There's a 50-50 chance the government will fail in its push to lift the $14.3 trillion debt ceiling and end up defaulting on its debts, says former Senator Judd Gregg, R-N.H.
The government needs congressional approval to lift the $14.3 trillion debt ceiling in order to avoid defaulting on its debts by Aug. 2.
Republicans may give the Obama administration what it wants and lift the ceiling, but after allowing the government to shut down first, even if just for a little while.
"My gut tells me that we'll need a weekend of drama — maybe a weekend of the government not paying its bills — politicians need drama to make something happen," says Gregg, who today works for Goldman Sachs, according to Business Insider.
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"As soon as Social Security checks don't go out, the politics will change. I suspect it'll take artificial drama to get closure past the House."
Republicans and Democrats want to lift the ceiling but are at odds over how to narrow deficits in the process, with the former opposed to certain tax hikes and the latter to spending cuts.
Even though both sides say they don't want a default, there is a "50-50 chance that we go into a few days of disruption," or at least a "weekend of drama," Gregg says.
A group of six Senators, half Democrats and half Republicans, appear to have worked out a path to raising the ceiling that involves compromise on raising revenue and cutting spending.
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Nothing concrete, however, is in the works.
Former Treasury Secretary Larry Summers says the tentative deal is "more a plan to have a plan rather than a plan," according to CNN, while Democratic Sen. Dick Durbin, a member of the group of six Senators, says the plan is "not ready for prime time."
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