Posted on
December 2, 2010 by
smcmillin
WASHINGTON, Dec 1 (Reuters)- A presidential commission trying to balance the U.S. budget on Wednesday softened a proposed tax overhaul to win broader support for its bold plan to slash the $1.3 trillion federal deficit.
The plan faced an uphill struggle to win sufficient backing to trigger a congressional vote. Even if that happens, analysts predict Congress won’t take substantive steps to reduce the deficit this year.
The high hurdles still in front of the plan reduce “to zero the already slim chance of seeing any congressional action on this proposal in the foreseeable future,” said Steve McMillin, partner at policy advisory firm Hamilton Place Strategies.
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The commission’s report will include dozens of proposals, ranging from reducing the federal government’s fleet of vehicles to carving the defence budget. But the willingness to tackle a tax code that is riddled with benefits geared toward specific political goals that are backed by special interests will determine if the White House and Congress are serious about heading off what many economists say is a potential debt crisis.
“To make the code simpler without raising marginal rates, cherished tax preferences such as the mortgage interest deduction have to be on the table,” said Taylor Griffin, a partner at Washington-based consultancy Hamilton Place Strategies and a former official in George W. Bush’s White House and Treasury Department. “That’s where the revenue is.”
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Posted on
December 1, 2010 by
tfratto
Published for CNBC.com, December 1st, 2010:
1. Stocks will rally big time.
Buy, buy, buy!! If you missed the 2009 equities bull market, don’t fret, you’ll still be able to run with the bulls in 2011. I’m calling Dow Industrials at 14,000 by this time next year. Why? Highly productive firms only need a little growth right now to blow the doors off. They won’t get a lot of growth in 2011 in the U.S., but with high productivity, strong global growth, and fewer competitors, they’ll get enough.
2. China speeds ahead.
Another prediction that this is the year China blows up? No – just the opposite: China will continue to manage its economy allowing for strong, sustained growth, but it will continue to speed along market reforms, including market interest rates and greater currency flexibility. China will take some of the froth off for now, and will delay a doomsday prediction for at least another year.
3. There’s more media sector consolidation to come.
There is still a long run…
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Posted on
December 1, 2010 by
tfratto
…Mr. Meltzer said he believed that uncertainty over taxes and regulations was the greatest factor holding back business investment. The United States Chamber of Commerce, the business lobby that spent heavily to defeat Democrats in the midterm elections, has repeatedly made the same argument.
Tony Fratto, who was a spokesman for the Treasury Department and the Bush White House and is now a strategist focused on economic and regulatory matters, said Republican lawmakers were seeking practical advice.
Their situation is not comparable to that of the Republicans who took control of Congress in 1994 “in either emotions or expectations,” he said.
“They’re just much more realistic and pragmatic,” he said. “House Republicans can fight a rhetorical battle here — lay out markers and bills on their side — but they’re under no illusion that what they get through the House will get through the Senate and pass muster with the White House.”
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