Across the tape a little while ago, from Reuters:
NO BUDGET AGREEMENT REACHED AT WHITE HOUSE MEETING, REPUBLICAN HOUSE SPEAKER JOHN BOEHNER’S OFFICE SAYS
FT Alphaville is struggling to say anything new about the consequences of a potential federal government shutdown — we’ve already covered the economics (twice), the potential impact on the Treasury market and some of the political ramifications.
All that’s left is to wait for the outcome. To that end, you can click here to see the latest from Intrade (HT Marginal Revolution), which puts the chances of a shutdown before July 1 at 55 per cent, up from 39 per cent about an hour ago and 20 per cent just two days ago.
No need to to leap to any conclusions, as these prediction markets run on very thin volume and this is a bet not limited to just the negotiations surrounding the 2011 Fiscal Year budget. But this gives a sense of how quickly expectations have changed from “possible but still very doubtful” to “damn, it could really happen” to “approaching time to panic”.
Before today’s White House meeting, The Washington Post wrote that time is running extremely short:
There is general agreement that the two sides must work out a deal by Tuesday night if it is to work its way through both chambers and reach President Obama’s desk before the government runs out of money Friday.
This sounded completely nuts to us, as we would expect negotiators to be working into the wee hours every night this week. (Then again, this is Washington, so “completely nuts” disqualifies nothing.) But Stan Collender of Capital Gains & Games helpfully explains that “the House this year imposed a rule on itself that requires all legislation to be available for three days before voting takes place.”
Great timing for said rule.
Collender adds that we’re not just yet as out of time as everyone thinks:
But what few are forgetting is that a federal shutdown over the weekend would affect very few people. While there would be headlines and would lead the news, it would barely be noticed or cause many political ripples because most of the government offices and facilities that would be affected by a shutdown would be closed anyway.
As a result, although the people heading to a national park or the Smithsonian might be inconvenienced over the weekend, the real deadline for getting an agreement signed is next Monday morning. That effectively gives House Republicans, Senate Democrats, and the White House until COB Thursday rather than tomorrow to get their act together.
And it actually could be just a little bit longer. Chances are that federal workers will be told to report to work next Monday as usual if an agreement had been reached but the legislation isn’t expected to be signed until later that day. That could mean that the House doesn’t really need to have the CR drafted until Friday.
Cold comfort, though we’re nearing the stage where we’ll take whatever we can get.
Related links:
Shutdown averted, again, perhaps, or maybe not – FT Alphaville
Shutdown averted, for now – FT Alphaville