Is a Grand Bargain still possible?

If you remember during the debt ceiling negotiations last summer, President Obama was pushing for a "Grand Bargain" on our federal deficit that would include Republican demands to cut spending and Democratic demands to increase taxes on the wealthy. When negotiations on that failed, the deal struck included a Super Committee in Congress to give in another try - which also failed.  The fallback from the original deal means that as of January 1, 2013, spending cuts kick in (with HUGE reductions in military spending) and the Bush tax cuts expire.

So is a Grand Bargain still possible? John Harwood thinks so.

...beneath the campaign noise, some elected officials and policy experts see improving odds for 2012 to end up yielding much more, including progress toward a deal on tax and budget issues that have confounded Washington’s divided government. Some say the campaign dialogue could even bring a deal closer.

The optimists include leading stakeholders in Washington’s oft-spurned centrist boutique, which may be especially vulnerable to wishful analysis. But two looming events — an automatic $1.2 trillion budget “sequester” hitting defense and domestic spending, and the expiration of all of President George W. Bush’s tax cuts — will create pressure for the two parties to strike a compromise.

“The probability of a deal strikes me as pretty high, since no agreement would be such a disaster,” said Peter R. Orszag.

Steve Bell, a longtime Senate Republican budget aide now at the said the White House and Congress “will not allow the sequester to occur and all theBush tax cuts to expire. They’re going to be looking at each other on Nov. 20 and saying, ‘Well, what do you want to do?

Harwood seems to be suggesting that this won't come up until a lame duck session after the election.  But as we've already seen, the Republicans are going to have to decide whether to force the discussion now (Boehner and House Republicans) - risking a government shutdown over this year's budget - or put it off until later (McConnell and Senate Republicans). Either way, it was the superior negotiations by Democrats and President Obama over the debt ceiling deal that continues to force their hand.

That's how you play the long game.