Where things stand

About an hour ago, the New York Times raised a lot of eyebrows with an across-the-top, breaking-new headline that read, “Obama and Boehner Close to Major Budget Deal, Congressional Leaders Are Told.”

It was eventually accompanied by this story.

The Obama administration has informed Democratic Congressional leaders that President Obama and Speaker John A. Boehner were starting to close in on a major budget deal that would enact substantial spending cuts and seek future revenues through a tax overhaul, Congressional officials said Thursday.

With the government staring at a potential default in less than two weeks, the officials said the administration on Wednesday night notified top members of Congress that a bargain with Mr. Boehner could be imminent. The Congressional leaders, whose help Mr. Obama would need to bring a compromise forward, were told that the new revenue tied to the looming agreement to increase the debt limit by Aug. 2 would be produced in 2012 through a tax code rewrite that would lower individual and corporate rates, close loopholes, end tax breaks and make other adjustments to produce revenue gains.

Almost immediately, Boehner said the report is “false,” and added that the Senate should pass the radical “Cut, Cap, and Balance” nonsense that has no chance of becoming law. Minutes later, the White House’s Dan Pfeiffer also said the NYT piece is “wrong,” adding that President Obama is still pushing for a deal, but there’s “nothing new.”

It’s tempting to think these are pro-forma denials, and a major breakthrough may actually be close at hand. I’m afraid that’s probably wishful thinking — the safer bet is that the NYT piece is jumping the gun.

This not to say all is quiet on the Hill. On the contrary, Sam Stein reports this afternoon that the McConnell/Reid “Plan B” compromise, thought to be the only viable way out of this mess, “is close to being put on political life support.”

Sources on the Hill Thursday morning expressed a newfound — at times defeatist — sense of worry about the political prospects of the proposal, which would cut roughly $1.5 trillion over ten years while granting authority to the president to suggest (but not sign off on) future spending cuts as a condition of raising the debt ceiling now. House Republicans have told leadership that they are sour on the idea, with more than 90 members pledging to oppose it. Another factor contributing toward its demise, however, has been the Obama administration’s decision to continue to push for a bigger deficit-reduction package, which has led many lawmakers to consider the McConnell-Reid option both insufficient and potentially unnecessary.

This isn’t evidence of progress. On the contrary, I’d argue this paints an even more discouraging picture, since it leaves the resolution of a “Grand Bargain” as the surest way to avoid a disaster. That’s not good news at all, since (a) the “Grand Bargain” isn’t going to be a good bill; and (b) there’s still no reason to think Boehner can get it through the House.