Treasury Secretary Jack Lew, meanwhile, toured the Sunday shows to warn of the damage that would occur should Congress fail to raise the $16.7 trillion debt limit by Oct. 17th.
Treasury estimates it would have $30 billion cash on hand as of that date And depending on how much money comes in, Treasury could conceivably keep making all payments through the end of the month. But no one—not even Treasury—knows when after Oct. 17th the federal government might have to start "prioritizing" payments to ensure no actual bond defaults.
(Read more: A tweet underscores why Washington is stuck)
Treasury officials say they are not even sure they can make their systems, designed to make all or no payments, prioritize. It's totally uncharted waters and markets may react sharply close to Oct. 17th.
That kind of market movement—and resulting political panic—may be the only thing that forces some kind of agreement that re-opens the government and raises the debt ceiling. Should we get close to that point, many Democrats think the GOP will simply cave and accept a clean CR and debt limit hike.
That still seems very unlikely.
Instead, the more probable resolution is a deal, perhaps one currently being floated by Sen. Rob Portman,, R-Ohio, President George W. Bush's budget director, that would lock in sequester-level spending favored by the GOP along with some Medicare andSocial Security fixes previously offered by President Obama. It's not clear if Democrats would demand new revenue through loophole closures to accept this kind of deal, though they probably would. That's a tough, though not impossible sell, for Boehner, particularly if he can squeeze out one Obamacare change, possibly repeal of the medical device tax.