President Obama and the House of Representatives will ultimately maneuver towards a resolution of the government shutdown, but only after the stock market begins to take a serious tumble on fears that the debt ceiling will not be raised later this month. It really is just that simple.
Here are some other realities related to the shutdown.
First, most Americans just don't care about it, at least not yet. Polls show that many have become far more anti-federal government in recent years and really don't mind if there is a partial shutdown. Ironically, their belief that government just does not help them was on full display on the very first day of what some termed a "government slim down" when the new website, designed to navigate people to their new "affordable care" under President Obama's healthcare law, failed to work.
Second, there is the question of whether the Republicans will be politically damaged as a result of their decision to force the issue of a shutdown. I was comparing some notes with my friend Newt Gingrich and, although many pundits suggest otherwise, the fact is that after Gingrich and fellow Republicans shut the government down (twice in a short period of time) nearly eighteen years ago, Republicans retained their majority in the House of Representatives and picked up two seats in the U.S. Senate. Yes, Bob Dole lost to Bill Clinton, but Dole was a weak candidate to say the least.
As for that third point: A tumble in the stock market. That is a relatively new wrinkle in the story's history of government shutdowns. In the past, partial closures of government have presented little reaction from the business community or investors. And, true to form, this shutdown received barely a yawn from Wall Street.
But the 2008 refusal of the House of Representatives to approve the first version of Tarp, and the ensuing market meltdown that occurred, caused politicians to begin to keep a wary eye on the stock market, knowing that they can push it just so far.
As of midweek of the shutdown, investors seemed cautiously optimistic. And already Speaker Boehner and Majority Leader Harry Reid were said to be considering a "clean" continuing resolution with the "promise" of a more detailed look at the budget in the near future.
But Boehner will likely have a hard time selling what, in essence, would be quick retreat on the part of his Republican majority, unless he first secures more meaningful concessions from the Democrats. Or unless an artificial panic is created on Wall Street.
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