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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.


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