Election 2010: The 5 Key Questions About Money
Here are the five most popular money issues that I have been discussing about the 2010 mid-term elections and money. Thanks to all of my pals throughout the CBS News Radio network, who always ask the best questions!
- Why does business like divided government? When the same party controls both the Executive and Legislative branches, businesses fear that the party in charge will pursue an ambitious agenda that often leads to increased costs and a hit to the bottom line (i.e. health care). When the power is split, change is often slower and more incremental, allowing companies to shift accordingly.
- What's going to happen with taxes? Most of the Bush tax cuts enacted in 2001 and 2003 are set to expire and return to the old (higher) levels at the end of this year. That includes: personal income taxes, dividends and capital gains, estate taxes and AMT. Regardless of the outcome of the election, the lame-duck Congressional session will have to deal with taxes by extending some (if the Democrats get their way) or all (if the Republicans get their way) of these tax cuts. Lawmakers must weigh the potential risk of raising taxes amid a weak economy against the ballooning deficit (See below).
- How will the outcome of the election impact the deficit? Most Tea Party candidates call for reducing taxes and government spending in order to address the huge deficit that the country faces. Additionally, the GOP wants to cut $100B from the defict, but hasn't offered much in the way of timing or specific items to slash. In fact, while most politicians from both sides of the aisle agree that we "need to do something about the deficit," details are scant. The bipartisan deficit commission (aka The National Commission on Fiscal Responsibility and Reform) is expected to detail the results of its analysis before the end of the year. As always, the deficit comes down to lots of hard choices, most of which politicians from both parties are incapable of making.
- What's going to happen to Social Security? Sure, you've heard candidates talk about extending the retirement age or even reducing benefits, but the best guess is that the current crew will do nothing but the tried and true kick the can down the road" on SS.
- How might a sweeping Republican win affect financial Regulatory Reform? This is an area that could be heavily influenced by the outcome of the election because most of the rules that are due to emerge from reg reform have yet to be written. Expect some serious lobbying efforts by financial institutions, who could pressure various regulators involved in the process.