(Yahoo!Finance) - House lawmakers begin to flood out of Washington Thursday afternoon for a scheduled 13-day recess. When they return, representatives will have just a few days to avert another potential government shutdown.
Despite the looming deadlines, the prospect of a government stoppage has not yet become a front-burner issue for Washington or Wall Street.
"I am amazed at how little attention the markets and the press have devoted to this looming crisis (well, crisis may be too strong a description)," wrote Greg Valliere, the chief US policy strategist at AGF Investments, in a note to Yahoo Finance Thursday morning.
That could change by the end of the month, with a partial shutdown possible at midnight on March 1 if no deal is reached. A full shutdown would then follow a week later.
House Speaker Mike Johnson said he was focused this week on the work of averting a shutdown but has not yet offered a detailed plan or overseen concrete progress on the process of funding the government.
On Wednesday, Johnson and other House GOP leaders held forth before reporters for nearly 30 minutes in a press conference that focused on immigration and President Joe Biden's mental acuity without addressing the issue.
"What about the government shutdown, sir? Will you get those spending bills done in time?" a reporter asked as Johnson was leaving. But the speaker didn't respond.
Seemingly no progress was made Thursday, either. By the afternoon, lawmakers were headed to the airports after a final round of voting around unrelated issues like US energy production and China.
Economic impacts that 'investors should care about'
Washington has of course been in this position multiple times in recent months, with lawmakers waiting until the last minute but ultimately delaying shutdowns that had been on the docket last October and November as well as this January.
But the economic consequences could be notable if Congress wades into yet another cycle of brinkmanship. Any gridlock would surely be yet another strike for credit rating agencies who have again and again cited dysfunction as a driving reason for their dim views of US creditworthiness.
"That's a big deal and investors should care about that," said American Action Forum president Doug Holtz-Eakin in a January appearance on Yahoo Finance of possible further downgrades.
And the direct economic effects could be felt if there is no deal and the chances of an extended shutdown grow. The longest government shutdown in history lasted 34 days and took about $3 billion permanently out of the US economy, according to a Congressional Budget Office study of that 2019 standoff.
House lawmakers are also heading home with a variety of other complex issues still on the table that could play into the coming spending negotiations. The Democratic-led Senate recently passed a $95 billion bill to aid Ukraine, Israel, and the Indo-Pacific. Johnson has indicated his opposition without yet detailing a fleshed-out plan for how he will respond.
Taxpayers will also be keenly watching in the weeks ahead to see if the Senate moves to take up a stalled bipartisan tax deal that combines a temporary expansion of the child tax credit with long-sought provisions for business. Uncertainty over its fate is already complicating the current filing season.
Another move to 'kick the can'?
Many see the likeliest outcome in the coming weeks as another extension to temporarily fund the government for a few more weeks or months.
"Johnson and his team have been so dysfunctional that still another shutdown threat would make them look even worse, if that’s possible," notes Valliere.
A longer-term solution would be for Congress to agree on its 12 annual budget appropriations bills to fund the government for the entire fiscal year.
Appropriators in both chambers insist that progress is being made on that effort.
"They are working on getting these bills done so I'm very optimistic that we can get them done by March 1," said Senate Majority Leader Chuck Schumer this week of the work being done on the Senate side.
But with the Senate currently in recess and not scheduled to return until Feb. 26, it's unclear how the Senate — even if it reached a deal on those spending bills — could get them passed in time to avert a stoppage.
And that's before even taking into account likely further Republican opposition that would be waiting in the House when lawmakers there return.
If the House and Senate dive into detailed talks in the coming weeks, Politico reported Thursday that leaders are already expecting a large group of conservative House Republicans to oppose any deal.
That means Speaker Johnson would be forced to rely on Democrats, a move that would further raise the political temperature around the coming March 1 deadline.
By Ben Werschkul · Washington Correspondent
Ben Werschkul is Washington correspondent for Yahoo Finance.
