News Column

Goldman Sachs Makes Predictions About Shutdown

October 4, 2013

A Goldman Sachs analyst said don't hold your breath, but predicted the U.S. government shutdown will end with a double-deal compromise in mid-October.

MarketWatch reported Friday that a report generated at the investment bank sees the budget impasse and the debt ceiling issue being thrown in together and that one all-encompassing compromise will end the Capitol Hill gridlock sometime before the government goes into default, which the Treasury Department has said would occur on or near Oct. 17.

A compromise reached before default was given 60 percent probability. Republicans agreeing to raise the debt ceiling but allowing the government to remain shut down was given a 30 percent probability.

A deal within the next few days because Republicans bow to pressure was given a 10 percent probability.

"So far, sentiment among Republican voters is still much more evenly divided, and doesn't imply that public pressure will change the situation anytime soon," said analyst Alec Phillips.

"Like most compromises, whatever agreement is reached on either the debt limit or ending the shutdown will probably be unsatisfactory to some members of both parties," the report says.

"If so, congressional leaders would probably prefer to only have to disappoint some of their members once, rather than twice in close succession."

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Original headline: Goldman Sachs predicts a double-deal compromise



Source: Copyright 2013 United Press International, Inc. (UPI).


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