As expected, Majority Leader Harry Reid failed to keep his debt-ceiling bill alive in the Senate earlier today, but now the Times reports that Reid has approved an agreement signaled earlier today by Minority Leader Mitch McConnell that would cut the deficit by more than $2.5 trillion and raise the debt-ceiling limit through 2013, a provision that prevents this entire battle from being re-fought during the election season. If the Democrats approve, we should see a vote scheduled for the Senate this evening.

New York Senator Chuck Schumer said he felt "relief" knowing that the U.S. wouldn't default. Earlier today, the governments of Britain and Japan signaled that "disastrous consequences" for the global economy would follow default. The Secretary of the British Treasury told Reuters, "If they get this one wrong and there's a default—we don't expect that, we think that they will sort this out— but if that were to happen, it has consequences for every family and every business in this country and all across the world."

A Japanese source noted, "Nobody thought Washington would let Lehman collapse. But look what happened," and another source "in the euro zone" was angered that Congress was "playing chicken" with such a grave issue with massive ramifications.

Glenn Greenwald over at Salon believes that a "completely one-sided" deal, which is laden with cuts to Social Security and other entitlement programs that are already underfunded, combined with zero tax increases and loophole closures for the rich, is a win for the Republicans, but doesn't concern the President all that much. He points to a piece in today's Times detailing how Obama "adopted the Republicans' language and in some cases their policies," to angle for independent voters at the expense of his base. One Democratic strategist is quoted as saying that Democratic voters are "going to hate these Republican candidates…So I'm not honestly all that worried about a solid or enthusiastic base."

Greenwald writes (italics his):

In other words: it makes no difference to us how much we stomp on liberals' beliefs or how much they squawk, because we'll just wave around enough pictures of Michele Bachmann and scare them into unconditional submission. That's the Democratic Party's core calculation: from "hope" in 2008 to a rank fear-mongering campaign in 2012. Will it work? The ones who will determine if it will are the intended victims of that tactic: angry, impotent liberals whom the White House expects will snap dutifully into line no matter what else happens (even, as seems likely, massive Social Security and Medicare cuts) between now and next November.

Who's up for a U.S.A. chant?