Sept. 23 (Bloomberg) — Senator Jeff Flake of Arizona likes President Barack Obama, voted to give him the authority to strike Syria, supported the comprehensive immigration legislation favored by the White House, and works comfortably with members of the opposing party.

The six-term House Republican, who is now serving his first term in the Senate, also is a rock-ribbed conservative, especially on economic and fiscal issues. He has been a darling of the Club for Growth; before going to Congress, he ran the Goldwater Institute in his home state.

As a conservative who mixes conviction and civility, he is a member of a vanishing breed. He is an antidote to the Tea Party-driven congressional Republicans who are threatening to shut down the government or risk a U.S. default by refusing to increase the debt ceiling — and don’t withhold their venom toward Obama. (Michigan representative Kerry Bentivolio, for example, delights his constituents with his relish for a presidential impeachment. His animosity runs so deep that he said he “couldn’t stand” to be in the same room with Obama.)

On most social questions, Flake is squarely on the right. He opposes abortion rights, and, unlike Arizona’s senior senator, John McCain, he refused to break with orthodoxy and support a mild background check for gun buyers. He is a Mormon — a graduate of Brigham Young University and a former missionary in Africa — and opposes same-sex marriage. But he isn’t a demagogue; in the House, he voted to repeal the military’s “don’t ask, don’t tell” restriction and to allow gays to serve openly in the armed forces.

‘Better Atmosphere’

Even though he has been attacked from the political right for defying the majority in his party with his Syria and immigration votes, he has no regrets.

“Syria was more about the presidency than the president,” he said in an interview last week outside the Senate chamber. “You’ve got to look beyond the immediate. America benefits from having a strong commander in chief.”

He was a member of the bipartisan Senate Gang of Eight, which crafted a comprehensive immigration-reform measure this year. Six years ago, he backed another effort to change immigration policies. “There’s a much better atmosphere today on immigration than there was in 2007,” he said.

As a U.S. representative, Flake’s successful libertarian-minded campaign to ban earmarks — the small spending projects that members were long allowed to direct to their districts — so annoyed party leaders that he was denied a seat on the House Appropriations Committee.

Flake acknowledged that ending earmarks also took away a tool lawmakers used to forge compromises though political horse-trading. Nonetheless, he insists that the practice perpetuated an “obscene” system. “Members of Congress used earmarks to contract out their campaign financing,” he said. “It was the currency of corruption.”

He is consistently anti-spending, anti-tax and anti-deficit. A decade ago, he was one of the few House Republicans to oppose President George W. Bush’s expanded prescription-drug benefit for senior citizens because the measure wasn’t paid for. He has favored replacing the income tax with a national sales tax.

On the economy, Obama “has been a disaster,” he said. Yet the athletic and deeply tanned Arizonan concedes that the president “has a good jump shot,” which he observed when he was invited to play in one of the president’s pickup basketball games.

Unlike some of his colleagues, he doesn’t personalize his philosophical differences with Obama. “I’ve never been able to work up the hatred that some Republicans have for the president,” Flake said. “As a person, I like him; he’s a good family man.”

Sensible Stance

The fiscal conservative believes Tea Party-inspired plans to shut down the government or to oppose an increase in the debt ceiling and risk default unless Obamacare is killed are crazy. “It’s a mistake,” said Flake. He, too, is a critic of the Patient Protection and Affordable Care Act, but he says the hardline Republican approach “won’t work, and Congress is held in pretty low regard already.”

This sensible stance has drawn the ire of a few old allies. The Senate Conservatives Fund, a political action committee, is running ads against Flake and other Republicans who refuse to hold the government hostage to repealing the health care law.

The PAC gushed over Flake during his Senate run last year, and its chairman, former Republican Senator Jim DeMint, endorsed him: “When it comes to fighting wasteful spending and parochial politics, nobody has done more to advance the cause of freedom than Jeff Flake. Nobody.”

Today, Flake shrugs off the criticism as well as the more vicious attacks on his Syria vote and his immigration stance, but he regrets the more acrimonious political climate. “The last five years or so, this has become a lot more intense,” he said. “It’s the shirts versus the skins; you can’t work with the other side on anything.”

He said he would continue to seek common ground with the other side: “There are a lot of talented, straight-shooting Democrats here.” Specifically, he cites his work with West Virginia senator Joe Manchin on regulatory matters, with Colorado senator Michael Bennet on immigration, and with a fellow freshman, Martin Heinrich of New Mexico, on questions related to public land.

Most of his closer Republican colleagues share his fiscal conservatism: Tom Coburn of Oklahoma, Pat Toomey of Pennsylvania and Florida’s Marco Rubio, with whom he also worked on immigration. He also has high regard for — and often defers to — McCain, even though his Arizona colleague doesn’t share all his conservative views.

The breakdown in comity and increased political polarization, he said, doesn’t just stymie liberals; it’s harmful to conservative causes, too.

“As an advocate of limited government, I’m often not opposed to gridlock,” he said. But the lack of any regular order in the Senate “inhibits oversight and other responsibilities.”

The result often is destructive and mean-spirited politics: “When you engage in vitriol,” he said, “it always comes back to haunt you.”

Sept. 9 (Bloomberg) — Congress is like a seamless web where every action has an effect on those that follow, the late Richard Bolling, a longtime member of the House and a congressional scholar, used to remind young reporters.

The Barack Obama administration will confront that reality this autumn in the aftermath of its request for congressional approval for a military strike against Syria.

The outcome remains in doubt, though there may be an even chance that after a near-death experience or two, Congress will authorize a strike in a close vote.

There is little doubt, however, that this struggle, which will occupy most of September, will affect other big issues: the high-stakes deficit and debt-ceiling battle, the fate of a comprehensive immigration bill in the House — and perhaps in the Senate — and the nomination of the next chairman of the Federal Reserve.

This is mostly downside for the White House. If President Obama wins on Syria, most Republicans who supported him will want to take their distance on other issues; the party’s base is dominated by Obama haters. Getting the reluctant backing of some liberal Democrats for military action might add to the tension on the fiscal issues and the Fed pick.

Some Obama loyalists make the case that the Syria resolution, if approved, could lead to other successes. Working across party lines might prove contagious, precipitating a search for more common ground.

“It’s too early to tell what the fallout from this vote will be on other issues,” says Representative Chris Van Hollen of Maryland, the leading House Democrat on fiscal issues, but “there will be ripple effects.”

Others believe a Kumbaya moment just isn’t possible in the Washington of today: “If a Republican gives the president a vote on this, they’ll have to go back to the base on the fiscal stuff and maybe the Fed,” says former Republican Representative Tom Davis, an astute analyst of U.S. politics.

House Speaker John Boehner, who will probably be part of a distinct minority of his caucus in voting for the Syria measure, will be under enormous pressure to move right. “Coming right on the heels of Syria, House Republicans have to get something in return on debt,” Davis says.

The Democrats, who are counting on winning at least the public-opinion battle in the fiscal war, may find it harder to depict Republican leaders as partisan nihilists if those leaders have just bailed out the president on Syria.

Democrats are worried that after using all his chits to get barely enough votes for the strike resolution, Obama — whose negotiating skills are suspect to many on Capitol Hill — might then be too eager to cut a fiscal deal.

Especially worrisome would be if Republicans demanded, as the price for Syria, a rollback of the cuts to defense spending under sequestration. Liberals are adamant that any changes to the automatic reductions must apply equally to domestic and military programs.

Immigration reform, which cleared the Senate handily, already faces a tough slog in the Republican-controlled House. As with the deficit and the debt-ceiling increase, the Syria debate and vote won’t make this any easier.

Final passage of comprehensive legislation, with a pathway to citizenship for undocumented immigrants, can be achieved only with a minority of Republicans. That would force the Speaker to waive the so-called Hastert rule, which asserts that a bill only can be considered if it commands the support of a majority of the Republican caucus. Boehner will already have had to waive the rule for the Syria vote and may not be able to return to the well.

There is no rational reason the confirmation of the next Fed chairman should be affected by any of this. Congress isn’t a rational institution these days, and the president’s preferred choice for head of the central bank, former Treasury Secretary Larry Summers, is a contentious figure in a wide array of political constituencies.

Many conservative Republicans oppose Summers’s nomination because they hold him responsible for the economic stimulus and the rescue of the automobile industry, and because he served as president of Harvard University, a supposed hotbed of liberal orthodoxy. He has incurred the wrath of some Democratic liberals for spearheading financial deregulation in the late 1990s and working for Wall Street after leaving his position as director of the National Economic Council in 2010.

A top Democratic Senate strategist worries that the administration would have a hard time selling a Summers nomination to the same liberal senators — Tom Harkin, Sherrod Brown and Elizabeth Warren — it is now trying to woo on Syria.

If Summers is tapped — he’s the clear frontrunner — Obama would count on support from key Republicans such as Senator Lindsey Graham of South Carolina. Graham is fighting a primary challenge from Tea Party conservatives, who criticize him for supporting the president on immigration, Syria and for his approach to the sequestration.

The stakes for Obama on Syria are impossible to exaggerate. A loss would make his presidency appear impotent and damage the U.S.’s global standing. The president realizes this: He called skeptical senators from the Group of 20 meeting in St. Petersburg, Russia; he talked to one Democrat for more than a half-hour, the longest one-on-one conversation that lawmaker has had with him. The president is scheduled to deliver a national address from the Oval Office on September 10. Will he enlist former Secretary of State Hillary Clinton to lobby wavering Democrats?

A victory in Congress on Syria would be an important achievement. It may only be short-lived politically.

(Albert R. Hunt is a Bloomberg View columnist.)

AFP Photo/Mark Wilson

Aug. 26 (Bloomberg) — One of the first cases the Supreme Court will consider in its next session is whether to allow millions, perhaps billions, more dollars into the U.S. political system.

That may seem like a joke considering that more than $6 billion was pumped into last year’s elections. A flood of special-interest money, courtesy of rulings by Chief Justice John Roberts’ court, led to a campaign that many found depressing.

The issue that will be argued on October 8 is whether to remove the almost four-decade limit on the aggregate amounts any contributor can give directly to candidates and parties for federal elections in a single cycle. There are no limits now on independent expenditures or money given to political action committees, creating what critics call a system of legalized indirect bribery.

If the court decides to remove most of the limits on upfront contributions to presidential or congressional campaigns, it would no longer be indirect.

Going back to its first major campaign-finance decision in 1976, the high court has always distinguished between contributions, and majorities have ruled they can be limited to prevent corruption or the appearance thereof.

That contrasts with expenditures that the court has ruled are a form of speech. These rulings included the lifting of the ceiling on the amount of personal money a rich candidate could spend and the infamous Citizens United case, which freed corporate money to be spent on supposedly independent political expenditures.

Then a lower court gave the green light to wealthy individuals to give unlimited sums to so-called SuperPACs, which back politicians but are supposed to be distinct from the campaigns, which is a bit of a fiction.

Until now, the high court has consistently upheld limits on direct contributions to candidates for federal office or political parties. If the court reverses these precedents, the impact on campaign spending and influence-peddling would be considerable.

“The consequences could be worse than Citizen United,” says Fred Wertheimer, the president of Democracy 21, who has been a tireless advocate for campaign-finance reform for 40 years.

Critics of campaign-finance limits reply that such alarm is typical of ole Fred, who claims the sky is falling every time another dollar is thrown into politics. And, they believe, the public won’t be aroused by arcane fights over “aggregate” ceilings.

Yet Wertheimer, and the amicus brief to the Supreme Court filed by former U.S. Solicitor General Seth Waxman, is taking on big stuff.

It’s first necessary to understand that all political spending isn’t equal. Any campaign will tell you that the money it controls is far more valuable than the money spent by outside supporters. The money unleashed by Citizens United and other decisions contributed to the ugly tone of last year’s campaign, but it wasn’t as important as the money spent by President Barack Obama, former Massachusetts governor Mitt Romney and most congressional candidates.

Under current law, a rich contributor, who can spend any amount on independent efforts or SuperPACs, is limited to donations of $74,600 an election cycle to the party committees; in addition, a total of $48,600 can be given to individual candidates.

Here’s what would happen if the court strikes down these aggregate limits:

Let’s say that for 2016, a presidential candidate — Hillary Clinton, for example — set up what’s called a joint fundraising committee. She could then ask, among others, the Hollywood mogul and Democratic money man Jeffrey Katzenberg to give directly almost $1.2 million to her committee, in addition to his other political spending.

That would include the maximum allowed to her campaign, $5,200; the maximum to the three party committees, $194,400; and the maximum to all 50 state parties, $20,000 each or $1 million. Although most of this money is supposed to go to state parties or other campaign committees, the Clinton campaign would effectively control it. That adds considerable value and clout for any donor.

A similar joint fundraising committee could be established by, say, House Majority Leader Eric Cantor.

Then, Harold Simmons, the Texas billionaire with interests in mining and toxic dump sites who is always on the lookout for political favors (he doled out $27 million last year), could give Cantor’s committee directly more than $2.3 million. This would include $64,800 for the House campaign committees and the maximum of $5,200 a candidate for the 435 House candidates.

Although it’s only 10 percent of what he gave in independent spending and to PACs last year, this form of direct giving to a powerful politician is more valuable to Simmons as a political investment.

The Waxman brief argues that lifting these limits would “effectively negate” the ban on so-called soft money enacted in 2002, under the McCain-Feingold law. Ten years ago, the Supreme Court said these soft-money contributions were “likely to create actual or apparent indebtedness on the part of federal officeholders.”

A dueling brief on behalf of Senate Minority Leader Mitch McConnell, filed by the veteran campaign-finance lawyer Bobby Burchfield, argues against drawing any real distinction between expenditures and contributions. As for precedent, it said the Roberts court “has not hesitated to overrule decisions offensive to the First Amendment,” citing Citizens United.

Because the aggregate limit doesn’t preclude a politician from taking money from any contributor — it only limits the total amount that can be given — Burchfield pointed out that big money is more important than small donations. This is evidenced, he writes, by the fact that so many contributors give the maximum amounts allowed.

With these aggregate limits, anyone could give $100 to every member of Congress of his or her party and $2,000 to a presidential candidate.

That wouldn’t impress the politician or buy as much influence as several million bucks.

(Albert R. Hunt is a Bloomberg View columnist.)

Aug. 19 (Bloomberg) — North Carolina is channeling Alabama and South Carolina when it comes to the best economic, social and political model for a U.S. Southern state.

For more than half a century, North Carolina has been progressive on education and public investments, and pro- business — witness the celebrated Research Triangle between Raleigh, Durham and Chapel Hill and the financial center in Charlotte — with less racial strife than other Southern states.

As Republicans took full control of the state government in Raleigh, there has been a shift to the right. Taxes for the wealthy have been slashed, and spending for education and programs that benefit the poor have been cut. Abortion has been restricted, and guns rights expanded.

At the end of the legislative session in July, in a state that has enjoyed relatively good race relations — which the business community both encouraged and benefited from — voting privileges for blacks were targeted.

Governor Pat McCrory, a Republican elected last year, says the turn to the right is necessary and is paying off.

“We’re getting tremendous positive feedback from the business community,” he said in an interview. His state had “lost its focus,” and needed to be “shaken up.”

To critics, this conservative agenda — much of it orchestrated by Art Pope, the governor’s budget director and the multimillionaire retailer who is the Tar Heel State equivalent of the Koch brothers — threatens the state’s legacy.

“We’re turning back everything that made us different from other Southern states,” said Jim Goodmon, the chairman of CBC New Media Group LLC and owner of the Durham Bulls Minor League baseball team. “With this shift, economic development is broken.”

Ronnie Bryant, the chief executive officer of the Charlotte Regional Partnership, the area’s top economic development recruiter, recently complained to the Charlotte Observer that all the efforts of recent years to promote Charlotte as a business center “have been negated in the last few weeks.”

He said business leaders elsewhere are asking: “What the hell are you guys doing?”

Ann Goodnight, a powerful advocate for higher education in the state whose husband is CEO of the giant technology company SAS Institute Inc., wrote a letter to the Raleigh News and Observer charging that cuts in education funding were a “grievous mistake.”

The places that succeed in economic competitiveness, she wrote, “are investing in education and using the playbook we once embraced.”

The biggest firestorm erupted when the legislature changed voting procedures, requiring a state-issued photo ID, limiting early voting and ending same-day registration — practices used disproportionately by blacks.

“They are extremists, and are playing the race card,” said the Reverend William Barber, head of the state’s chapter of the National Association for the Advancement of Colored People, which is organizing multiracial coalitions around the state, and turning out thousands to protest these changes.

On taxes, the Republicans cut the corporate rate, ended the progressive personal income tax and eliminated the estate tax, which affected, on average, fewer than 75 families annually and will cost the state $300 million in lost revenue over the next five years. The legislature also decided not to continue the earned-income tax credit for the working poor.

North Carolina requires a balanced budget, and new expenses must be offset elsewhere.

“They put in place tax cuts that overwhelmingly benefit millionaires,” said Alexandra Sirota, director of the left-wing North Carolina Budget and Tax Center, “while choosing not to extend a tax credit for the working poor.”

The governor, who is as moderate in demeanor as his previous record as mayor of Charlotte suggests, denied that he’s been captured by the right. The tax cuts were essential, he said, because North Carolina was falling behind economic competitors such as South Carolina. He points out that spending for kindergarten through 12th grade increased (though not enough to keep up with inflation and population growth) and that funding for community colleges was cut because enrollment is down. Asked about support for the world-class University of North Carolina, the 56-year-old governor replied, “They can’t be satisfied with the status quo.”

Goodnight, he said, is a Democrat. Besides, he added, her husband supports him. When asked about the alleged voting fraud that mandated the changes in procedure, he offered no specifics: “It’s like insider trading; you don’t know until you look.”

The governor bristled at claims that Pope is the real kingmaker. “When he made Pope the budget director,” Goodmon said, McCrory “became a puppet.”

Pope’s political contributions, the governor said, are no different from Goodmon’s giving to Democrats. He depicts his budget director as a fiscal conservative, a benign libertarian with no racial animosity. Pope declined a request for an interview. The governor said he has headed off some right-wing moves, vetoing a bill subjecting welfare recipients to drug tests and killing a measure that would have created an official state religion.

Yet, Goodnight points out she’s a registered Republican. Goodmon’s contributions — mainly, though not exclusively to Democrats — pale next to the millions of family wealth that Pope has given to the Republican Party through his political action committee, foundations and personal contributions.

As for the competition with South Carolina, the two states last year had roughly identical, strong economic growth and both have jobless rates worse than the national average. Multiple surveys have long rated North Carolina’s one of the best business climates in the U.S., its higher education system is better than its neighbor’s, wages are higher and poverty less pervasive.

North Carolina, dating back to the 1960s and Terry Sanford, the country’s best one-term governor, and four terms of Jim Hunt, produced a much-envied system of higher education and community colleges, good race relations, a desirable quality of life and a healthy business climate. The debate about its usefulness today will persist. The North Carolina model, which served the region and country so well, is gone.

(Albert R. Hunt is a Bloomberg View columnist.)

Photo: Mr T in DC via Flickr.com

August 11 (Bloomberg) – As hundreds of U.S. lawmakers fan out to their home districts this month, there is a genuine political conundrum.

Approval ratings for Congress are at an all-time low, rivaling those of junkyard dogs. Republicans are seen as the main villains; the party’s standing with the public keeps falling.

So what’s the outlook today for next year’s congressional elections? Republicans will hold the U.S. House, conceivably even adding to their 233-to-200 majority. They seem certain to pick up U.S. Senate seats, with an outside chance to gain the half-dozen needed for control.

There are many explanations: the voter profile of the off-year electorate, the way House districts are drawn, the fact that most of the competitive 2014 Senate races don’t favor Democrats, the deteriorating enthusiasm for President Barack Obama.

Events could change those prospects. Republicans may overplay their hand by shutting down the government in a budget dispute this autumn or by undermining the U.S.’s good faith and credit in refusing to raise the debt ceiling. They overreached in 1998 with the planned impeachment of President Bill Clinton and ending up losing seats.

Voter Alternatives

Republican pollster David Winston foresees a good Republican year but warns it is far from assured: “There is an opportunity, not an outcome,” he says. “Voters aren’t looking for an opposition party; they are looking for an alternative.”

To date, on issues such as Obama’s health care measure — which House Republicans have voted to repeal or defund 40 times — they are short on alternatives. Still, Winston and others agree with the assessment of Cook Political Report’s David Wasserman that the Republicans have a “built-in midterm turnout advantage.”

Compare, as Wasserman does, the compositions of the electorate in 2010, a banner year for Republicans, and in 2012, when Obama and Democrats did well. Last year, almost 1 in 5 voters were younger than 30; two years earlier, this age cohort made up only 12 percent of the electorate. The reverse is true of those older than 65: One in 6 presidential-year voters were senior citizens; in 2010, it was 21 percent.

That makes a huge difference because more than half of young voters vote Democratic these days, and, with a few exceptions, similar percentages of senior citizens prefer Republicans. Older voters, Wasserman notes, “are less transient, have grown deeper roots in their local communities and pay much more attention to nonpresidential years.”

A similar pattern when it comes to race and religion helps Republicans in off-year contests. The electorate is more white, more evangelical, and less black and Hispanic.

Redistricting, which Republicans dominated after the last election, gives an advantage to start, as Democrats tend to congregate more heavily in fewer districts.

As a result, though Democrats won the overall popular vote for the House in 2012, they ended up 17 members shy of the majority. To pick up that many seats, according to Mark Gersh, long the party’s foremost analyst on House elections, they might have to win the popular vote by as much as three to four percentage points next year.

There are some heavily populated blue, or Democratic, states where seats are in play. Democrats, however, scored major gains last time in those states, such as New York and Illinois, picking off the low-hanging fruit.

Senate Races

The Senate isn’t affected by redistricting, but this year, the draw is bad for Democrats. After New Jersey’s special election in October, which Democrat Cory Booker is favored to win, 20 of the 34 seats that will be up next year are currently held by Democrats. Moreover, almost all the most competitive contests are in red, or Republican-dominated, states: Arkansas, Louisiana, West Virginia, South Dakota, Alaska and Montana — states that went decisively for Republican presidential nominee Mitt Romney last year.

The two Republican-held Senate seats that afford Democrats the best chance for a pickup also are in red states. In Georgia, the incumbent Republican is retiring and Michelle Nunn, the daughter of the popular former Democratic Senator Sam Nunn, is running. It isn’t improbable that a right-wing Republican congressman will emerge from the crowded primary field. There is also Kentucky, where Mitch McConnell, the Senate minority leader, faces a Tea Party challenge from the right and would likely face the state’s Democratic secretary of state in the general election. Even in the most favorable circumstances, Kentucky is a tough slog; Obama lost the state by 23 points.

Two Democratic Senate leaders, Nevada’s Harry Reid and New York’s Chuck Schumer, outsmarted themselves in one race, South Dakota, pressuring Brendan Johnson, a U.S. attorney and son of retiring incumbent senator Tim Johnson, not to run in order to clear the way for former Congresswoman Stephanie Herseth Sandlin. She didn’t run and neither did Johnson, whom top South Dakota Democrats believe would have been the stronger candidate. Now, Republicans are heavy favorites to win that seat.

Adding to the headwinds is a malaise among core Democrats. The number of people who think the country is on the wrong track is growing, as are negative attitudes about the economy. Although the president is much more popular than Republicans, his job-approval rating — in the mid-40 percent range — is the lowest for any second-term president at this juncture since Richard Nixon. That makes it hard to gin up a base next year.

“Democrats are better off only in comparison to Republicans,” says Fred Yang, a Democratic pollster.

Whatever the outcome next year, Yang says Republicans should remember that their problems are more deep-seated: “They may win some battles; they’re losing the war.”

(Albert R. Hunt is a Bloomberg View columnist.)

Photo: DonkeyHotey via Flickr.com

Aug. 5 (Bloomberg) — Democrats and Republicans, bracing for a game of chicken over a possible government shutdown and a debt-ceiling default, should rewatch the 1955 movie Rebel Without a Cause, starring American icon James Dean.

A thug challenges Dean’s character to race their stolen cars toward an abyss. The first driver who jumps out of his speeding vehicle is a coward. Dean leaps just as his car is about to go over the cliff; the other guy’s leather jacket gets ensnared in the door handle, and he plunges into the void.

In Washington, both sides anticipate a huge fight this autumn over the budget, the mandatory spending cuts under the so-called sequestration and the debt ceiling. They’re expecting the other guy to jump first.

House Republicans think President Barack Obama is bluffing when he says he won’t negotiate on lifting the debt ceiling. They contend that the president’s position isn’t nearly as strong as it was at the end of last year, when the tax cuts enacted under President George W. Bush were about to expire. Obama, who had lots of leverage then, got half a loaf.

The White House recalls Speaker John Boehner’s discomfort with the game House Republicans played with the debt ceiling in 2011, which hurt both the economy and their party. Privately, they say that Boehner doesn’t wish to wage that fight again when the limit is reached late this year and that his demand that any increase in the debt ceiling be matched by comparable spending reductions is a bluff. That position is unacceptable to Obama and Democrats.

The stakes are high in this game of chicken; a miscalculation could send shock waves through the economy.

The probability is that any budget deadlock, which could force a government shutdown and action on the much-discredited across-the-board sequestration cuts in defense and non-defense discretionary spending, will be postponed beyond the Oct. 1 deadline. Then, everything, perhaps including any tax reform initiative, will be thrown in with the debt-ceiling increase sometime in November.

There were plenty of private partisan and bipartisan conversations before the congressional recess, which began August 2. Some of these discussions will continue this month. No one is confident of the path, much less the outcome.

The early budgetary battle lines for the fiscal year that begins Oct. 1 have been drawn, and the two sides are almost $100 billion apart. Neither starts from a position of strength. The White House has made little progress on its insistence on additional revenue. House Republicans had to pull a spending bill containing big cuts from the floor last week for lack of votes. It is relatively easy for most Republicans to support a scaled-back budget concept; actually cutting programs is tougher.

Much of the negotiations when Congress gets back in September are likely to focus on the sequestration, which was adopted only because any agreement on regular spending measures collapsed. The sequestration is indiscriminate, makes for poor policy and is ridiculed by most members of Congress, from defense hawks to domestic policy progressives. It’s just that they can’t agree on a replacement, as House Republicans continue to pretend that the Pentagon will largely be spared.

Treasury Secretary Jack Lew made clear a week ago that any changes to the sequestration had to equally affect non-defense discretionary cuts as well as defense. There are a number of senators, from both parties, who would support such a deal.

There is a rational replacement that makes for better economic and fiscal policy and addresses top political concerns — for the Democrats, the necessity of more revenue, and for the Republicans, to start addressing entitlements. The cuts in discretionary domestic programs — which as a percentage of the economy are headed to the lowest level since the Eisenhower administration — would be replaced with cuts in entitlements, principally health care, that the White House would accept.

Higher revenue would substitute for the defense cuts. Given the political realities, that solution probably couldn’t fly for more than a year. At this stage, it’s doubtful even it could get through the House.

The cherished, elusive grand bargain — significant cutbacks in entitlements and more revenue, coupled with short- term stimulus spending on infrastructure and selected other programs — would boost the economy, increase market confidence and perhaps reduce some of the political pettiness that engulfs Washington. The partisan-inspired paralysis makes that a nonstarter.

The best hope is for a mini-bargain, building on a sequestration deal that itself may not occur. There is little good faith on either side, with many expressing disdain for one another. Republicans seem convinced Obama’s no-negotiations on the debt ceiling stance amounts to posturing. He has backed down before and, in a view shared by a number of Democrats, tough negotiating isn’t this White House’s forte.

The Republican blustering is more striking. Privately, some have suggested giving Obama a multi-year extension of the debt ceiling in return for changes in Medicare, including raising the eligibility age. Boehner continues to advance the notion that any increase in the debt ceiling must be matched dollar-for-dollar with spending reductions.

The biggest fraud is led by a few right-wingers in the Senate, principally Ted Cruz of Texas, who insist that an increase in the debt ceiling must be accompanied by the defunding of Obama’s health care measure. Cruz plans to barnstorm the country for 10 days this month to rally the faithful — and collect names and maybe money for any presidential hopes — to this illusory demand.

None of this is serious.

There are two possible outcomes. A one-year arrangement containing small, cosmetic changes that postpones bigger decisions. The other is going over the cliff, à la Rebel Without a Cause.

(Albert R. Hunt is a Bloomberg View columnist. The opinions expressed are his own.)

Photo by Talk Radio News Service/Flickr

July 29 (Bloomberg) — Washington being Washington, the hottest relationship in town doesn’t revolve around sex or even the next presidential election: it’s the political courtship of old antagonists, Barack Obama and John McCain.

Political relationships, especially those involving the president, are the sustenance of the American capital. Sometimes they are poisonous: President Lyndon Johnson and Robert F. Kennedy, as captured in the latest volume of Robert Caro’s biography of LBJ. At other times, they are lopsided, as when Bill Clinton dominated Newt Gingrich under the guise of working together. Every now and then, there are adversarial/symbiotic relationships that, on balance, get things done: Ronald Reagan and Tip O’Neill in the 1980s, for example.

The association between Obama and McCain is different. But it may be Washington’s most important since Reagan and O’Neill.

McCain, 76, whose political resiliency is rivaled only by such luminaries as Bill Clinton and Richard Nixon, is the most pivotal figure in the Senate today. He often is more central than the party leaders, Mitch McConnell, the Kentucky Republican, or Harry Reid, a Nevada Democrat, or the self-styled new power broker, the New York Democrat Chuck Schumer.

When McCain is with the president — on immigration and in brokering the recent deal to secure Senate approval of stalled Obama nominees — they usually can trump the political right. When he’s against him — sabotaging Obama’s plan last year to nominate Susan Rice as secretary of state — the White House rarely prevails.

Their previous strains predated 2008, when they vied for the presidency. Obama saw his Republican rival as an embittered, compromised maverick who treated him as an undeserving upstart. That was close to the mark. After he lost that election, McCain saw Obama as naïve, aloof and surrounded by too many sycophants.

In 2011, there was a move to détente after Arizona representative Gabrielle Giffords was shot. That, however, was “a false start,” McCain recalled in an interview last week.

This time, political convenience broke the ice. A re-elected president soon realized that without the support of a small core of Senate Republicans, any agenda was doomed. McCain, who moved right to fend off a Tea Party primary challenge in 2010, was itching to reclaim his maverick persona and wage a two-pronged battle: against the isolationists and political right of his own party and against the national-security left wing in the Democratic camp.

Since the January inauguration, Obama and McCain have met a dozen times. In half of those occasions, they were either alone or with only a few other principals. Although the discussions were usually about immigration policy, they invariably ranged more broadly.

There are huge tests ahead, especially the budget/debt ceiling/sequestration battles this autumn. McCain, the defense hawk, despises the across-the-board cuts to defense and discretionary domestic spending required under sequestration and wants to help forge a compromise replacement involving more taxes and cuts in entitlements.

The odds are against that happening; most House Republicans are more eager for an economy-threatening standoff than for an accord. The only slim hope is a deal, led by the White House and a small group of McCainites.

McCain also wants to help Obama fulfill his promise to close the detainee camp for terrorism suspects at Guantánamo Bay, Cuba. He says political conditions are much different from four years ago, when there was a similar effort.

“The difference between 2009 and 2013 is the administration now has a plan,” he says.

Last month, the five-term senator traveled to Guantánamo with Senate Intelligence Committee chairman Dianne Feinstein and the White House chief of staff, Denis McDonough.

McDonough, who McCain knew as a mid-level aide to former Democratic Senate Leader Tom Daschle, is a glue that binds the Republicans and the administration. He and McCain talk as often as five times a day. In addition, the Republican senator has a great fondness for Vice President Joe Biden, a good working relationship with Secretary of State John Kerry and is a fan of United Nations Ambassador-designate Samantha Power.

He’s also an unrelenting critic of much of Obama’s foreign policy. He sees the president as indecisive or soft on Syria, Egypt and Afghanistan. He has a long running feud with General Martin Dempsey, the chairman of the Joint Chiefs of Staff.

He has no regrets about torching Rice’s appointment to be secretary of state, and continues to suggest that she dissembled on the terrorist attack last year against a U.S. mission in Benghazi, Libya. But when she was tapped to head Obama’s National Security Council, McCain wrote a Twitter post saying that he’d make “every effort” to work with her. She contacted him, they had a cordial meeting and he asked her to discuss Syria with one of his confidants, retired General Jack Keane. Rice met with Keane: “I can’t ask for anything more,” McCain says.

He’s as eager to take on the Rand Paul isolationists within his party. In an April speech at the Center for a New American Security, he focused criticism on his fellow Republicans. He has disdain for much of the movement right and little regard for Senate Majority Leader McConnell.

In the interview in his Capitol hideaway office last week, the never combat-shy McCain seemed to revel in his reclaimed persona and his multifront battles. He suggests, however, that his style is changing.

“The biggest mistake I used to make was getting personal,” he says, declaring that that his role model now is the late Democratic senator Ted Kennedy, who was a friend.

One prominent Democrat, who knows both Obama and McCain well, is certain the senator genuinely wishes to work with the president. Noting that for all the assistance of McDonough or even Biden, at this level, interactions ultimately depend on principal-to-principal connections, and this politician worries that Obama doesn’t do relationships well.

Asked about that, McCain paused, then acknowledged that the president isn’t a “schmoozer” like his predecessors Clinton and Reagan.

“He’s willing to compromise but sometimes not sure he knows exactly how to do it,” McCain says. “We can help.”

(Albert R. Hunt is a Bloomberg View columnist. The opinions expressed are his own.)

Photo: Gage Skidmore via Flickr.com