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The House Leadership Folds -- For This Hand

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Well, things in Washington get curiouser and curiouser. Two major events today.

In a stunning (if not final) victory, the House leadership has stripped provisions to drill the Arctic National Wildlife Refuge from their version of the Budget Reconciliation bill, along with Richard Pombo's language to open up the coasts for oil drilling. Two dozen Republican moderates made it clear to their leadership that they would not support reconciliation if it contained these drilling provisions and, most hopefully, a number of them are asserting that this is a deal "through conference" -- meaning that they are committed to voting against the final bill if the Senate and House conferees put the Arctic back in. (Since the Senate bill does not contain the offshore coastal drilling language, that ought to end the offshore drilling threat for this year. But conferences in this Congress don't always play by the rules.)

It's particularly heartening that New Hampshire Congressman Charles Bass, one of the leaders of the House moderate Republicans, is very visibly and publicly taking credit for this victory back home, making it much less easy for the House leadership to roll him by putting the Arctic back into the bill in conference. And here's what New York Republican Congressman Sherry Boehlert had to say: "I want something more than a feel good press release that will be operable for no more than a few hours.

Then, at about 3:30 DC time today, the House leadership decided to call it a day and pulled the whole Budget bill and go home for the Veteran's Day recess, because even without Arctic drilling they can't muster the votes to pass their budget. Whether they can put Humpty Dumpty together again by next week is anyone's guess.

Even though this is an enormous victory, a complicated poker game is still going on. Over on the Senate side, the immediate action is on the tax portion of the budget. If Senator Olympia Snowe holds firm on her promise to block extension of the Bush tax cuts, or if Ohio's George Voinovich keeps his promise to oppose tax cuts if they do get to the Senate floor, then the main attraction of the budget reconciliation process for the Republican leadership -- that it shields tax cuts and Arctic drilling from filibusters -- gets a lot less attractive. That might yield an outcome in which, while the Senate and House go to conference, neither side budges and they never come out of conference -- so there is no final Budget Reconciliation bill.

Or, the House leadership could ignore the results of this week's mid-term elections and the revolt of the moderates. It might give the Senate what it wants on the Arctic, in exchange for the Senate taking the higher House cuts in social spending, fuelling the moderate rebellion in the Senate. At that point the final Reconciliation bill could fail in either house -- or conceivably both,which is not that far-fetched: The current Congressional leadership has always chosen to double down when holding a weak hand, and they might do it again.