U.S. lawmakers have a long to-do list for the coming weeks — and financial markets could get rattled by the ensuing drama, analysts are warning.

The month ahead “appears likely to be a uniquely frenetic period in Washington that touches on the federal spending deadline, the debt ceiling, and the ongoing budget reconciliation effort,” said Isaac Boltansky, director of policy research at Compass Point, in a note.

Congress must deliver a funding measure before the federal government’s new fiscal year starts Oct. 1. in order to avoid a partial shutdown, as well as raise the federal borrowing limit this fall to prevent a U.S. default. Plus, the House and Senate’s Democratic leaders are aiming to pass a $3.5 trillion social spending package through a process known as budget reconciliation, while also delivering a $1 trillion bipartisan infrastructure plan.

“We hope that everyone was able to recharge during August, because September is set to be an unmitigated mess,” Boltansky said. He wrote that the market
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is also “eagerly awaiting clarity on the Fed’s tapering timeline as well as the White House’s plans for the Fed’s leadership. Taken together, Capitol Hill has not produced a similar concentration of political risk for the markets since the fiscal wars a decade ago.”

Related: Powell’s future in question as Warren blasts Fed for being too easy on the biggest banks

And see: Taper your pessimism — Federal Reserve’s actions won’t derail U.S. stocks, Barclays strategists say

The autumn action will help determine President Joe Biden’s legacy, along with whether Republicans can take control of the House or Senate in next year’s midterm elections, according to James Lucier, managing director at Capital Alpha Partners.

“The stakes of a big legislative agenda this fall could not be higher,” Lucier said in a note. “Biden is betting his presidency and his recovery from the Afghanistan debacle on it. Democrats hope that the ambitious legislative agenda will be a popular success and lock in Democratic dominance of Congress and the White House for years to come.”

Greg Valliere, chief U.S. policy strategist at AGF Investments, stressed that moderate Democratic lawmakers are raising concerns about the cost of the proposals touted by their party leaders. One such lawmaker, Sen. Joe Manchin of West Virginia, last week reiterated his opposition to his party’s efforts to pass its $3.5 trillion package, as he called for a “strategic pause.”

“A chaotic fall is shaping up in Washington, with the outlook for massive new spending and taxes now in doubt — and a nasty debt ceiling fight threatening to annoy financial markets by next month,” Valliere said in a note.

“The debt ceiling always gets raised, but this time will be nerve-wracking, amid threats of a government shut-down,” he added. “Can massive infrastructure bills win passage in this climate? A major haircut will be required, which could force angry House progressives to oppose infrastructure spending rather than accept pared-back bills.”

Democrats have a narrow House majority and can afford no more than three defections on legislation if there’s no Republican support for it. The Senate is split 50-50, with Democrats in control only because Vice President Kamala Harris can cast tiebreaking votes.

Sticking points in the $3.5 trillion package

Democrats in the House, Senate and White House are continuing to negotiate this week over sticking points in the party’s $3.5 trillion package, but this week “does not promise to offer much clarity as we approach the soft September 15 deadline
for committees to consider their bills,” said Benjamin Salisbury, director of research at Height Capital Markets, in a note.

“Major unresolved points of contention include capital gains, SALT, and whether to expand Medicare as advocated by Sen. Bernie Sanders (I-VT) or shore up Obamacare as supported by House Speaker Nancy Pelosi (D-CA),” Salisbury added.

Biden has proposed increasing the top tax rate on capital gains to 43.4% from 23.8%, while SALT refers to state and local taxes. Some U.S. lawmakers from high-tax states are pushing for a repeal of the $10,000 cap on SALT deductions that was put in place by 2017’s tax overhaul. 

Senate Democrats also are reportedly considering a range of other possible tax hikes to fund their spending plan, from levies on stock buybacks and “virgin plastics” to a “CEO pay disparity” tax.

“Americans should expect there are going to be a range of negotiations and ups and downs, and it’s going to be called dead several more times over the next couple of weeks,” White House press secretary Jen Psaki told reporters on Tuesday, when she was asked if Americans should expect the reconciliation bill won’t cost $3.5 trillion by the time it’s completed.

“What the president’s most focused on are both steps he has proposed to lower costs for the American people but also ensuring that corporations and wealthy individuals are asked to pay more. Both are important to him, and we’ll see how the negotiations pan out,” she added.

The $3.5 trillion package calls for big spending on efforts related to “human infrastructure,” climate change and other Democratic priorities, with a recent New York Times report describing its approach as a “cradle-to-grave reweaving” of the social safety net.

Price tag seen coming in under $3.5 trillion

While Psaki didn’t address whether the package actually will have a final price tag of $3.5 trillion, analysts are betting it ends up getting downgraded.

Compass Point’s Boltansky said it’s “easy to envision a scenario where the effort fails due to demands from either progressive or moderate Democrats,” but his shop believes ultimately “Democrats will be successful, albeit with a less ambitious package.”

The likely headline figure will come in between $2 trillion and $2.5 trillion, he said. He emphasized that Democrats believe they have a once-in-a-generation legislative opportunity, and history suggests they’ll lose their grip on the House next year.

Analysts at Beacon Policy Advisers said they expect the $1 trillion bipartisan infrastructure
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legislation and a “human infrastructure” bill with a price tag of around $3 trillion will become law.

“That has always been our base case but we are moving up the timeline for both from the end of the year to somewhere between the start of October and end of November,” they said in a note.

MarketWatch’s Robert Schroeder contributed to this report.

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