3 Things That Could Happen Now That The GOP Has Offered A 3-Month Debt Ceiling Hike
Some of the scenarios are not pretty:
1. Dems decide to make their stand here and refuse to pass anything that is short term or tied to the requirement for the Senate to pass a budget. If this happens, things get ugly fast. You get the same war all over again and Republicans will likely feel more righteous about their resistance given the Dems unwillingness to take on what (the GOP sees as) very moderate reforms.
2. Dems agree to pass a budget and the three month extension kick the debt ceiling to around June. That means the hard line anti-spending guys can make their stand on both the CR in March and all the FY14 appropriations bills between now and June. That should function as a great pressure release valve for leadership to force through what will likely be a less-than-palatable long-term debt ceiling extension.
3. We get a short term, but without the budget reform or the Senate never actually passes a budget. CR becomes extra contentious, approps bills turn into the same type of go around as HR 1 and then the debt ceiling arrives with a unified, very angry right wing of the party. Back to things getting ugly, only worse.
He concludes:
At the end of the day, I can never conceive of an actual default. But an eleventh hour deal (who knows, maybe up to and including a deal at 9:29 on the morning the debt payment is due) is not hard to imagine under options 1 and 3 above.
For more on the GOP's offer, and analysts' reaction, see here >