I am leaning to the resignation scenario myself.
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There might be a letter of resignation read to the public, while a struggling, gagged and straight jacketed Jack Skellington looking figure is bundled into an armored SUV and driven away.
Come to think of it, I -can- envision THAT!
There are no adults in this White House. Rahm was the closest thing to it. What will probably happen is that his behavior will become so outrageous that the country simply will not put up with it and he will be forced to resign, by his own party.