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WE NEVER UNDERSTOOD the Washington practice of setting deadlines, because they usually slip and make politicians look inept. But here we go again, with three huge issues facing deadlines that prompted frantic negotiations this week. Here are the three —
1. Government shutdown: This deadline is clear — One second past midnight in the morning of Oct. 1, when the government could shut down if there’s no spending deal for the new fiscal year. The risk to investor and consumer confidence is huge, so we think a “kick the can” extension probably will pass at the last moment, keeping the government open.
The sense we got yesterday was that Democrats know they could get much of the blame if there’s a shutdown. Senate Minority Leader Mitch McConnell will not relent. The Democrats control both houses (barely) and this could be a rare shutdown crisis that hurts them more than Republicans.
2. Debt ceiling: This deadline is vague because it involves Treasury receipts. We think a default could occur between Oct. 31 and Nov. 10 if there’s no extension of the debt ceiling. That’s more than a month away — plenty of time for more posturing and fear-mongering before the Democrats cave on this issue as well.
3. Infrastructure taxes and spending: This is a total mess, with Democrats fighting among themselves, threatening to blow up the entire process. Biden met with leading moderates and progressives yesterday, with one clear take-away: he’s willing to accept a social spending bill that costs less than $3.5 trillion. He essentially said “make me an offer.”
A Sept. 27 House deadline to pass both infrastructure bills probably will slip. We still think there’s plenty of bipartisan support for a $1 trillion infrastructure bill for highways, bridges, wi-fi, clean water, etc.
But the second bill will get a huge reduction — perhaps so huge that House progressives will walk away from the entire process. But that might not occur until winter; there’s no rigid deadline on this issue, which could bounce back-and-forth between the House and Senate for weeks.
PRESIDENT BIDEN IS REELING: His poll approval numbers have plunged into Donald Trump territory — into the low-40s in some polls. And Biden faces other issues, headed by the immigration crisis, which has horrified Republicans, Democrats and the general public.
HOW BIDEN HANDLES IMMIGRATION, crime, inflation and the three fiscal issues we listed above will determine the trajectory of his presidency heading into 2022 and the midterm elections. For now, the elections are shaping up as a rebuke to him and the Democrats.
Related: Key to Debt Ceiling Extension: Make the Markets Worried
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