New Calendar Old Habits

The calendar has flipped, the fireworks have faded, and most resolutions have already been broken.  A new year can bring a sense of renewal, or at least the illusion of a fresh start.  But in the world of federal policy, the first few days of a new year can give way to what was. Congress, true to form, has returned to the Beltway, operating just like they did last year: a new government funding deadline is on the immediate horizon.

Budget brinkmanship is becoming increasingly familiar.  “Regular order” almost feels quaint, like a term found in a dusty civics book sitting on a thrift store shelf.  Once again, we’ll likely read about stopgap continuing resolutions and efforts to get things operating smoothly. Fortunately, markets seem to have grown used to these types of procedures.  At least last year’s 43-day shutdown ended with a higher U.S. stock market than it started with.  It cannot be known, however, if this will be repeated.

Atlas has no unique information on whether or not the end of this month will be the start of the next shutdown, but there are prediction markets (aka betting markets) putting out specific odds of it happening.  As of this writing, they seem to be somewhere in the vicinity of 25-30%.  This is not a zero chance of a shutdown but still seems to be a far cry from a foregone conclusion. Congress has work to do; according to this article from ctmirror.com, they have nine spending bills which need to be passed in order to keep the government funded through September or pass another continuing resolution to kick the can down the road a bit further.

2026 is a young year, but the habits of Congress are ancient. Polite champagne toasts are in the rearview mirror, but mid-term elections are on the horizon. Those wanting to stay in office will likely see the November ballot box as motivation to get into gear.  Dysfunction can only be disguised as deliberation for so long.