It took more than two weeks, but House Republicans finally settled on a strategy for solving the debt limit crisis Friday, and by Sunday the Democrats had signaled they were ready to accede to the new Republican demands.

Ever since President Obama signed the American Taxpayer Relief Act on January 2, 2013, preserving Bush-era tax rates for all but the highest earners, Republicans had been divided over what they should demand from Obama and Senate Democrats in exchange for a vote to raise the debt limit. Speaker John Boehner, R-Ohio, had said that he preferred to see another deal that included a dollar in spending cuts over the next ten years in exchange for every dollar in debt limit hike now. But many Republicans thought that strategy was unworkable, especially considering that the $1.2 trillion in cuts from the last debt limit hike still had not gone into effect yet.

Instead, House Majority Leader Eric Cantor announced a new strategy last Friday that more of the Republican caucus can get behind. House Republicans will pass a three month debt limit hike this week, but they will attach wording that will cut off congressional pay if Senate Democrats don’t pass a budget by May 19th. Democrats have not passed a budget since Obamacare became law.

Before House Republicans made their debt-limit-hike-for-budget demand, Senate Democrats had been signaling they had no interest in making their vulnerable red-state members take tough budget votes. When asked if she planned to pass a budget this year, incoming Senate Budget Committee chairman Patty Murray, D-Wash., said, “I have no idea.”

Now that Republicans are demanding a budget in exchange for a debt limit hike, Senate Democrats are singing a different tune. “We’re going to do a budget this year, and it’s going to have revenues in it,” Sen. Chuck Schumer, D-N.Y., told David Gregory on Meet the Press yesterday.

That is a pretty bold statement. We’ll see if the six Democrats up for reelection in states Romney won in 2012 are as eager as Schumer is to vote for tax hikes heading into 2014.

From The Washington Examiner
Examiner Editorial: Bloomberg’s right on NYC school bus strike
Tim Carney: Beneficiaries of Obama’s policies bankroll inauguration
Phil Klein: Budget reform and the debt limit
Mark Tapscott: America needs more dogs in politics, especially Labs

In Other News
The New York Times, Obama Sworn In for 2nd Term, This Time Quietly: With only his family beside him, Barack Hussein Obama was sworn into office for a second term on Sunday in advance of Monday’s public pomp, facing a bitterly divided government at home and persistent threats abroad that inhibit his effort to redefine America’s use of power.
The Washington Post, Al-Qaeda branch’s image soars after hostage drama in Algeria: A week of violence in Algeria and Mali has transformed al-Qaeda’s North Africa branch into a cause celebre for militant Islamists around the globe, boosting recruitment and fundraising for the jihadists and spurring fears of further terrorist attacks in the region and beyond.
The Wall Street Journal, Records Show Fed Wavering in 2007: Federal Reserve officials in 2007 appeared to underestimate the sickly condition of U.S. financial markets before shifting to a state of growing alarm, according to 1,566 pages of newly released transcripts from the central bank’s meetings that year.

Righty Playbook
RAND on what gun control can actually accomplish (not much).
George Will on the spending time bomb in Obamacare.
Rep. Tom Cotton, R-Ark., on Hagel’s Historical Delusions

Lefty Playbook
Nate Cohn says pro-gun control Democrats can win in red states.
James Downie says Republicans have not surrendered until they agree to higher taxes.
Paul Krugman on Obama’s Big Deal.