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What to Expect from Washington on Key Issues in 1997

BUDGET: Clinton and congressional Republicans will likely agree to balance the budget by 2002. Congress may also adopt a Constitutional amendment mandating balance in future years.

TAXES: Look for tax cuts totaling $100 billion over five years, featuring a credit for families with children, a capital-gains tax reduction, expansion of IRAs, and estate tax liberalization.

ENTITLEMENTS: Clinton and the GOP will agree to slow Medicare growth. They will also start looking at longer-term reform of Social Security, but don't expect action in 1997.

REGULATIONS: Watch for a big push to deregulate the electric-utility industry and rewrite environmental laws to ease compliance. Regulators will continue to break down barriers between banks and brokers.

MONETARY POLICY: With prices stable and growth solid, the Fed should spend much of 1997 on the sidelines, unless surging stock prices give Fed Chairman Greenspan more reason for concern.

DATA: BUSINESS WEEK


Updated June 13, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.
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