Every now and then something unexpected transforms the political environment. For George W. Bush it was the September 11 terrorist attacks. For Barack Obama it took place even before he was sworn in. And it came from an unlikely quarter.

Last week’s report by the normally sub-radar Congressional Budget Office projecting a $1,200bn deficit for 2009 and $1,000bn fiscal deficits as far as the eye can see, sent shock waves through Washington, which look set to redefine what is possible for most of Mr Obama’s first term.