Third-party candidates have largely been a non-issue in American Presidential politics, but what happens if Republicans make good on their threat of budget sequestration and cost the country a million jobs just as our economic woes are easing? Is that the waterloo President Clinton has been warning that the GOP needs in order to crash and regroup? Or is it a party without a floor, destined to sunder into a protest Tea Party flank with no chance to govern and an establishment one concerned only with the interests of the wealthy? Are we headed for the end of our two-party system? And are the Democrats, presently the more united party, immune? From Ron Fournier at the National Journal:

“Between bites of an $18.95 SteakBurger at the Palm, one of Washington’s premier expense-account restaurants, Republican consultant Scott Reed summed up the state of politics and his beloved GOP. ‘The party,’ he told me, ‘is irrelevant.’

He cited the familiar litany of problems: demographic change, poor candidates, ideological rigidity, deplorable approval ratings, and a rift between social and economic conservatives.

‘It’s leading to some type of crash and reassessment and change,’ said Reed, who ran Bob Dole’s 1996 presidential campaign and remains an influential lobbyist and operative. ‘It can’t continue on this path.’

Reed sketched a hypothetical scenario under which [Rand] Paul runs for the Republican nomination in 2016, loses after solid showings in Iowa and other states run by supporters of his father (former GOP presidential candidate Ron Paul), bolts the GOP, and mounts a third-party bid that undercuts the Republican nominee.

Paul, a tea-party favorite who was elected to the Senate in 2010, told USA Today on Wednesday that he was interested in running for the Republican presidential nomination in 2016. ‘I do want to be part of the national debate,’ he said.

What are the odds of Paul or another GOP defector splitting the party? Reed asked me to repeat the question—and then grimaced. ‘There’s a real chance,’ he replied.”