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3 Potential Outcomes to Fiscal Stalemate: how and when will it end?

According to the so-called "conventional wisdom" in Washington, the current fiscal impasse should end any day now.

This is especially true as Thursday’s deadline fast approaches for dodging a disastrous debt default. Moreover, the American people’s anger continues to grow over the government shutdown.

But what is considered to be Washington wisdom these days may be anything but conventional. Thus it’s anyone’s guess, at this point, when and how the current crisis will end.

Some political commentators are predicting a mere 50-50 chance of a deal being struck this week. In fact, certain members of the House reportedly continue to question not only how soon government should reopen, but also the specific timing of when a debt default will actually occur.

Following are three widely discussed outcomes which may, or may not, take place:

1) Clean Compromise: This would entail both reopening the government and increasing the debt limit simultaneously, albeit temporarily, with no strings attached.

However, even if the Senate leadership and the President agree, will a recalcitrant House go along with it -- particularly without any concessions on the Affordable Care Act or otherwise?

Will the Speaker allow a simple up or down vote on a “clean” bill, or block it to appease extremist elements within his own party?

2) Mixed Measure: This would mean passing a debt limit increase without reopening the government.

Such an outcome would avoid a devastating debt default while maintaining negotiating leverage by Republicans for a larger deal down the road. A subsequent deal could address major entitlement reforms, further deficit/debt reduction and/or tweaks to the Affordable Care Act – such as delaying the tax on medical devices which helps fund the landmark health care law (even though the White House and Democrats insist that any change to "Obamacare" is non negotiable).

3) Nuclear Option: This outcome, the result of Congressional intransigence, would mean no deal is reached this week to either reopen the government or raise the debt ceiling.

Even if the President and Senate leaders agree to a short-term deal, the House might continue to hold out in the hope of extracting some face-saving concessions and/or funding government agencies piecemeal.

This all raises several questions on everyone’s mind:

  • When and how will this crisis end?
  • Which of the three possible outcomes outlined above do YOU think is the most or least likely to occur? Why, or why not?
  • Is there another outcome you envision?
  • Is there a date certain by which furloughed feds will return to work and get paid -- what's your prediction?

Please share your thoughts, insights and analysis in the comment section.

DBG

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* All views and opinions are those of the author only.

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Profile Photo Dr. Phuong Le Callaway, PhD

Hi David,
I have asked the same question myself. The President may have to negotiate harder or accept what has been given from the Congress to end the current shut down. It is up to Senator Reid and the President now to move the ball forward. I do think this fiscal stalemate may end by October 16! It is just my hope. I do think everyone loves America but just happens to have a different view for America.

In conclusion, it is entirely up to the President how he wants to run the executive branch of government. He can choose to continue to shut down or to end the shut down. I am not in the position to advise Congress, the Senate and the President, but I hope that they will work with each other with an open mind and with the long term vision for America. America must remain strong. Foreign countries are looking at this shut down and wonder how our President can lead the foreign affairs and support sincere negotiations for peace while he cannot lead at home. I tend to blame on our President for the shut down as he leads the executive branch of the Federal government. These are my personal views free of political influences.

Profile Photo David B. Grinberg

Thanks for your sharing your insights, Dr. Callaway. You present an interesting perspective on this unfortunate situation.

Since the ball is in the Senate's court, the leadership really needs to make sure that whatever is passed in the upper chamber will also pass in the House, so the President may then sign it. We can't afford another endless ping-pong match between the two chambers of Congress, while the American people and economy suffer waiting.

I also think it will be unfortunate if only a short-term measure is approved. This would mean fighting this battle all over again in just a few months. Congress really needs to do its job so we can do ours.

Again, great hearing from you, Dr. Callaway!

Profile Photo Henry Brown

Looks like that within the next day or so enough face saving will go on that things will come close to returning to NORMAL,

suspect that it what 2/3 of the players in this rather dumb "soap opera" will figure out how to concede some minor points to the losers so that they don't appear to be loosing as much.

As several media outlets, across a rather wide range of political leanings, have indicated (And I agree with them) is this kicking the can down the road does NOT solve any problem other than preventing a total disaster from overtaking our government/economy within days

Unfortunately I don't see any way out of this mess....

Yes most of the country may in fact blame a certain sector of a paticular political group. I live in a very "red" state, and a extreme(tea party) driven congressional district. This congressman has well over 70 percent total undying support for anything that is anti-obama (based on the 10/90 rule) IMO he would risk losing his career position by supporting a reasonable LONG term solution to this problem...

Profile Photo David B. Grinberg

Thanks very much for your keen observations, Henry.

Unfortunately, at the current time it appears that the House is still horsing around as our nation draws closer to the dreaded debt default. Hopefully, the Speaker has able to get his caucus under control and work cooperatively with the Senate to end this pathetic and embarrassing stalemate.

As the President has said, one minority faction, of one party, in one chamber of Congress should not be able to usurp the will of the American people by holding the federal government and the economy hostage -- not to mention the potential for upsetting global markets.

This political nightmare should have ended by now. But thanks to the House leadership, this bad dream continues -- giving democratic governance in America a bad name. The entire situation is nothing short of outrageous and unacceptable.

It's time to clean house (pun intended).