“It’s what Donald Rumsfeld would call a known unknown,” Matthew O’Brien writes.

“We know that we don’t know what would happen if we don’t raise the debt ceiling before we run out of cash to pay all our bills on time. It might ‘only’ crush consumer confidence, send markets cliff-diving, and slow down our already slow recovery — if not push us back into recession. Or it might be a historic blunder that not only flattens the economy today, but also forever raises our borrowing costs and lowers our standard of living tomorrow. So the stakes are fairly high. We just don’t know how high.”

Ezra Klein: “One way a shutdown makes the passage of a debt limit increase easier is that it can persuade outside actors to come off the sidelines and begin pressuring the Republican Party to cut a deal. One problem in the politics of the fiscal fight so far is that business leaders, Wall Street, voters and even many pundits have been assuming that Republicans and Democrats will argue and carp and complain but work all this out before the government closes down or defaults. A shutdown will prove that comforting notion wrong, and those groups will begin exerting real political pressure to force a resolution before a default happens.”

“It’s worth noting, for the record, that it would be vastly better if there was no shutdown and no default and House Republicans stopped trying to enact an agenda that lost at the polls by threatening the country. But American politics is what it is right now, and given its sorry condition, a shutdown might be the best of very bad options.”

House GOP Whip Kevin McCarthy (R-CA) said the House “will send a third government funding the bill with ‘a few other options’ if the Democratically-controlled Senate rejects the bill passed in the House last night as expected,” National Review reports.

Said McCarthy: “We will pass a bill…that will keep the government open, that will reflect the House, that I believe the Senate can accept, that will have fundamental changes to Obamacare that can protect the economy for America.”

However, Senate Majority Leader Harry Reid (D-NV) insists the Senate will not consider any bill that impacts the health care law.

“I don’t know that I have a clear vision how we move through this. And I think the debt ceiling is maybe even more murky.”

— Sen. Bob Corker (R-TN), quoted by the Washington Post, on the standoff over government funding.

The U.S. government “moved to within hours of its first shutdown since 1996, as House Republicans redoubled their drive early Sunday to delay the new health care law and Senate Democrats stood firm against changing the law as a condition of funding federal departments,” the Wall Street Journal reports.

“The standoff left little prospect that Congress could reach agreement on terms for funding the government by midnight Monday, when the current fiscal year expires. A shutdown would leave essential services operating but prompt federal agencies to suspend many functions and furlough hundreds of thousands of workers.”

New York Times: “The House’s votes early Sunday all but assured that large parts of the government would be shuttered as of 12:01 a.m. on Tuesday. More than 800,000 federal workers deemed nonessential faced furloughs; millions more could be working without paychecks.”

Top GOP sources tell Politico that “the most likely scenario was that the House would pass a CR this weekend that would delay Obamacare for one year. That move would, almost certainly, result in a government shutdown.”

Washington Post: “According to a Republican inside the room, leaders are advocating an aggressive approach but trying to put in a few sweeteners to deal with the fallout of when the government shuts down. The package includes a one year delay of all elements of the health law, a permanent repeal of the medical sales device tax that funded portions of the law and a proviso that would assure pay for the military. Additionally, the GOP has moved the date for federal funding back to Dec. 15.”

New York Times: “If accepted by the Republican caucus and passed by the House, the
package would all but assure that much of the government will shut down
on Tuesday. Senate Democratic leaders have made clear that they will
accept no such scaling back of the health care law.”

Stan Collender:
“One of the biggest differences between the current shutdown situation
and the ones that occurred in 1995 and 1996 is that Bill Clinton could
negotiate with Newt Gingrich knowing that the deal they agreed to would
be accepted by their respective political parties. That’s absolutely not
the case today.”

“House Speaker John Boehner (R-OH) clearly does not speak for the House
GOP caucus. Indeed, Boehner has been slapped down by his caucus so often
and so hard in recent days that it’s more likely almost anything he
would agree to will be rejected out of hand than it will be taken
seriously.”

Wonk Wire has the rundown of what’s affected and what’s not.

New York Times: “Back then, Rupert Murdoch’s Fox News Channel was a year from its debut, Andrew Breitbart was a lowly assistant at E! Online, and The Drudge Report was an obscure gossip and news digest sent by e-mail — to the lucky few who had e-mail. But today, a fervent group of conservatives — bloggers, pundits, activists and even members of Congress — is harnessing the power of the Internet, determined to tell the story of the current budget showdown on its terms. ”

“Paying America’s bills is not a concession to me. That’s not doing me a favor.”

— President Obama, quoted by the Washington Post, on the GOP attempt to bargain over the nation’s debt limit.

Norm Ornstein: “There is one area where Obama could and should be willing to negotiate with Republicans–to take the default option, the full faith and credit of the United States, off the table permanently. Senate Republican Leader Mitch McConnell provided the vehicle to do this in the eleventh-hour resolution of the debt ceiling crisis in 2011. The ‘McConnell Rule,’ as it was called, allowed the president unilaterally to extend the debt limit, while also providing for a congressional resolution of disapproval. If both houses of Congress disapproved of the president’s action, the resolution would be sent to the president. He could veto it–but it would take two-thirds of both houses of Congress to override his veto.”

“Institutionalizing the McConnell Rule would be valuable enough that it should extract some real concessions from the president to achieve it.”

House Republicans “will meet in a rare Saturday session as they plan their next move to keep the government open past midnight on Monday while extracting major concessions on President Obama’s health care law,” the New York Times reports.

“Any move short of passing the Senate bill is likely to shut down the government, at least briefly, unless it is accompanied by a measure that would finance the government for at least a few days. That would allow the Republican to keep their struggle alive.”

Wall Street Journal: “House leaders face a difficult situation. Mr. Boehner doesn’t want to alienate the dozens of lawmakers who won’t back any spending plan that doesn’t in some way limit the reach of the health law. At the same time, Senate Democrats say they will reject any measure that alters the health law.”

Washington Post: “Boehner’s leadership team offered no public comment and remained out of sight most of Friday, hunkering down for another weekend on the brink.”

Politico: “House and Senate leadership aides in both parties are increasingly convinced the federal government will close for the first time in more than 17 years on Tuesday morning.”