What’s next in federal shutdown?

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By Tom Cohen

WASHINGTON (CNN) — What now?

That’s the question roiling Washington as a partial government shutdown enters its second week while a possible U.S. default looms ahead.

Both Republicans and Democrats say they didn’t want the shutdown, and they insist they don’t want a default if they fail to raise the federal debt ceiling by October 17.

But no formal talks are scheduled, and the two sides remain so deeply mired in their respective partisan postures that no way forward or even any hint of progress is evident.

We know for sure that the partisan shouting match pitting President Barack Obama and Democrats against conservative Republicans will continue this week while moderates on both sides work behind the scenes to try to forge some kind of compromise.

Beyond that it’s anyone’s guess.

Here are possible scenarios for what could happen in coming days to get Washington and the country out of this mess.

A GOP reversal

Confrontation over the debt ceiling was always the Republican strategy to wring more deficit reduction concessions from the White House and Democrats.

Then the tea party conservative wing in the House bullied House Speaker John Boehner to adopt a stance he previously opposed by linking the concurrent need to fund the government in the fiscal year that started October 1 to their demands to dismantle Obama’s signature health care law.

“I thought the fight would be over the debt ceiling,” Boehner said Sunday on ABC. “But you know, working with my members, they decided, well, let’s do it now. And the fact is, this fight was going to come, one way or the other.”

Now, the quickest way out is for Boehner and Republicans to seek a tactical retreat on the shutdown by accepting the Senate’s short-term spending plan that contains no anti-Obamacare provisions sought by the tea party wing.

Obama and Democrats insist that the Senate version would pass the House if Boehner allowed a vote, with enough Republicans joining a unanimous Democratic caucus to overcome conservative GOP opposition.

A CNN survey shows that 17 Republicans would vote with the 200 House Democrats to provide the bare majority needed to pass the Senate plan.

However, Boehner’s stint as House speaker might not survive if he allowed that vote. There would be a conservative backlash. According to the CNN survey, not enough Republicans would join Democrats at this point in a procedural move to force Boehner to hold the vote.

That would only get the government reopened, leaving the debt ceiling question unresolved.

Long-term deal

Senate Majority Leader Harry Reid could file a proposal as soon as Tuesday to raise the debt ceiling without addressing any deficit reduction issues demanded by Republicans, a Senate Democratic leadership aide told CNN.

Sources told CNN that the Democratic plan would resolve the debt ceiling issue for at least a year, and perhaps through the 2014 congressional elections.

The move would be the first volley in what will be a torturous political struggle in coming days over the federal borrowing limit.

Most Republicans would shy away from any proposal that lacks spending cuts or other policy changes in return for the increased borrowing authority.

Democrats hope enough Republicans would vote with them to overcome a certain filibuster attempt in order to prevent what analysts warn would be potentially catastrophic economic repercussions of a government default.

If the Senate passed such a bill, pressure would increase on Boehner and House Republicans to do the same as the debt ceiling deadline approached.

However, Boehner continues to insist on concessions from Democrats before agreeing to raise the debt ceiling, while Obama continues to insist he won’t negotiate partisan policy issues in connection with guaranteeing the full faith and credit of the United States.

Short-term deal

The most likely scenario is some kind of short-term deal to allow for more negotiating.

“We don’t want any kind of default. We don’t want to have to get to that spot,” GOP Rep. James Lankford of Oklahoma told CNN on Monday. “If we have to get to a spot and say let’s do a short-term, then we have to sit down and do a short-term.”

In a possible signal to Republicans on Monday, the White House indicated it has no firm stance on the length of any debt ceiling agreement, saying it preferred a longer one but the decision was up to Congress.

While an opening may exist, CNN Chief National Correspondent John King said such an outcome would rely on conservative House Republicans trusting Obama and Democrats to negotiate in good faith on issues such as Obamacare and tax reform. Right now, King noted, “that trust simply doesn’t exist in Washington.”

Without an agreement, the current climate of increasingly bitter and accusatory rhetoric will only worsen as the debt ceiling deadline gets closer. Pressure will mount from the business community and an increasingly fed-up American public to come up with a way to avoid default and reopen the government.

No deal

Failure to raise the debt ceiling would leave the govenrment unable to borrow more money to pay debts it already has accrued, CNNMoney’s Jeanne Sahadi reported Monday.

Instead, Sahadi’s report said, lawmakers would have four options to choose from that would have to be implemented right away — cut government spending for the military and other discretionary programs by up to 33% every month; cut mandatory spending such as entitlement programs by 16% every month, and raise taxes by up to 12% every month.

The outcry over Washington’s political dysfunction would escalate at home and abroad, possibly motivating moderates on both sides to meet in the middle.

In the end, it will come down to political optics as much as the actual substance of a deal. House Republicans fearing a tea party primary challenge next year need some kind of political cover to raise the debt ceiling, and Obama opposes tying the issue to partisan policy issues.

CNNMoney’s Jeanne Sahadi and CNN’s Ted Barrett and Dana Bash contributed to this report.

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