Gang of Six, RIP

The Gang of Six, the latest in a series of well-meaning, self-starting, bipartisan problem solvers, was probably doomed from the start. Its three Republican Senators were always going to demand far more in spending cuts and far less in taxes over the next 10 years than its three Democrats would have dreamed of accepting. Plus, the Gang was working without a net: neither Mitch McConnell nor Harry Reid--the top Republican and Democrat in the Senate--gave it the time of day. Even Barack Obama convened his own bipartisan group to find a way out of the budget impasse. The more the Gang met, the less it seemed to matter.

And so when the budget-slashing Oklahoman Tom Coburn walked out because, he said, his colleagues were getting nowhere and thinking too small, it finally dawned on Washington that the nation is heading for a genuine--and genuinely terrifying--credit crisis. The clock is ticking: without congressional action, the U.S. Treasury loses its legal borrowing capacity on Aug. 8. Should that occur, most economists agree, economic Armageddon is possible. "We can't bridge the gap between what actually needs to happen," Coburn explained, "and what people will allow to happen. I am discouraged."

Leaders of both parties insist they will avoid default. But they remain light-years apart: Republicans are demanding $2 trillion in cuts over the next decade in exchange for their votes to pass a hike in the debt ceiling. Democrats have offered $200 billion in return. Congress has about a month to work out a deal. Obama will reconvene his handpicked negotiators in late May, though those talks will focus on a smaller solution.

In the meantime, Treasury Department officials took what they called a series of extraordinary measures to keep borrowing below the $14.3 trillion level set by Congress, including a suspension of federal support for a number of state and local bond measures. Treasury officials say they have other devices and mechanisms they can deploy to avoid the inevitable through late July. After that, they warn, the checks will start to bounce.