The shutdown of the US government has been deferred for two weeks, as a result of a Republican proposal which gives them $4 billion of facesaving but uncontroversial cuts (some already proposed by Obama, the rest unspent money set aside for possible earmarks, which they have already decided not to include in the Budget). This is a pretty big backdown, given the kind of rhetoric being thrown around after last year’s recapture of the House, suggesting positive eagerness for a shutdown. Among the factors contributing to the backdown, I think the vigorous resistance being mounted in Wisconsin, and the significant public sympathy it is attracting, would have to be the most important. Secondary, but also important is Obama’s bounceback in the polls. The bounce has been modest but surprising given the continued weakness of the economy. If the shutdown is blamed on the Reps[1], and the economy is recovering by 2012, their chances of victory don’t look so good.
That said, on past form, the odds have to favor an ultimate capitulation by the Dems. Given their relative strength, and the extreme demands of the Rep leadership (let alone the Tea Party), a pre-emptive capitulation sufficient to avert a shutdown looks unlikely. At the other end of the probability distribution, the chance that, in the context of an extended shutdown, the Reps might buckle as they did in 1995 looks more promising than before.
fn1. As Frank Rich points out, there is a compelling logic to blaming the Republicans for a shutdown, namely that the Republicans would clearly like to shut down the (non-military bits of the) Federal government, whereas the Dems would not.
fn1. And, as Frank Rich observes, it