It is very difficult to see a deal not being struck between Republicans and Democrats over the US debt.

The consequences of failure to reach agreement (the US will default on its financial obligations on Tuesday if the debt ceiling is not raised) are just too great for both sides and the country. Public spending would apparently come to a halt, the US would find the dollar and its credit rating status under great pressure on the financial markets, and interest rates in the US would almost certainly rise.

Set against this scenario (sometimes referred by negotiation academics as a WATNA, or Worst Alternative to a Negotiated Agreement) almost any kind of deal would be better. So, expect some kind of deal to be cobbled together. It may be a fudge, it may be short-term, it may not do enough to satisfy the financial markets that the US has the answer to its crippling debt burden, but it will buy the US some time. As the successive fudged deals on the Euro have shown, that is a result in itself. Compared to the chaos of no deal being done that will ultimately seem a more attractive option to both the Republicans and Democrats.