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Senate close to deal on budget impasse, but will House pass it? (+video)

Talks about the government shutdown and debt limit have centered around the Senate recently, but any deal will have to pass a Republican-controlled House with a powerful tea party wing.

House To Vote Tuesday Night On Budget Bill
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The big story in Washington Monday was about lively efforts to strike a budget-and-debt deal to stave off a potential fiscal crisis. But the names in the headlines were President Obama and senators like Harry Reid, Mitch McConnell, and John McCain.

That raises an important question: With time ticking down toward an Oct. 17 deadline, will House Republicans including tea party enthusiasts climb aboard to help a deal happen?

If not, it could be a bumpy ride ahead for financial markets and the political system.

After all, for a “deal” to really work – to actually reach Mr. Obama’s desk for a signature – it needs to be approved by the Republican-controlled House as well as the Senate. There are essentially three paths forward for the House.

Path 1: compromise. In this scenario, most Republicans vote to support a bargain that raises the debt limit and funds the government, even though the plan may not include the kind of concessions from Democrats that they’d like.

Path 2: let Democrats pass it. In theory, Speaker John Boehner (R) of Ohio could allow a bill to pass, even if most Republicans don't support it. There are 200 Democrats in the chamber, and only 217 votes are needed for a bill to pass, so Democrats would need only 17 Republican defectors. Mr. Boehner has said he’s opposed to letting the country go over a debt-limit cliff on Oct. 17 and default on Treasury obligations. But this scenario would mean breaking the so-called Hastert rule – the notion that a speaker should not bring a bill to the floor for a vote unless a majority of his caucus supports it. If Boehner goes this route and faces the wrath of a restive tea party wing, it could cost him his speakership.

Path 3: failure. This happens if the House rejects the Senate deal or makes changes that would require negotiations past Oct. 17. That wouldn’t necessarily mean the US fails to make payments due on its debt. (The Treasury might have wiggle room to avoid an official default.) But if Congress didn’t fix the mess by quickly reaching a successful House-Senate deal, the Treasury would soon be unable to pay all federal obligations.

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