As part of the deal being discussed to raise the debt ceiling, leaders on Capitol Hill are forming an especially powerful congressional committee that would be charged with drawing up a new “grand bargain,” possibly by the end of the year.

Key elements for a big deal remain in place. Obama has been clear that he wants one and has started making the case to skeptical factions of his own party that getting the nation’s fiscal house in order is in their best interest. House Speaker John A. Boehner (R-Ohio) also remains committed to an ambitious plan, having told his troops that he didn’t become speaker to do small things. And, perhaps most critically, the markets are demanding it. The credit rating agency Standard & Poor’s says Washington must agree to reduce the debt by $4 trillion over 10 years to avert a downgrade. …WaPo

Wall Street and Obama are on the same page, and Boehner really wants to pull this off. The makeup of the “especially powerful congressional committee” when the House is composed of a slight majority of nuts along with a bunch of very hungry squirrels could be interesting. Which senators will be involved? Will Eric Cantor be sidelined? And won’t it be same-old, same-old? After all, the choices have remained the same.

The committee would resemble the fiscal commission chaired last year by Alan Simpson and Erskine Bowles, minus presidential appointees. But its path would be easier: The panel will require only a simple majority to report a plan to Congress, it would be protected from Senate filibuster and it would not be subject to amendment, similar to the system used for closing military bases.

The same lawmakers appointed to the fiscal commission may not be appointed to the new committee. Aides said Reid, for one, is likely to make different choices. But Sen. Richard J. Durbin (D-Ill.) said there is little doubt where the committee will start.

“We all keep coming back to the same basic parameters. The Bowles-Simpson plan really laid out how you reach $4 trillion. And there aren’t a lot of things they didn’t consider,” Durbin said. “There are only so many moving parts here.”

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Earlier today, The Hill posted a report that there are problems with the McConnell “debt fallback plan.”

Liberal and centrist budget experts are joining conservatives in raising red flags about the debt-ceiling plan that is being hashed out by Senate leaders as a last-ditch option for avoiding a national default.

Despite their reservations, some experts see an upside if a new binding debt commission can be attached to the package.

Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) have been negotiating a modified fallback plan that could allow President Obama to raise the debt ceiling three times unless Congress disapproves.

The idea, first floated by McConnell, would have the effect of pinning the blame for the increasing debt on Obama’s shoulders.

One possible change under discussion is to attach a package of spending cuts of about $1.7 trillion to please conservatives in the House. Another idea is to establish a special bipartisan lawmaker committee to craft a deficit-reduction package that would later come straight to the floor for a vote …

Cross posted from the blog Prairie Weather.