THE White House and congressional Republicans will settle their battle over the federal debt ceiling and a temporary continuing resolution that provides the money to keep the government going sometime late tonight.
That's what Prudential Securities analyst Charles Gabriel Jr. predicts. ''Two chances in three,'' he says. Otherwise, as many as 944,000 civil servants out of a total of 4.4 million could be told Monday to stay home. That is the number of bureaucrats described as ''nonessential'' by the Office of Management and Budget in a memo to the Senate Budget Committee last month. The current continuing resolution providing funds to the administration expires at midnight Monday.
Default on the federal debt, in Mr. Gabriel's view, is an ''infinitesimally remote possibility.'' He figures the debt ceiling will be raised to avoid default. So far, the bond market doesn't differ. Prices of Treasury securities haven't gone crazy.
''I don't believe they are going to let the Treasury default,'' agrees Cynthia Latta, an economist with DRI/McGraw-Hill, a Lexington, Mass., consulting firm. Otherwise, she adds, lenders may decide that if Uncle Sam can default once, he can do it again anytime. Interest rates on Treasury securities would rise.
The threat of a massive furlough provides the Republicans with more leverage in getting the White House to deal on a stopgap spending resolution that would continue funding until around Dec. 13, and on a final budget, Gabriel says. If there is no deal, for all practical purposes, whole departments could be shut down.
''It will cause inconvenience to a lot of people,'' Ms. Latta notes. Many will be ''disgusted.''
Neither side would want a lengthy shutdown. ''The GOP,'' says Gabriel, ''will fear that they might lose the spin-control battle in the media and that 'extremist' labels might start to stick; the president will worry that hundreds of thousands of federal employees will be sent home with most Americans noticing no difference.''
The ultimate political pressure for a deal would be the danger that the government could not send out Social Security checks.