Fortune: How nervous should the markets be?

Tom Cole: I don’t think there is much to worry about in the short term. We are clearly going to pass a CR [continuing resolution]. The government is not going to shut down.

But that will likely only take us to December.

I still feel pretty optimistic. There are three forcing events. There is the transportation fund, and we are not going to stop road construction, so we’ll get there. There is the debt ceiling, which is always a triggering event. And finally, there is the sequester, and people underestimate how determined rank and file members are to make sure we don’t have a sequester [triggered] that hits the military for another $40 billion in cuts. I think the pressure to defend the military after having had one round of sequester cuts will force everybody to the table.

So, the debt ceiling will be raised without another fight and threat of default?

I think that is less certain. It’s easier to pass if it’s wrapped in a larger package. One hard vote is better than three or four, especially if protecting the military is part of it. The president could pass [a bill raising the debt limit] easily if he didn’t insist on a clean bill. If we can’t pass it that way and we do it stand-alone, Republicans will find 20-30 votes to get it through. One way or another, it will happen. But it won’t be a drama-free event.

What is the future of the Export-Import Bank, which party hard-liners have nearly succeeded in killing?

I see it being attached to something and winning. This is an internal Republican fight; most Democrats are for the Ex-Im, and they’re finding that this is a useful wedge issue to bring the business community to their side. We are already seeing the ripple effect of lost exports. [The bank’s authority lapsed in July.] I’m not about to vote against companies providing thousands of jobs for my constituents.

What are the prospects for compromise on longer term funding for the government?

This rests in the hands of the president. The key player for us is [House Budget Chair] Paul Ryan. Anything that Ryan negotiates, we will get the votes for, and he’s demonstrated he can put bipartisan votes together. We need something like the 2013 Ryan-[Patty] Murray deal that gives us a couple years of funding. We need some entitlement reform to pay for part of this, and it needs to extend to two years.

As Republicans, we don’t want the prospect of a government shutdown or a fiscal cliff in an election year. It’s a great way for Democrats to talk about irresponsible Republicans. And it’s in the interest of all incumbents in Congress, [who are] already unpopular. Good sense and good politics argue that you want it out of sight and out of mind.

You’ve seen dozens of leadership struggles during your years in Washington. What do you make of the lawmakers who provoked this one?

There are 40 people who want to tell the other 200 what to do, even if it doesn’t make any sense. What they are looking for is influence. But this is a group that is not large enough to control the Republican conference or even attract a viable alternative candidate [for Speaker]. We don’t disagree with goals [such a defunding Obamacare or Planned Parenthood] but we refuse to be blackmailed into stupid tactics. This is a tactical debate. It’s not about theology.

We’ve got people who don’t seem to understand the basic reality of divided government and checks and balances. They clearly haven’t read the Constitution. They act like they think Boehner is the Prime Minister, not speaker of one chamber.

What’s your advice to business leaders nervously watching events unfolding on Capitol Hill?

They need to engage with members on how disruptive this talk of government shutdowns is, how difficult it is on business, the impact on hiring. We need to arrive on adult compromises that provide certainty—and that goes for this president, too. Otherwise, the tendency for business is not to invest. We get caught up in our own little world in Congress. These guys need to see a bigger world that needs certainty.

If Silicon Valley is known for its dynamic disruption, Washington D.C. has become known as the valley of dynamic dysfunction. How optimistic are you that this can change?

I’m reasonably optimistic. This is a time of great turmoil and low esteem. But Congress has been pretty productive. In 2013, we passed a joint budget for the first time since 2001. All appropriation bills have gotten through the appropriation committees. The deficit was $1.4 trillion when the Republicans took over the House; that has dropped to $483 billion—a trillion dollar swing in four years. We’ve passed major bipartisan bills on issues ranging from veteran suicide to human trafficking. We’ve reauthorized education reforms and a cyber bill is likely this fall.