Investors and the public have been content to largely brush off the slow-motion Washington march toward a self-imposed economic catastrophe.
Words and warnings haven't resonated. The threat of cascading consequences has only just started to cause relatively minor ripples.
Now would be a good time to start taking the risks seriously.
The daily roller coaster of the last week continued Tuesday, as negotiations appeared to once again take a negative turn after a brief burst of positivity, defined by loaded Washington terminology like "productive" and "serious."
"I'm just going to say that there is a there is a significant gap between where we are and where they are on finances," Rep. Garrett Graves, a Louisiana Republican who serves a lead negotiator for House Republicans, told reporters.
In short, there is no deal and progress once again has been described as minimal at best. Perhaps more problematic is the fact nobody appears to have much of a read on how to put the 60 votes in the Senate and 218 votes in the House together to send whatever comes out of the negotiations to President Joe Biden's desk.
A series of precedent-based strategic decisions have failed to secure a path forward. A deadline that landed months earlier than expected only served to accelerate and further rattle a stare down between a White House and new House Republican majority that have been incapable of identifying a process and structure to lead to a successful outcome.
Biden and congressional leaders now have roughly eight days to figure that all out.
That's a problem.
But so too is the fact that the risk at hand hasn't appeared to resonate, at least in a significant way, among constituents or market participants.
Quietly, several officials and lawmakers have raised concern that critical elements of past last-minute deals -- public outcry and market reaction -- simply haven't formed in a tangible way.
For the White House, which for months pressed the position that negotiating over the issue at all was both irresponsible and dangerous, it's a dynamic that at least in part undercut a carefully constructed strategy designed to pressure Republicans to break away from using the debt limit as a negotiating tool.
Instead, a little more than a week from a potential default, the warnings of catastrophe have mostly been shrugged off by Wall Street and Main Street alike, even as lawmakers find themselves dangerously close to the brink.
Which begs an obvious question: Why?
'This is not generating alarm'
Seated at a restaurant shortly before the start of the G7 summit in Hiroshima, Japan, an adviser to a European leader perhaps summed up the reason for the disconnect.
"I mean no offense, but we've gotten pretty used to this sort of thing," the adviser said.
It's difficult to argue with that assessment, one that appeared to be widely held at the gathering of leaders of countries that represent just under 50% of the global economy, according to US officials.
"It is definitely a subject of interest here at the G7," national security adviser Jake Sullivan told reporters during the summit. "You know, countries want to have a sense of how these negotiations are going to play out."
Still, he noted, despite the fact Biden had already announced he was cutting his foreign trip short to get back to Washington to deal with the issue, it was hardly rattling those in attendance.
"This is not generating alarm or a kind of vibration in the room," Sullivan said.
Over the course of the last 12 years, the debt limit and spending wars that have exacerbated an increasingly caustic and fractured Washington have all had one thing in common: A resolution.
The palpable sense of fear and dread that accompanied the 2011 debt ceiling standoff, not to mention the credit rating downgrade, is nowhere to be found now precisely because of that experience.
And the 2013 experience (twice). And 2014.
By 2015, lawmakers had settled into a pattern tucking debt limit suspensions or increases into must-pass legislation hammered out in a way that incentivized majorities to pull together in a (relatively) timely manner.
The debt limit may have been an element in negotiations, but the possibility of default was never viewed as a serious threat.
Those experiences hardly mitigated the risk posed by a potential default. But they contributed heavily to the perception that while lawmakers may issue stark warnings, or even take initial steps to thrash and throttle, in the end it would be little more than theater.
Lawmakers also came away scalded by the 2011 episode. The experience served as a formative driver for Biden and his team as they entered this debt ceiling fight steadfast in their determination to stamp out the practice of utilizing the creditworthiness of the US government as a central point of leverage.
"We pay our bills, and we should do so without reckless hostage-taking from some of the MAGA Republicans in Congress," Biden said in remarks earlier this month.
This, however, is a demonstrably different moment.
'There's a 'boy who cried wolf' element to this'
House Republicans won the majority in the midterm elections and made no secret about their plans to utilize the debt ceiling to secure major spending cuts.
As predictable as the current stare down is on its face, there have been a series of underappreciated developments that sharpen the scale of risk at hand.
Republicans viewed Biden's "no negotiations" position as strategic posturing from a president with a history of dealmaking. (It wasn't.)
The White House spent months exceedingly skeptical that House Speaker Kevin McCarthy, who required an arduous 15 votes just to secure the speakership, could rally his factious conference behind any bill to raise the debt limit. (He did.)
Democrats started the year targeting moderate House Republicans and a handful of their Senate counterparts as likely to break from McCarthy to head off a potential default. (They didn't.)
White House officials, working off their 2021 debt limit experience, saw a chance that Senate Republican Leader Mitch McConnell would break from House Republicans if the impasse reached dangerous levels. (He wouldn't -- and said as much publicly and in a private call with Biden.)
The White House and lawmakers worked on a timeline that the true "X" date for default would be late in the summer. (It's now the beginning of June, and as early as June 1, according to Treasury Secretary Janet Yellen.)
In the wake of House Republicans passing their own legislation on party lines, and no signs Senate Republicans had any plans to break with their counterparts across the Capitol, Biden instructed three of his top advisers to enter negotiations.
But so far, those officials and their House GOP counterparts have failed to secure any major progress and, publicly at least, talks seem no closer to a deal.
Republican negotiators have complained the White House lacks urgency.
White House officials still view McCarthy as holding a weak hand with an inevitable need for Democratic votes to get a final deal over the finish line.
McCarthy, when asked by CNN's Manu Raju on Tuesday what concessions Republicans would make in the ongoing negotiations, responded with a level of candor that infuriated White House officials.
"We're going to raise the debt ceiling," the California Republican responded.
A broad majority of Americans support raising the debt ceiling and 71% say not raising the debt limit would cause a crisis or problems for the country, according to a new CNN poll conducted by SSRS.
But notably, the percentage of Americans who say they have been following negotiations very or somewhat closely is down 20 points from 2011, according to the poll.
There are signs that the anxiety isn't totally absent on Wall Street, even if it remains less than pervasive.
Credit default swaps show the cost for insuring US debt marks it as riskier than countries like Mexico and Greece. Treasury bills due to mature in early June carry a yield sharply higher than those maturing in May or July.
Stocks fell on Tuesday, with the Dow ending down more than 200 points, but it was hardly the kind of seismic reaction that in the past has rattled lawmakers.
"There's a 'boy who cried wolf' element to this," one Wall Street executive said. "At some point people grow numb to it all. You price in the dysfunction, know there will eventually be an outcome and move on."
Reminded that in the fable he referenced, the wolf does end up showing up, the executive responded with a nervous chuckle.
"Yeah. Well, that would be a total s---show," he said.
The consequences
While there are outlier voices on Capitol Hill who traffic in the view the consequences of the first US default in history are overstated, there is rare -- at least for this day and age -- unanimity that the results would be calamitous.
Congressional leaders on both sides of the aisle agree. Biden has been unequivocal about it and used it as the clear rationale for the long-held position that any debt ceiling increase should be done without conditions.
The risk, officials said, was simply too great to be subject to the uncertainty that comes from divided government and Biden's posture was designed to put an end to using the full faith and credit of the US as negotiating leverage.
That months-long effort dissolved after House Republicans passed their own bill and the Treasury Department announced the US was set to exhaust emergency measures far earlier than expected.
That's the reality, no matter how much effort White House officials expend on what has become an utterly pointless semantic battle over whether these are budget or debt ceiling negotiations -- they are one in the same.
There is no backup plan or unilateral action Biden administration officials have quietly waiting in the wings. Biden suggested this week he had the legal authority, but not the time, to use the 14th Amendment to go around Congress given the likely legal challenges. There is only one near-term off-ramp.
"It's up to lawmakers," Biden confirmed.
It's a reality that leaves the risks associated with default in the hands of a few lawmakers representing a new and restive House majority and White House officials who never thought there should be a negotiation at all. It's all happening under an exceedingly tight timeline to avoid disaster.
To be clear, Congress can move fast when it needs to -- and this would certainly be one of those moments. The rough outlines of the key elements of an agreement have been apparent for several weeks, much of which would be a heavy lift to draft and move so long as the votes were in place.
But the votes most certainly are not in place, nor is any clear progress toward turning that rough outline into a tangible agreement.
Even an oft-used strategy to buy time -- an agreement on a framework that allows for a short-term debt ceiling increase in order for lawmakers to finalize the details -- appears to be a questionable proposition at this point for House Republicans.
House Democrats, whose votes would likely be necessary to get any agreement done, have warned that they are in no mood to be taken for granted.
The economic forecasts associated with the failure to clinch a deal include a recession and job losses in the millions, along with a stock market collapse that could wipe out trillions in household wealth.
Delays in federal benefit payments would hit tens of millions. Households with mortgages, credit cards and student loans would face dramatic spikes in adjustable or variable interest rates.
These are acute, and likely almost immediate, effects that are tangible for households, regardless of whether they have tuned out Washington.
The threat of cascading macro-economic threats poses an even greater concern.
The US represents the world's reserve currency and its debt the world's safest asset. It is, for all intents and purposes, the backbone of the world financial system.
While that brings with it critical stature and benefits, it also carries an implicit level of responsibility that would be severely undercut by the failure to address a mechanism most developed economies can barely understand, let alone grapple with in their own systems.
"If the United States was to default on its debt it would be a catastrophic development for its economy and for the global economy because of the size of the US economy, because of the depth of its financial sector and because of the totally unpredictable situation that they are facing," European Central Bank President Christine Lagarde said on May 21.
"I have trust in the common sense and the civic sense of the leaders to reach an agreement -- which otherwise would take us into a very, very negative development,"
'I don't blame them for not tuning into this circus'
The US has never intentionally defaulted on its debt before (the US technically, but accidentally, defaulted in 1979 due to what Treasury identified as a check processing issue. It was quickly fixed.)
"Chaos in world financial markets is highly likely," more than 200 economists wrote in a letter to congressional leaders in March. "Higher borrowing costs for the federal government, and indeed for all Americans, could remain with us for a long time -- an unwanted legacy of a foolish decision. We should not run the experiment."
The word "experiment" in the letter from the economists is both intentional, and an underappreciated element of the rather sanguine view of the current moment.
While there are thousands of pages of analyst notes and economic projections about what would happen, there is an inherent difficulty in convincing people of worst-case scenarios that have no precedent.
When it comes to default, there is consensus on the consequences in the near term and agreement that the effect of a long-term impasse would drive a vicious spiral that would undercut the US role in global financial markets for years to come.
But there is no point of reference for the public -- no easy comparative to sharpen the fear or anxiety.
To be clear, in isolation, the forecasts of the risks themselves would be enough and they do register. Public polling regularly shows people don't want the nation to default by wide margins.
But in the current political environment, after more than a decade of these types of fights, the ability to breakthrough appears dramatically limited.
The days of marathon negotiations by White House officials and McCarthy's deputies are tough to follow for lawmakers and aides on Capitol Hill, let alone their constituents.
"Hell, some days I don't even know what's going on at this point," one House Republican said when asked why he hasn't heard from more constituents about the matter. "People have real lives and real problems, and we always seem to figure it out, so I don't blame them for not tuning in for this circus."
Isn't that a problem?
"Of course, but it's one of our own making," the lawmaker said.
