Senator Henry Reid reported that this weekend’s negotiations on the debt deal broke down again due to the Republicans’ insistence on a short term deal. The Democratic deal aims to compromise, proposing to raise the debt celing, cut $2.7 trillion over the next 10 years, but no tax increases. The Republicans counter with a 2-step plan, which would cut $1.2 trillion and raise the debt ceiling now, and then have a bipartisan committee to create another $1.8 trillion in cuts. White House Chief of Staff Bill Daley states that rating agencies have lost faith in our political system’s ability to deal with the deficit in a serious way, and calls the short-term deals a “gimmick” that will bring us back to this same problem in a matter of months. The Morning Joe team discusses the effects of the breakdown in negotiations on world markets, and whether President Obama should have been more proactive in the debt deal from the beginning.

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