Nancy Pelosi hints that the likeliest debt deal will indeed be a smaller bill that reduces spending without significantly cutting entitlements or raising taxes: 

“We’re willing to bite the bullet and make serious cuts in discretionary spending,” Pelosi told a small group of reporters and bloggers. “That could go to a trillion dollars or more. And the interest saved on that can take us to like a trillion and a half dollars saved.”

“We could go even further with non-health mandatories, could take us almost to two trillion. We could use the offshore — the Overseas Contingency [the wars in Iraq and Afghanistan] — could take us to two-and-a-half trillion dollars. Which is the dollar-for-dollar for the lifting the debt ceiling. I don’t think we have to have dollar-for-dollar, but for those who think they do, there’s a path to get there.”