The debt ceiling battle is coming
Goldman Sachs thinks there is a 50% chance of a government shutdown as the US hits the debt ceiling in September.
"In the near term, we believe there is a 50% chance of a brief government shutdown, as the president seeks to solidify support among his base by embracing more controversial positions, despite needing Democratic support to pass spending legislation," Goldman economists wrote today. "That said, we expect that the debt limit, which needs to be raised around the same time, will prevent a longer shutdown from occurring."
In July, Treasury Secretary Steve Mnuchin said the debt limit will be hit by September 29.
It's going to be tough because a deal will need support from at least 8 Democrats in the Senate. In addition, there are at least a handful of Republicans in both houses that are dead against raising the debt ceiling.
Trump could also get involved because he wants Congress to fund a border wall, something few Democrats are willing to do.
Ultimately it will get done, but how smoothly the process goes will be a dead giveaway on whether tax reform and the 2018 White House agenda has any hope.
