When the Senate Republicans killed the auto bailout last night, Mitch McConnell looked like a genius (NBC's Mark Murry: "it’s amazing how McConnell was able to run circles around Reid.") But if the White House follows through on its suggestion that it might use TARP funds to stave off bankruptcy, the GOP maneuver will have been a total disaster.

Remember, the Republicans have leverage because they still have 49 Senate seats and the auto companies need their loans right away. And, indeed, Republicans have used their leverage to force wage concessions and not force the auto companies to start producing low-emissions vehicles. But if they've overplayed their hand to the point where the White House floats a loan until January, then the GOP's leverage will nearly collapse. When the new Senate and White House convene, the Democrats will cut a much better deal for themselves, with fewer or no wage cuts for workers and tougher environmental standards. Indeed, it would be such a disaster for Republcians I can't believe they won't return to the bargaining table pretty quickly.

--Jonathan Chait