Friday’s dismal jobs report has significantly altered the landscape of the debt limit negotiations. Now that President Obama has been forced to acknowledge that the economy is not as strong as he hoped, he is desperate to win a long-term deficit deal. He badly needs Republicans to co-own both the debt and the economy. Speaker John Boehner, R-Ohio, even seemed perilously close to signing onto a deal that would have both guaranteed massive tax hikes and left all three entitlement programs, Social Security, Medicare and Medicaid, fundamentally unreformed.

But for whatever reason, Boehner wisely pulled back. The U.S. economy and the Republican party dodged one bullet. But what about the next one? The federal government is rapidly running out of money and Treasury Secretary Tim Geithner is steadfastly refusing to prepare any contingency plans should August 2nd come without a deal. He refuses to sell U.S. assets that could provide enough cash to get through the next month, and he refuses to begin the necessary work for the Treasury Department to prioritize federal government obligations. The administration’s plan appears to be to let the deadline approach and hope a mini-market crash motivates Republicans to accept higher taxes.