🔮 EYE OF THE SCHUMER
He’s Shutting down the government…Right? PLUS: Democratic Party Insider on shutdown game theory
At 3pm ET today, Monday, congressional leaders will meet with Trump for negotiations to avoid a government shutdown.
House Republicans passed a continuing resolution (CR) to fund the government through November 21, and then went on recess until October 1.
The ball is now in the court of Senate Democrats. To avoid a shutdown, Republicans need at least seven Democrats to break the filibuster and pass the CR. Whether those votes materialize is up to Chuck
DC conventional wisdom, shared by Polymarket traders, is that a brief shutdown or funding lapse is most likely:
The logic is as follows: Schumer knows Democrats have no real cards to play: they control zero branches of government, save the blocking power of the filibuster. This puts Schumer in a dilemma:
Pass the CR now (even though he rejected it Friday). This would destroy his negotiating credibility for future battles with Trump and enrage his base (Schumer faced calls to be primaried by AOC after caving in March’s budget fight).
Shut down the government and risk being blamed by the public, or give Trump cover for threatened mass layoffs of federal workers during a shutdown.
The Democrats’ current position is that the spending bill should include protections for expiring Obamacare provisions and limits on Trump’s rescission authority. But major changes to the budget at this stage are unlikely with the House out of session until October 1.
Short shutdown bros argue that the obvious path is for Schumer to run a quick shutdown, then claim “bipartisan negotiations” as an excuse to cave. And we get ready to run back the shutdown markets in late November when the funding expires again.
Schumer Shutdowns By the Numbers
This seems like a perfectly plausible story.
But let’s see if we can’t dig a little deeper?
Below is an AI-compiled dataset of all the shutdown battles of Chuck Schumer’s Senate career since 2011:
Some observations from the data:
Two-thirds of budget crises end without a shutdown or funding lapse. Polymarket is pricing 75% odds of a full shutdown in the next two and a half days: the market seems to think the current situation is quite a bit more serious than a standard budget fight.
Historically, a funding lapse (without a full shutdown) occurs in 19% of budget fights, but this scenario is only priced at 4% on Polymarket.
The average shutdown length during Schumer’s Senate career is 18 days but Polymarket is pricing the odds for 10-29 days of shutdown this year at just 16%. Admittedly, this is from a small dataset of just three observations:
October 2013: 16 days
January 2018: 3 days
December 2018-January 2019: 35 days (partial shutdown)
In Schumer’s 14-year Senate career, only 2 years (2013 and 2018) contained government shutdowns. Yet the market is pricing 33% odds for shutdown in the remaining three months of 2025.
DC Scuttlebutt
The Oracle reached out to several Democratic party insiders for this piece, but no one was willing to go on record. The following is a brief email interview with a senior Democratic strategist who preferred to remain anonymous.
What is your base case for how the shutdown plays out?
Schumer folds with no concessions or minimal concessions (e.g. agree on a framework to consider ACA subsidies) quickly (within a week) ~ 70%. Schumer extracts real political win (e.g. ACA subsidies) ~ 20%. Prolonged shutdown (over a week) ~ 10%.
Who are the top 2-3 people to follow online for breaking news on the shutdown? Who tends to have the accurate info first?
Punchbowl. It’s insane how no one is even close.
How would you describe Schumer’s calculus on this? Is he more under pressure from the left or the center?
The democrats who would have voted to keep govt open have all lost or retired (Sinema, Manchin, Donnelly, Bayh etc). Schumer decided to keep govt open in March and got yelled at and now the left wants a fight. The problem is they hold no cards. The only way to strengthen their hand is to win elections and the inability of democrats to focus their message on pocketbook issues is making that harder.
Do you have any data on how the Democratic “base” feels about a shutdown?
No one outside of DC has a view on the shutdown. This is all being created by the professional left ecosystem.
How would you describe Schumer’s negotiation style in past shutdown fights?
Clear eyed about their actual leverage (none).
Did Trump’s threat of mass federal layoffs and/or the Supreme Court decision on line item rescission change the thinking on the D side?
I think Schumer is letting the professional left touch the stove.
If there is a shutdown most people seem to think it will be short? Do you agree?
Yes. Trump has many tools to make it incredibly brutal.
Do you have any data on how public opinion has moved in past shutdowns?
Never matters. Remember the Homan story? That was a week ago. Under Bush that would be a story for months.
What would be some early indicators of a deal or no deal? Ie reports of certain people meeting or pizza being delivered to the capitol, etc?
Honestly, I’d just look at Polymarket!
Disclaimer
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Nobody knows nuttin. Keep your money in your pocket