Ambinder examines the short-term political implications:
In the past, Obama might have blamed Congress itself, lumping Republicans and Democrats together. Now, though, with an election less than a year away, the president feels freer to make the case that Republicans refused to consider raising revenues, insisting instead that the middle class bear the burden for deficit reduction. Democrats have always been afraid of making the case that tax increases are necessary, but the politics have changed; jobs and economic recovery are the top priority. Deficit reduction is seen as the primary means to that end (whether it is or isn’t is a separate question), and Americans prefer a mix of cuts and tax increases to achieve it.
More to the point, the default outcome of the next couple of years is already now set toward serious deficit-cutting. The sequestration and the sunsetting of the Bush tax cuts make a big difference in cutting debt in the short and long term. And so Obama will be able in the campaign to focus more on growth and jobs – backed by his clear declaration that he will veto any attempt to wriggle out of the sequestration as an insurance policy for his fiscal conservative cred.
So next year we may have a choice between deficit cutting that includes the wealthy and successful in the sacrifice, or deficit-cutting that exempts the wealthy and successful from any sacrifice, while piling the entire burden on the middle class. Whether or not Obama wins that argument (I'd say he wins it easily), Michael Scherer doesn't think next year's electoral outcomes will change the underlying deadlocked dynamics:
Whatever happens, the losing party is likely to retrench to the margins. This has been the pattern for the past decade. In American politics, each defeat is inevitably interpreted as a need to return to “core values” and to rebuild the party brand. That means that more intransigence, not less. And if a muddled 2012 result greets Americans on November 4, then power will remain shared, with both parties having veto power over the other. In other words, bipartisanship is the only route to a long-term deficit deal. Compromise is the only alternative.
Allahpundit is on the same page:
The silver lining here, supposedly, is that the GOP’s going to take back the Senate and the White House next year and then write its own deal on deficit reduction. In that case, explain to me how a Republican dream package gets past a Senate filibuster. We’ll pick up a few seats in November but we won’t have 60, and the remaining Democrats in the chamber will face enormous pressure from their base to block any form of tax reform that extends the Bush tax cuts for the rich. And they’ll have support for that too: In today’s new CNN poll, 67 percent said they wanted the Super Committee to increase taxes on businesses and higher-income Americans. A redder Congress means the GOP will have a stronger hand in negotiations, but there’s still going to be a showdown — and maybe gridlock — over taxes.
If Obama wins decisively, it seems to me that he will have a strong mandate for his version of debt-reduction. He'll still need some part of the GOP. His only hope is that, after a second defeat, they will be open to some sort of compromise on revenues. Oddly enough, I think they'd be more likely to compromise if a hardliner, like Gingrich, is the nominee, rather than Romney. They can always argue that Romney was the problem, not their ideological purism, at a moment of national crisis. But with Gingrich in the dust, they'd have more reason to move on.
The Dish 