Ok. I am not usually prone to hyperbole, not am I a big fan of "News" programs: Fox, CNN, MSNBC, take your pick. Their job is to sell entertainment to their audience as it's represented to their advertisers. So let's go past those guys. My favorite one is CNN's "countdown" clock which turns an incredibly serious issue into a SuperBowl countdown timer... as if there is some concept of "winner" and "loser" here (hence, my selected title).
Let's look at what's going on here. I would bet about 10:1 that the absolute minimum compromise will pass at the last possible second preceded by a lot of aggressive posturing by party figureheads. Why? Because that's how you hedge for future elections. If a few minor senators on both sides cave at the last second (on both sides) they can always run on the "had to do what's best for America even if it wasn't what I wanted" ticket - which might work if you're a low ranking schmuck. The high powered guys, in the mean time, need to posture very hard and strong so they can run on the "I refused to bend to the other side" ticket.
Don't get me wrong... I think politicians are by and large good intentioned. I think underneath this posturing, most of these guys really DO want what's best for the country.
Here's the problem. We elect leaders every few years, not every few decades. The debt problem requires a multi-decade approach. How can people incentivized for a couple of years of performance possibly embrace a policy that requires multiple decades unless they are some kind of self-sacrificing idealists - who don't do well in US politics anyway. In reality, we don't really want to solve this problem... not right now; but we never want to solve it right now.
Imagine if you've maxed your credit cards and your rent is due. You don't have the money. Suddenly at the last second you get a bump in your debt maximum. Lucky you! It would be IRRESPONSIBLE to let your family go homeless when you have access to the debt. It would be inhuman of the bank to force your family out on the street and increase the chances that you'll never pay it back. And so this confederation of insanity meets to ensure that the debt will essentially never decrease.
Beyond this is something even more tricky. Despite all the posturing and "reporting" on the news, the major politicians do not really fundamentally disagree on some key issues.
Let's look at the spending breakdown:
Neither side has ever really talked about cutting defense, Social Security or Medicare. There is some debate around "Safety Net Programs" but even if that's completely slashed it doesn't really get us there. As for all the other "Infrastructure" programs... you know useless stuff like education, transportation and scientific research. You could kill every last one of those and we still would run up the deficit.
At least the democrats are saying that to continue spending we have to get more money (in their case from additional taxes).
The real problem here is not that the parties can't agree or that the Tea Party has radicalized the political system. The real problem is that there is no incentive for a long term, serious solution based on some mixture of reduction in spending (perhaps in the holy trinity of Security, Social Security and Medicare - Medicaid) and/or increase in revenue. We just can't have it all people - no matter what the advertisers that pay the news shows to sell their products tell us.