Why government may shut down in a month.

That continuing resolution to keep government running without passing a budget, expires March 27.  Despite both sides saying that they won't allow a shutdown of the federal government, I think it'll happen anyway.

Why Democrats won't cave
Democrats know that a shutdown resulting from a lack of agreement, will benefit them greatly.  It's a lot like voting: when in doubt, you vote for the incumbent and in the case of a proposition you vote no to maintain the status quo.  Senator Reid's continuing resolutions are the epitome of the status quo.  If Republicans -- who only control the House of Representatives, although they continue to exert the power of filibuster in the Senate -- won't go along with status quo, Democrats will use this as proof of House Republicans trying to bully Congress and the White House.

Why Republicans won't cave
Many (not all) Republicans think that, because of polling, they can force a shutdown threat to force cuts.  They're absolutely tired of Senator Reid forcing a continuing resolution without dealing with Representative Paul Ryan's budget bills.

They think that, because they were able to get their sequester cuts to go through, they can now push back harder against Democrats.  And, because the debt ceiling will be revisited in May, this gives them an opportune time to argue that they need to slash spending so that they don't need to visit the debt ceiling issue at all.

House Representatives come from politically-drawn districts, most of which are fairly safe.  To win reelection every two years, they appeal to their base; if their base has been polarized, their Representative has to move to polarized positions to maintain their position in DC.  As a result, House Republicans will generally vote for far-right conservative dogma, than not.

No deal
Thus, large majorities from both sides of the aisle internally believe that they will benefit from a shutdown, or at least use the shutdown to force a showdown.  I can't say that I disagree with them; we can't really go on playing with disparate ideologies at a critical juncture in the economic recovery.  Either we push on with the recovery, or we react to fears of what the future might hold.