New Year, New Assumptions?
In a remarkable irony, the seat of Ted Kennedy (who spent his life fighting for health care reform) was lost to a Republican who has now shifted the balance of power in Congress.
With the threat of filibusters looming, Republicans have new found leverage.
Will Obama's sudden drop in popularity translate into a more modest economic agenda? I always say that within our firm, our role is not to provide all the answers; it is to ask the right questions.
As the new realities of the new year emerge, one must wonder if some widely held assumptions about pending legislation (that affect businesses) must be modified to reflect the political climate.
Clearly, health care and other legislation will be watered down.
What are the ramifications of a Congressional stalemate? o What will the new health care bill look like? Will employers be burdened with extraordinary administration such as employer coverage requirements? Will Congress levy a tax on preferred health care plans? o Will the administration, desperate to maintain a majority during the mid-term elections and facing the reality of 10% unemployment, introduce a new stimulus package? o With labor's agenda stalled, will the law that would have replaced secret union ballots with card checks stall? o How will bank regulators respond when financial institutions, still mired in commercial real estate debt, begin to default? o Will TARP money be spent on infrastructure? Will the Afghan war drive military spending, or will deficit woes bring about an early conclusion to the war? o What will be done about the Federal debt? At $107,000 per tax payer (did you know you had another mortgage?), not including the looming deficits to Medicare and Social Security, the Federal credit card balance continues to swell.
o Will marginal tax rates (due to increase to 39% in 2011) be reset? In the face of such uncertainty, strategists must continuously review their forecasts.
If you own a small business, you must seek out external (government, industry, competitor, etc.
) predictive indicators and monitor the pulse of the economy and your sector before it is too late to react.
Businesses are also well advised to revisit their budgets regularly and make rapid decisions based on demand and socio-economic trends.
With the threat of filibusters looming, Republicans have new found leverage.
Will Obama's sudden drop in popularity translate into a more modest economic agenda? I always say that within our firm, our role is not to provide all the answers; it is to ask the right questions.
As the new realities of the new year emerge, one must wonder if some widely held assumptions about pending legislation (that affect businesses) must be modified to reflect the political climate.
Clearly, health care and other legislation will be watered down.
What are the ramifications of a Congressional stalemate? o What will the new health care bill look like? Will employers be burdened with extraordinary administration such as employer coverage requirements? Will Congress levy a tax on preferred health care plans? o Will the administration, desperate to maintain a majority during the mid-term elections and facing the reality of 10% unemployment, introduce a new stimulus package? o With labor's agenda stalled, will the law that would have replaced secret union ballots with card checks stall? o How will bank regulators respond when financial institutions, still mired in commercial real estate debt, begin to default? o Will TARP money be spent on infrastructure? Will the Afghan war drive military spending, or will deficit woes bring about an early conclusion to the war? o What will be done about the Federal debt? At $107,000 per tax payer (did you know you had another mortgage?), not including the looming deficits to Medicare and Social Security, the Federal credit card balance continues to swell.
o Will marginal tax rates (due to increase to 39% in 2011) be reset? In the face of such uncertainty, strategists must continuously review their forecasts.
If you own a small business, you must seek out external (government, industry, competitor, etc.
) predictive indicators and monitor the pulse of the economy and your sector before it is too late to react.
Businesses are also well advised to revisit their budgets regularly and make rapid decisions based on demand and socio-economic trends.