Major Financial Institution Gives Its Prediction on the Looming Government Shutdown

At this point, we should expect the government to shut down on October 1. Congress has until September 30 to pass a spending measure to keep the lights on in the Capitol Building, but Speaker Kevin McCarthy said he won’t bring up the House’s plan to present a shutdown until tomorrow. The Senate has a plan to pass a continuing resolution, though it’s unlikely McCarthy will bring that to the floor for a vote. 

He also can’t procure Democratic votes unless he wants to risk a leadership scuffle. Also, there’s no incentive for Democrats to help Republicans right now. Goldman Sachs predicts the chances of a shutdown at 90 percent. It might as well be 100 at this point, to be honest (via NY Post): 

Wall Street is bracing for the likelihood of lengthy government shutdown — with one prominent analyst placing the odds at 90% that Republicans and Democrats won’t reach a deal before Saturday’s deadline. 

Goldman Sachs’ chief economist Jan Hatzius said in a Wednesday note obtained by The Post: “A government shutdown this year has looked likely for several months, and we now think the odds have risen to 90%.” 

Hatzius, who heads the bank’s global investment research, predicted the shutdown would likely last two to three weeks 

“If the government shuts down on Oct. 1, a quick reopening looks unlikely as political positions become more deeply entrenched,” Hatzius warned in his note, “as neither side seems likely to make immediate concessions.” 

Congress must pass legislation to keep funding the government that Democratic President Joe Biden can sign into law by midnight Saturday to avoid furloughs of hundreds of thousands of federal workers and a halt to a wide range of services. 

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The interesting factor should things be closed for a bit on the Hill is that voters would place blame on Democrats for the shutdown, at least initially. That’s why Democrats have aggressively sold the ‘Republican shutdown’ talking point. This fight requires near-perfection regarding messaging, and the GOP has yet to prove that, especially with the cast of characters likely to be the faces of the party in a shutdown battle.