Senate Republican Leader Mitch McConnell has blinked. His proposal late yesterday afternoon to give President Obama the power to raise the Federal Debt Ceiling -- without the previously demanded budget cuts -- is the beginning of the Republican collapse in their stand off with the president and Democrats.
The exact terms of surrender have yet to be negotiated, but there is little question that the Republican forces have begun to break into a full retreat from their demands that they would only vote to increase the debt ceiling if Democrats agreed to a comparable cuts in spending -- with not a dime of increased tax revenue from the wealthy.
Why has the battle turned?
First, the Republican position demanding massive cuts in Social Security, Medicare, Medicaid and other critical middle class programs -- without a dime of new revenue from millionaires, billionaires, oil companies and CEO's who fly around in corporate jets -- simply won't sell to ordinary American voters.
Since the passage of their budget that would end Medicare, Republican members of Congress have faced angry crowds at town meetings across the country. At the same time President Obama called the Republican's bluff in challenging them to make a "grand bargain" to bring down the deficit that would include increased taxes on the rich. The Republicans wouldn't budge when it came to raising taxes on the wealthy. Together, citizen outrage and the President's strategy gave Democrats the high political ground.
Second, Wall Street and the CEO class finally reached out and yanked McConnell's leash. As the debt ceiling deadline drew near the CEO's, that are the real base of the Republican Party, basically told the party leadership that they were not about to allow them to sink the economy and their portfolios just to pander to the Tea Party.
Yesterday what the Washington Post called a "sprawling" coalition of Wall Street and Main Street business leaders "sent an unmistakable message to lawmakers Tuesday: Enough squabbling. Get the debt ceiling raised."
This was a "remember who you work for" moment. The Republican Party exists to advance the interests of Wall Street and American big business. Now the CEO class is as interested as can be in cutting taxes for the rich and reducing the size of the public sector. But they're not at all interested in risking another great Recession or worse. The Republican position from the beginning was that if Democrats didn't agree to their demands, they would pull the pin the grenade and blow everyone -- including their Wall Street masters -- to smithereens. So after allowing the Republican leadership adequate time to bark, growl and posture, big business has decided it is time for some obedience training.
Finally, we just got a glimpse of the complete anarchy in the Republican Party. There is a huge fissure between the Wall Street/CEO Party regulars and the Tea Party insurgents that never got the memo about who paid for all those campaign commercials that put them in Congress and have decided to pander to the social conservative, "big government-hating" rank and file.
This division is played out in the power struggle that has erupted between House Speaker John Boehner and second-in-command Eric Cantor. And the division is exacerbated by a fleet of want-to-be Presidential candidates competing every day over who can cram more right wing nostrums into a single sentence.
There is a good case to be made that this conflict will break out into open civil war in the House Republican Caucus and a coup against Boehner. If not, the debt ceiling battle will likely leave Boehner politically emasculated.
The default crisis is far from over, but last night the tide of the battle decisively turned.
Robert Creamer is a long-time political organizer and strategist, and author of the book: Stand Up Straight: How Progressives Can Win, available on Amazon.com. He is a partner in the firm Democracy Partners. Follow him on Twitter @rbcreamer.