The Treasury Department says that some time in the first or second quarter of next year, the government will need to shut down unless Congress raises the debt ceiling so that additional borrowing can occur to keep things running. This could be a battle royale, creating showdowns within the Republican Party between the Tea Party activists and establishment members, as well as between the Republican Party and President Obama.

Remember that Fiscal Commission (officially the National Commission on Fiscal Responsibility and Reform) President Obama created back in February, which he tasked with balancing the budget by 2015? Turns out solving the nation’s fiscal crisis isn’t quite as easy as it sounds. Yesterday, the Commission’s two co-chairs released a proposal of sorts, a draft of a plan that would bring down the deficit to 2 percent of GDP by 2014, and lower the national debt to 34 percent of GDP by 2040. The co-chairs trumpeted those figures, but the plan was greeted by almost universal ire, since it attacks sacred cows on both the left and the right. Anti-tax crusader Grover Norquist threatened that Republicans who supported the proposal would be breaking their “no tax” pledge. Richard Trumka, head of the AFL-CIO, said the plan “tells working Americans to ‘Drop Dead.’”

In this week's Watcher, we ponder the fate of fiscal policy in the lame duck session of Congress set to commence on Nov. 15. Our article and indeed most of the punditry, analysis, news, and campaign rhetoric has all but completely ignored the fate of some $80 billion in tax breaks for the middle class.