Punt. The White House says it won’t negotiate but also doesn’t want a politically created financial crisis to derail Mr. Obama’s second-term agenda.

Some Senate Democrats, particularly those facing re-election in 2014, decide they need something to show for a vote to raise the debt ceiling, which could be used in campaign ads against them. They propose midsize deficit reductions, via spending cuts and tax changes, that reduce the deficit by roughly $500 billion over 10 years.

Mr. Boehner persuades many rank-and-file House Republicans not to risk taking a stand that could lead to a stock-market plunge, worried that a negative reaction could harm them at the ballot in 2014. They offer their own proposed budget changes but avoid politically charged issues like the health law.

Negotiations go down to the wire—both sides must look like they are holding out for the best possible deal—but the House proposal is similar enough to the Senate plan that Democrats and Republicans hash out a compromise that raises the debt ceiling $500 billion or so.

Then they revisit the whole issue again sometime in 2014 or 2015.

Chance of this happening: 65%