In the end, the leaders of the two chambers are likely to put some sort of amalgam of all these plans to a vote, and can probably wring enough votes out of their underlings to secure passage. Mr Obama, for his part, would presumably sign any bill that had won the approval of the Democrats in the Senate. The alternative, most observers assume, is simply too horrible: payments withheld from pensioners, soldiers, government contractors and the like, higher interest rates, chaos in the financial markets and the harm to an already sickly economy that all this would bring.
So far the markets have shown only muted signs of disquiet. Stock prices have continued their slow but steady downward drift of the past week. The dollar slipped against some safer currencies, especially the Swiss franc. The price of insuring against an American default rose. And in auctions of government debt this week, the cost the American government pays to borrow ticked up ever so slightly. But these mild movements seem predicated on the assumption that Congress will pull a rabbit out of a hat within the next few days. The longer the rabbit takes to appear, however, the less quiescent the markets will become. And even if the debt ceiling is raised, ratings agencies are still threatening to downgrade Americas debtbecause the long-term fiscal outlook is so grim.
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