At the betting market Intrade, Texas Gov. Rick Perry has overtaken Mitt Romney and is now considered the most likely person to win the Republican presidential contest. Mr. Perry is given a 35 percent chance of claiming the nomination as compared to Mr. Romney at 29 percent; Michelle Bachmann is a distant third place and assigned a 9 percent chance of winning.

Are the bettors being sensible or getting ahead of themselves? Although this is all fun and games as compared to the debt ceiling debate, a quick overview of the state of play is in order.

An average of the seven most recent polls of Republican voters (the six contained in the Real Clear Politics average plus the Economist / YouGov poll) finds Mr. Romney with the lead, with an average of 22 percent of the vote. After that, there’s essentially a four-way tie between Ms. Bachmann (13 percent), Sarah Palin (13 percent), Mr. Perry (12 percent) and Rudolph W. Giuliani (11 percent in the polls in which he is included). Herman Cain’s momentum appears to have faded, while Newt Gingrich and Tim Pawlenty are now often polling in the low rather than the high single digits.

The results tighten up a bit, however, once we adjust for name recognition based on the latest Gallup numbers. (Dividing a candidate’s polling average by his name recognition can somewhat improve the predictive power of early-stage polls.) In particular, Mr. Perry is recognized by only slightly more than half of Republican voters. Of those who recognize his name, 21 percent list him as their first choice, just slightly behind Mr. Romney at 25 percent.

Ms. Bachmann also moves up slightly by this metric — but her name recognition has already grown to 78 percent, leaving her somewhat less upside than she once seemed to have.

A more important contingency for Ms. Bachmann is whether Sarah Palin runs. Four of the polls ran versions without either Ms. Palin or Mr. Giuliani, and in those surveys, Ms. Bachmann’s support averaged 18 percent rather than 13 percent.

However, this version of the numbers helps Mr. Romney as well — his support grows to 27 percent from 22 percent. Some of that is the runoff from moderate-leaning voters who might have preferred Mr. Giuliani, although Mr. Romney might also be picking up a few Sarah Palin supporters who haven’t thought much about the field and are defaulting to the most recognizable names.

Mr. Perry, interestingly, is not helped in this case — in fact, with Ms. Palin and Mr. Giulaini out of the race, his numbers decline a bit to 10 percent from 12 percent. The decline shouldn’t be taken too literally and is likely a sample size fluke at least in part. But it hints that Ms. Palin’s entry in the race would take more votes away from Ms. Bachmann than it would from Mr. Perry and could plausibly make his path easier despite the more crowded field.

Mr. Perry, however, has also yet to officially enter the race, and that’s the reason why it may be at least a little premature to anoint him as the frontrunner.

It’s not that Mr. Perry is literally likely to skip the presidential derby after making so much noise about it — most reporting suggests that he’ll officially become a candidate. But Mr. Perry will be getting off to something of a late start and will have to spend time fundraising or tweaking his campaign staff while Mr. Romney is in New Hampshire and Ms. Bachmann and Mr. Pawlenty are in Iowa. While not likely to be a fatal flaw, this could harm him in some intangible ways down the road.

More important is that Mr. Perry has yet to really endure the period of heightened scrutiny that almost all the other Republican faced when they announced their campaigns — and with decidedly mixed results. Mr. Romney survived his roll-out relatively well, although he got poor marks from conservative commentators for his health care speech. At the other end of the spectrum are Newt Gingrich, who was all but dead on arrival, and Jon Huntsman, whose campaign is moribund.

Apart from the general vetting that will take place — something that is relatively less likely to be a problem for Mr. Perry, the four-term governor of the nation’s second-largest state — there may be questions raised about his electability (is nominating a conservative Texas Republican the equivalent of a liberal Massachusetts Democrat?). Given his late start, comparisons may be made — perhaps unfairly — to Fred Thompson, whose 2008 campaign flailed.

And Mr. Perry will have to decide how to position himself between the establishment and the Tea Party. But that is a nice choice for a Republican candidate to have: Mr. Perry is probably the most capable of the candidates to maintain credibility with both groups. Given how conservative the Republican electorate has become, particularly in states like Iowa and South Carolina, Mr. Perry is probably closer than Mr. Romney to the median Republican primary voter.

So we have these two factors to weigh against one another: the fact that Mr. Romney’s campaign is at a far more advanced stage against the fact that Mr. Perry’s positioning is probably more in line with the mood of the G.O.P. electorate. You can make a credible case for either one; I tend to default toward Mr. Romney because he’s still a little bit ahead in the polls.

If Mr. Perry’s roll-out goes well, however, the Republican campaign could well develop into a heavyweight battle between the two rather than the Lord-of-the-Flies scenario that had seemed more likely before.

Ms. Bachmann or Mr. Pawlenty could also make themselves factors by winning Iowa, but they risk being relegated to the undercard if Mr. Perry gets off to a fast start. Look for them to throw a few banana peels his way to try to trip him up.

The stock market, digesting Friday afternoon’s news of a breakdown in negotiations between President Obama and the House speaker, John A. Boehner, on plans to raise the federal debt limit, behaved relatively calmly today, with the Dow Jones shedding 0.7 percent to close at 12,593 points.

Should investors be more worried? Perhaps. Wall Street has trouble anticipating unprecedented events. The heuristic “Congress always comes through in the end” has pretty much always been right in the past. But one can point to a number of signs that this time is different.

In particular, there are several pieces of evidence that the Republican House of Representatives is extraordinarily conservative on fiscal issues. According to statistical systems like DW-Nominate, the median voter in the House — who is a very conservative Republican because the Republicans have a reasonably large majority and have very few moderates — may well be more conservative than at any point in the nation’s history, although comparisons become harder to make the further you go back into the past. Read more…

The Republican Speaker John A. Boehner, following the collapse of negotiations with President Obama, appears to be considering a path that would involve the House Republicans voting to raise the federal debt ceiling on their own terms, with little expectation of Democratic support.

It’s unclear what Mr. Boehner’s proposal, set to be unveiled on Monday, will entail. Some reports suggest that it might consist of a six-month increase in the debt limit, which would put the issue into play again in January or February just as the Iowa caucuses are taking place. But Mr. Boehner also hinted that his plans could include elements of the Republicans’ “cut, cap and balance” proposal, which was approved by the House last Tuesday but is stymied in the Senate.

If the House was able to approve any kind of increase to the debt limit, it would transfer focus to the White House and to the Senate. Mr. Obama has threatened to veto a short-term increase, but he would have little time left before the Treasury’s Aug. 2 deadline and perhaps little leverage. The Democratic-led Senate would probably be the bigger barrier: it could move to vote on its own proposal, leading to a potential standoff between the two chambers. Still, Mr. Boehner could put Democrats on the defensive, if not necessarily into checkmate.

Mr. Boehner, however, has a math problem. Republicans have 240 members in the House, and 217 votes are currently required to pass a bill. That means they could lose at most 23 votes, or about 10 percent of their caucus, assuming they picked up no Democratic support.

Mr. Boehner had previously indicated, however, that at least 59 Republicans would not vote to raise the debt limit under any circumstances, a number that appears to coincide with the 60 Republicans who are members of the Tea Party Caucus.

It is telling, perhaps, that the “cut, cap and balance” bill, although winning the support of all but 11 Republicans, did not raise the debt ceiling. Instead, it erected another barrier to it, requiring that a balanced budget amendment be approved by two-thirds majorities of both houses of Congress before additional borrowing authority was given to the Treasury.

In addition to Republicans who might defect for ideological reasons, some others might do so for electoral ones. Polling on the debt limit, which at earlier points had appeared to show a clear plurality of Americans against any increase, has now become highly ambiguous, with widely varying results depending on question wording. But both the debt limit increase and the spending cuts attached to it are likely to inspire mixed feelings in voters, and the roughly 75 Republicans serving in swing districts would need to consider the contours of the proposal carefully.

Thus, the sharp rhetoric in the Republican conference call Sunday, in which Mr. Boehner and other Republican leaders took a number of swipes at Mr. Obama while also urging their members to unite behind the proposal. Kevin McCarthy, the Republican House majority whip, reportedly told his colleagues that Mr. Obama was “throwing a fit because he’s worried about the election.” The idea seems to be that, if the most conservative Republicans aren’t swayed by pressure from Wall Street, or from the potential effects to the economy, perhaps the only thing that can move them is the potential to force Mr. Obama to concede defeat.

But if the vote on Mr. Boehner’s proposal fails, the risks to him are clear. It would presumably rattle markets, while making him look ineffectual. Most importantly, it would demonstrate that Republicans could not pass a bill, even through the House, without Democratic support, which would substantially reduce their leverage, as Mr. Boehner explicitly acknowledged in the conference call.

Then again, even if the Republican bill failed in the House, the counterproposal by Democratic leaders in the Senate would reportedly focus solely on spending cuts with no tax increases. Although some of the savings the Senate bill might claim to achieve would reflect an accounting treatment of the wars in Iraq and Afghanistan, that seems as much like a victory for Republicans as a defeat.

Meanwhile, although calling Mr. Obama’s bluff on his stated refusal to accept a short-term increase might qualify as a tactical victory for Republicans, its longer-term implications are ambiguous. Polls show that the public has a lukewarm view, at best, of how Mr. Obama has handled the negotiations. But the ratings for Republicans are much worse, calling into question whether they would benefit from another round of negotiations next winter under the heat lamp of the presidential primaries. There are increasing suggestions in the polling that the public could tell both Mr. Obama and the Republican Congress to find a new line of work.

Thus the real gamble that Mr. Boehner is taking: in seeking to trip up Mr. Obama, he may be putting his own majority at risk.

A new CNN poll finds that 55 percent of voters have a negative view of the Republican Party, tied for their second-highest unfavorable score since CNN began asking this question in 1992. The Republicans also achieved a 55 percent unfavorable rating in a poll conducted in April 2009, although the party’s all-time high, 57 percent, was recorded as the House of Representatives was in the process of impeaching Bill Clinton in December, 1998.

The news for Democrats is not any better. Some 49 percent of voters now hold a negative view of the party, according to the poll. Although this figure is slightly better than for Republicans, it matches the Democrats’ record high unfavorable rating of September 2010 and is part of an upward trajectory that has persisted for the past three years.

The combined unfavorable score for both parties — 104 percent — is also a record, and represents the first time that the figure has been above 100.

The G.O.P.’s unfavorable score has historically been more volatile than that of the Democrats. On previous occasions when the Republicans’ unfavorable rating spiked, however, like in 1998 and from 2006 through 2008, the Democratic Party’s declined slightly.

Since President Obama was inaugurated in 2009, however, the Democrats’ unfavorable rating have increased substantially without a corresponding drop for the Republicans. (A fine-toothed comb might find a very slight decline in the Republican unfavorable rating between 2009 and 2010, but it appears to be on the rise again now.) Thus, the combined dissatisfaction with the parties has grown steadily and is now about 20 percentage points higher than it was in the 2008 election cycle.

A credible independent bid for the presidency is always a long-shot, but might be more viable under these conditions. Or we may simply see a genuine anti-incumbent wave — a much-discussed phenomenon that has rarely occurred in practice — with significant numbers of elected officials in both parties losing office. It is not out of the question that Democrats could lose the White House but take back control of the House of Representatives.

But there are also downside cases for both the president and the Congress. Mr. Obama’s post-partisan branding, evident especially during the early phases of his 2008 campaign, has been submerged by parties that continue to become more partisan on the one hand and less popular on the other. Just 23 bills have been signed into law by the president this year, a staggeringly low number. The president has scored some tactical points during the debt limit negotiations. But both Democratic and independent voters, for somewhat differing reasons, may question whether his overall strategy has been effective.

For Republicans, meanwhile, there is the possibility that the party’s unfavorable rating, which is up 7 points since March, will continue to grow as it asserts an agenda whose popularity is questionable, especially on issues like changes to entitlement programs. Their favorable rating, 41 percent, is well below that of Democrats in 2007 or Republicans in 1995 after winning control of Congress in those years, leaving the G.O.P. without a clear mandate.

Apart from being a critical moment for the United States’ fiscal policy, the budget debates are an inflection point in the 2012 campaign. Particularly if an especially large deal is struck, like the Senate’s “Gang of Six” plan, or if negotiations break down and Congress struggles to raise the debt ceiling, it could dictate the strategies of both presidential and Congressional candidates.

Incumbent presidents fundamentally have two strategies that they might want to pursue. The first path, the Referendum Path, is usually the preferred one if the president’s approval ratings are strong and if voters are in a positive mood about the direction of the country. The strategy is no more complicated than asserting that the president has done a good job and deserves another term, the paradigm case perhaps being Ronald Reagan’s 1984 “Morning in America” campaign.

If however the White House has doubts about whether it can win a referendum, it can instead pursue the Partisan Path. It’s also pretty simple: the message is that however well the president might be doing, the alternative is worse.

The Partisan Path has been less likely to succeed because it tends to be undertaken under more difficult circumstances. But it has worked occasionally, like in 1948, when Harry Truman persuaded voters that the “Do-Nothing” Republican Congress was to blame for the country’s economic problems. The Partisan Path was also adopted successfully in 2004 by George W. Bush, although Mr. Bush’s approval ratings and the country’s economic performance were probably just strong enough for him to have won re-election on the merits. Read more…

The back-and-forth of the debt limit negotiations can be perplexing. But the facts driving the debate are quite straightforward. Any deal, or any workaround to a deal, will need to be approved by a majority of the House of Representatives. The Republicans in the House of Representatives are extremely conservative on fiscal matters and are significantly out of step with the public as a whole. Given that Democrats continue to control the Senate and the White House, and that their votes may be necessary in the House as well, this makes compromise nearly impossible.

Consider, for example, the poll that Gallup released today, which asked Americans whether they prefer tax increases or spending cuts as part of a deal. Preferences were weighted toward spending cuts:

Few Americans, however, take the view that spending cuts alone should be made in a deal, with no tax increases at all. In fact, only 26 percent of the Republican voters surveyed in Gallup’s poll took that position, along with 20 percent of voters overall.

We can also use the Gallup poll to tease out what mix of tax increases and spending cuts the public would like to see in a deal. Assume that the people who told Gallup that they wanted “mostly” cuts would prefer a 3-to-1 ratio of spending reductions to tax increases, and that those who said they wanted mostly tax increases would prefer a 3-to-1 ratio in the opposite direction. (The other choices that Gallup provided in the poll — an equal mix of tax increases and spending cuts or a deal that consisted entirely of one or the other — are straightforward to interpret.)

The average Republican voter, based on this data, wants a mix of 26 percent tax increases to 74 percent spending cuts. The average independent voter prefers a 34-to-66 mix, while the average Democratic voter wants a 46-to-54 mix:

Now consider the positions of the respective parties to the negotiation. One framework that President Obama has offered, which would reduce the debt by a reported $2 trillion, contains a mix of about 17 percent tax increases to 83 percent spending cuts. Another framework, which would aim for twice the debt reduction, has been variously reported as offering a 20-to-80 or 25-to-75 mix.

With the important caveat that the accounting on both the spending and tax sides can get tricky, this seems like an awfully good deal for Republicans. Much to the chagrin of many Democrats, the mix of spending cuts and tax increases that Mr. Obama is offering is quite close to, or perhaps even a little to the right of, what the average Republican voter wants, let alone the average American.

However, all but 7 Republicans in the House of Representatives, or 97 percent of them, have signed the pledge of Grover Norquist’s Americans for Tax Reform stating that any net tax increases are unacceptable. One might have believed this to be simply a negotiating position. But the proposal that Senate Republican leader Mitch McConnell floated yesterday, which would give up on striking a deal and instead rely on some procedural gymnastics to burden Mr. Obama with having to raise the debt ceiling, suggests otherwise. Republicans in the House really may be of the view that a deal with a 3:1 or 4:1 or 5:1 ratio of spending cuts to tax increases is worse than none at all.

If we do take the Republicans’ no-new-taxes position literally, it isn’t surprising that the negotiations have broken down. Consider that, according to the Gallup poll, Republican voters want the deal to consist of 26 percent tax increases, and Democratic voters 46 percent — a gap of 20 percentage points. If Republicans in the House insist upon zero tax increases, there is a larger ideological gap between House Republicans and Republican voters than there is between Republican voters and Democratic ones.

It would be foolish, in my view, to render any overly specific predictions about how the negotiations are likely to be resolved. But I would put greater weight on scenarios that would involve House Republicans not having to violate the pledge they signed to Mr. Norquist, including an end-around like Mr. McConnell’s — or even a failure to raise the debt ceiling at all, resulting in some combination of a debt default, a government shutdown, and a Constitutional crisis.

If a deal were to occur, it would probably have to be revenue-neutral. There is still some possibility of this because there are some tax reductions that many Democrats in Congress would support on their own merits — for example, cuts to the payroll tax, which could have a stimulative effect, in exchange for the closing of tax loopholes elsewhere.

But the House Republicans are very unlikely to capitulate on their no-tax pledge. And Democrats have little reason to capitulate either: they are on the right side of public opinion.