There is one, easy reason to assume that the government shutdown and need to raise the debt ceiling won't be resolved until the last possible minute, if then. Leaders of the Republican party haven't acted rationally on either issue, and you can't reason with or make predictions about an irrational actor.
At the outset, we'll admit that there is some method to the madness of the shutdown, particularly now that we're neck-deep. Since we're barreling down this hill, it's politically difficult for House Speaker John Boehner and his partners to suddenly throw on the brakes and say, "we were wrong." As we noted last week, the menu of acceptable points of resolution for all sides is extensive. To halt the shutdown, Boehner needs to be able to point to something he got, whatever it might be. Without that — and barring an upwelling of sentiment against his party — there's not much incentive to change course.
But looming halfway down the hill is the massive stone wall of the debt ceiling. On October 17, the Department of the Treasury forecasts that it will no longer be able to borrow the money it needs to pay the country's bills — in short, meaning that the country goes into default. As Jonathan Chait articulates at New York, the Obama administration essentially can't compromise on whether or not the debt ceiling is raised; if the country doesn't do so, the effects could be "catastrophic," in the opinion of Goldman Sachs. Since the downside to the economy is so large, the administration can't allow it to be used as a point of negotiation. If it becomes a point of leverage now, Chait points out, it will be a point of leverage forever, regardless of the Congress or president — all but assuring some future negotiations will fail and trigger a default.
Here's where the irrationality comes in. Over the weekend, as we reported, Boehner publicly stepped back from reports that he would not allow a default on the debt ceiling. In an interview with ABC, Boehner suggested that the fault was with the president. "The nation’s credit is at risk because of the administration’s refusal to sit down and have a conversation," he told George Stephanopoulos. That itself is a misleading argument, given that, as chair of the Senate Budget Committee Sen. Patty Murray pointed out to the National Review, Republicans — notably, Sen. Ted Cruz of Texas — repeatedly blocked a push for such a conference in the past.
CNBC's John Harwood, who interviewed the president last week on the threat posed by not raising the debt ceiling, offered this assessment on Twitter.
Current House R offer to Obama: we'll reopen govt, avoid default if you enter talks we ourselves have been unwilling to enter until now. 1/3— John Harwood (@JohnJHarwood) October 7, 2013
In those talks you compromise by taking our position (Med/SocSec cuts w/no tax hikes), which Americans who just re-elected you oppose 2/3— John Harwood (@JohnJHarwood) October 7, 2013
Nor is Boehner's caucus united in a push to raise the debt ceiling. As we noted on Saturday, Rep. Ted Yoho of Florida suggested that allowing default would "bring stability to the world markets" through some unspecified mechanism. (Yoho's pre-Congress job was veterinary medicine, not finance.)
One assumes that Boehner's public willingness to ignore the debt ceiling is a negotiating tactic. But many also assumed that his willingness to flirt with a shutdown was similarly meant to give his party an edge in a negotiation. (Which, for the record, the president and Senate Majority Leader Harry Reid have acquiesced to — one the debt ceiling is raised and a resolution to fund the government has been approved.) In September, Republican House Majority Leader Eric Cantor argued that passing the bill to fund the government at existing levels (the so-called continuing resolution for funding, or CR) was itself a victory for Republicans. "In signing a CR at sequester levels," Cantor wrote, "the President would be endorsing a level of spending that wipes away all the increases he and Congressional Democrats made while they were in charge and returns us to a pre-2008 level of discretionary spending." But when the time to pass that measure arrived at the end of the month, Boehner and Cantor preferred to let the government shut down, in an effort to gain an advantage over the administration and their opponents in the Senate. It was a strategy that took nearly everyone by surprise, including at least one colleague, who told the Washington Examiner's Byron York that the party had "stumbled into" a shutdown debate that The New York Times suggests Boehner doesn't know how to resolve.
Which is why there's no reason to think that this shutdown will end anytime soon. The House Republican leadership either finds some morsel of victory substantial enough to provide cover for resolving the dispute (which is what a professional hostage negotiator suggests the Democrats help provide), or, in the evocative words of Rep. Jim McDermott of Washington, the Republicans "figure out they fuckin’ lost."
The hope has been and continues to be that the looming debt ceiling breach — and the panic that will mount as it approaches — will help spur one of those two conclusions. But, then, that's the rational way of looking at it.
We'll definitely find a solution, because NO ONE wants s̶e̶q̶u̶e̶s̶t̶r̶a̶t̶i̶o̶n̶ a̶ ̶g̶o̶v̶e̶r̶n̶m̶e̶n̶t̶ ̶s̶h̶u̶t̶d̶o̶w̶n̶ default.— David Waldman (@KagroX) October 6, 2013