Thanks to the lack of meaningful progress on appropriations or a budgetary “grand bargain” so far this year, it’s become customary to assume that in the short period between the end of the August recess and the beginning of Fiscal Year 2014 on October 1, we’ll see a titanic “fiscal fight” revolving around Republican threats to default on the national debt or shut down the federal government.
In his forecast of what will happen in September, one of our best analysts of fiscal politics, Stan Collender, runs through the likely scenarios, and though he agrees we’ll experience “budget bedlam” this fall, he foresees less of an apocalyptic collision than a sort of slow-motion riot which will actually culminate early next year, in part because the next round of “sequestration” won’t actually occur until after Congress adjourns for the year:
I’m expecting the federal budget bedlam to last through the fall and into next winter.
A short-term continuing resolution negotiated very close to October 1 that lasts until the middle of November, that is, until the extraordinary measures run out, is the most likely tactic, and even that’s only got about a 60 percent chance of happening.
It may well be that Boehner needs to show his tea partiers that he is willing to shut the government for them, and the tea partiers may need to show their voters that they were willing to let it happen.
That first short-term CR then most likely will be followed by a combination second continuing resolution and debt ceiling extension that lasts until the middle of January so that all three fiscal deadlines — government funding, debt limit and sequester — come together in a new fiscal cliff that roils markets and politics yet again.
It’s obvious from Stan’s analysis that we could see a combination of disruptive scenarios, with a brief government shutdown in October being followed by a short-term reprieve, and then a new crisis in January. With the odds of a “grand bargain” shrinking towards nothingness (Collender calls it a “fantasy”), the scary thing is that the degree of dysfunction will depend almost entirely on House Republicans and their very shaky leadership.
