The White House is setting itself up for an embarrassing Chicken Little moment this Friday. Wall Street is bored with Washington’s fiscal games. The chances of a huge market collapse on Friday are extremely low. Most federal employees won’t be furloughed for weeks. Most government services are still, thankfully, provided by state and local governments, and will continue as scheduled. The sky is not going to fall.
At that point Obama and Democrats will be forced to transition to the next crisis: the continuing resolution that authorizes federal government funding is set to expire March 27th. Republicans will pass a CR some time this month that makes the sequester cuts permanent but gives Obama more flexibility to make government more efficient. That’s when Obama’s Chicken Little act will come back to haunt him. He will either have to sign the Republican spending plan or threaten his own government shutdown.