There have been no formal talks between the President and Congressional leaders for the last three days about raising the nation’s debt limit (though there has been “activity and progress” according to OMB Director Jack Lew), but the endgame is nonetheless coming into focus.

On a conference call, Chuck Schumer urged House Speaker John Boehner to renounce the threat to allow a default of the United States’ financial obligations by blocking an increase in the debt ceiling. This threat, even if it’s contrasted with an implicit guarantee to raise the debt limit eventually, could be enough to send the nation’s financial markets into a tailspin.

As we get more clarity on the menu of options in the upcoming budget debate, we’re seeing a narrowing of differences between the two parties. The Republicans may not want to admit it, but they’ve given up on changing the structure of Medicare. You can be sure of this by looking at the proposal of the Republican Study Committee, the far-right rump in the House (and it’s much more than a rump, including 3/4 of the entire House GOP caucus), which created a list of demands for increasing the debt limit. Even THEIR plan doesn’t mess with Medicare.

If Cantor thinks that Democrats and their allies will suddenly forgive and forget about Republicans and their vote to, yes, end Medicare, he’d better not watch TV in October 2012.

Today the Congress returned to session for a month in which the Treasury Department is expected to reach the debt limit. They may be able to take extraordinary measures to keep under the limit for a while, but it’s likely that under normal conditions, the limit will be reached this month. Joe Biden will open a discussion between the parties on how to get a vote passed to increase the limit this week.

The endgame of the deficit fight is going to be so brutal and so predictable I can barely bring myself to watch it. Republicans will say “we won’t raise the debt limit” even though they’ve privately assured Wall Street and the President they will. Democrats will say “this is irresponsible” even though they’ll attach something just as irresponsible to what ultimately passes. And the compromise reform will end up as something the White House wanted anyway.

What we know is this is all nonsense. Republicans promised an increase in the debt limit in a meeting with the President. Everything else makes for a nice play, but like in ancient Greece, all the spectators know how it will end.

There’s not much of a coherent program here. And the representatives in Congress don’t have a handle on it either. That’s why it’s plausible, as Stan Collender says, that the debt limit will fail before being enacted. In this sense you could see something like what happened on TARP. It failed first, and the market tanked, and then everyone got spooked and passed the bill on the second chance.

If you want to know about the impact of spending caps, just travel to Colorado.

Atrios is right: the idea that someone can be “serious” about the deficit while wanting to extend historically low tax rates is ridiculous. But that’s only true if you think yesterday’s Bowles-Simpson recommendations for deficit reduction had anything to do with deficit reduction. Clearly they don’t.