This is the first of a few posts on the policy decisions stacking up for the end of this year. In this post I will simply list the moving parts, deadlines and timeframes, and which election scenarios are most important to analyze. To some extent this is just a setup post for strategic analysis to follow over the next few days.
- spending, including the sequesters;
- debt limit;
- repeal of all or part of the Affordable Care Act (aka ObamaCare);
- tax reform;
- a potential Grand Bargain on fiscal policy.
The first three categories will be dealt with between now and the end of Q1 of next year. Deadlines under current law will force the Congress to make decisions on each, even if in some cases the decision is not to enact new legislation. I label these must-do parts.
The last three categories may or may not come to a head over the next eight months. Each has no fixed deadline forcing legislative action, and whether they are even priorities depends on who is elected President. I list them because they might, in some form, be included in legislation at the end of this year or the beginning of next, and because discussion about them can heavily influence the must-do items in the first three categories.
While the public tax battle is entirely about extending the top income tax rates, there are many other tax issues expiring at the end of 2012. The tax category can be further broken down into buckets of tax issues:
- extending income tax rates;
- extending capital tax rates;
- extending the President’s refundable tax credit (sometimes referred to as a payroll tax credit);
- extending estate and gift taxes;
- extending other changes from the 2001 and 2003 tax laws (e.g., child credit, education and retirement incentives);
- “patching” the Alternative Minimum Tax again;
- a collection of recurring tax extenders covering a wide range of policy areas.
The spending category also breaks down into several buckets important enough to be considered separately:
- twelve regular FY13 appropriations bills and/or a Continuing Resolution