Lawmakers are engaged in a playground game of "who goes first," daring each other to let the year end without avoiding a Jan. 1 confluence of higher taxes and deep spending cuts.
President Barack Obama returns from Hawaii Thursday to this familiar showdown in the nation's capital, with even a stopgap solution now in doubt. This post-Christmas period unfolds amid a growing sentiment that Congress could still act in January without causing economic harm.
But a big deficit reduction deal is unlikely. That puts pressure on how Congress deals with the nation's borrowing limit, which Republicans see as another budget-trimming opportunity.
Treasury Secretary Timothy Geithner said Wednesday the government would hit its borrowing limit on Monday but said he would take "extraordinary measures as authorized by law" to postpone a government default.