax rises was the average for successful fiscal consolidations, according to historical evidence.``
Could we see something like that? Out of $4 trillion, that would be $3.4 trillion in spending cuts and $600 billion in tax increases. Seems like that would still be a huge victory for Reps. Will they take it?
http://www.economist.com/node/18928600?story_id=18928600
