What to Expect from Washington on Key Issues in 1998

BUDGET
Washington is already buzzing with proposals for how to spend a possible budget surplus. All talk is premature: With the economy cooling fast, any surplus will be too small to spend.

TAXES
Congress will pass IRS restructuring in the spring and may follow up with some easing of the marriage penalty. The debate over broad-based tax reform will heat up but don't expect much action in '98.

TRADE
With tensions heated over Asian bailout, the Clinton Administration will fall short in its quest to win congressional approval to negotiate a new trade pact with Latin America.

REGULATION
The SEC will press FASB to approve a new rule requiring companies to better account for their hedging positions. SEC Chairman Arthur Levitt also will launch new initiatives to cut capital-raising costs.

MONETARY POLICY
Greenspan's embrace of the New Economy has its limits: If the Asian crisis doesn't slow the U.S. economy, the Fed will, with one or two rate hikes in '98.

DATA: BUSINESS WEEK