Lame-Duck Congress Faces Looming Financial IssuesPosted by in Blog on September 7, 2012
Even though Congress will be in a lame-duck session this fall, with elections looming in November, that doesn’t mean that it will be a completely quiet time. OnWallStreet.com writes about what financial advisors can expect to see this fall.
Some of the looming financial issues include renewing the Bush tax cuts, which will end at the end of the year if Congress doesn’t take action. In addition, the House and Senate need to come up with a deficit reduction plan, or face $2.1 trillion in cuts which will kick in.
“Congress is not going to pass any legislation this year before the election,” Tax expert Andy Friedman tells the publication. “We should have just turned out the lights on Capitol Hill.” And OnWallStreet.com notes that “a favorite maxim in Washington holds that Congress seems only to respond to a deadline — they’ll be facing a couple when they do return — and it might not matter much how the election breaks.”
Friedman also says that he thinks that the markets will be “exceedingly volatile for the rest of the year.” However, he does not think that Congress will fail forever to do something about the budget cuts and tax issues. He does say that the risk of not doing something could get the legislative body to act. “Maybe it is that risk that actually forces Congress to forge a compromise during the lame-duck session, but it’s not going to be easy,” Friedman said.