With the House pushing its own new debt ceiling plan, the odds of a delay in getting a debt ceiling deal have gone up.
Here’s Goldman on why things could now go beyond Oct. 17:
A deal could still be enacted by October 17, but there are reasons to think it could go a little longer.
First, although Congress has taken the October 17 deadline surprisingly seriously, the Treasury will still have funds after that date, and Congress knows this.
Second, if the House amends the Senate bill or passes its own instead, this will delay enactment.
Third, the Senate could present a procedural obstacle if even one member objects, since consideration can take as long as five days in that chamber.
Fourth, if the House is eventually forced to take the Senate plan for a lack of viable alternative, Republican leaders are unlikely to want to hold that vote until the deadline, if not later.
There is still a chance Congress will manage to get the debt limit raised by October 17, but a resolution later this week or even this coming weekend also appears possible.
Goldman obviously still thinks a deal gets done, but going beyond Oct. 17 raises new risks.
Yes, we don’t have a debt default, as that just represents the date at which the Treasury’s borrowing authority runs out.
But if we get to Oct. 17 and there’s no instant crisis, suddenly impetus to get a deal might fade. Maybe.
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