Washington may be able to avoid a government shutdown by the upcoming Friday deadline, but that doesn’t mean Congress — or the markets — are quite in the clear. House Speaker Mike Johnson said on CNBC’s ” Squawk Box ” on Tuesday that he expects enough lawmakers on both sides to pass his two-step “laddered” continuing resolution. The continuing resolution plan would extend federal funding for some government agencies until mid-January, while other agencies would be funded through early February. While the conservative hardline bloc, the Freedom Caucus , announced its opposition toward Johnson’s plan, several House Democrats and both Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell expressed their support for the plan. This comes after lawmakers already narrowly managed to extend the earlier Oct. 1 deadline. However, with several contentious issues still on the table, such as border security and aid for Israel — economists and policy analysts on Wall Street believe the two-tier continuing resolution will just lengthen the process of reaching longer-term fiscal deals. “If Congress avoids a shutdown, it will likely be through yet another temporary extension. As we wrote recently, the longer the government operates under short-term extensions, the less likely it will be that Congress will reach a deal on full-year spending bills,” Goldman Sachs chief economist Jan Hatzius wrote in an Oct. 25 note. The House is expected to vote on the continuing resolution around 4:30 p.m. ET on Tuesday. More fights ahead? The continuing resolution “doesn’t show any resolution to the underlying problem,” which sets up more fights in January and February 2024, added Benjamin Salisbury, director of research at Height Capital Markets. “This is like two heavyweight boxers feeling each other out at the beginning of the first round. That doesn’t mean that you’re not going to have the showdown — it just means that this is the prologue,” Salisbury said. Government shutdowns historically have a limited and short-lived impact on markets. In fact, Stifel’s chief Washington policy strategist Brian Gardner noted that the S & P 500 actually rose during the prior two government shutdowns. The broad-market index gained 10% during the last shutdown from December 2018 to January 2019, he said. During the 16-day shutdown in October 2013, it rose 3%, Gardner added. “There are some small caps or pure plays or companies that are affected, but it’s more of a specific issue, [related to] payments [and] timing,” said Salisbury. He noted that certain energy companies may be waiting for certain guidelines and regulations from the government that could be delayed during the shutdown. “But in terms of macro impacts, a government shutdown is not death. It’s a different animal.” To be sure, he noted that the continuing resolution could mean that lawmakers can get away with at least a partial government shutdown with fewer consequences, which could have different implications for the political and markets spheres that are not yet clear. Brinkmanship is a bigger issue While even the worst-case scenario of a shutdown doesn’t worry most investors, the bigger issue of the drawn-out political polarization is a longer term concern, said Eric Diton, president and managing director of The Wealth Alliance. Late Friday, Moody’s Investors Service cut its ratings outlook on the U.S. government to negative from stable. The ratings agency highlighted the ongoing political polarization preventing a consensus on a fiscal plan. “We seem to [have] become more and more dysfunctional in managing our finances. That really has to change. We can’t just keep adding on trillions of debt without a plan,” Diton said. “Our currency is the de facto currency of the world. We’ve got to lead by example, and we’ve got to get real about our finances,” he said. —CNBC’s Michael Bloom and Chelsey Cox contributed to this report.