Don't expect big changes from new Congress

Your Money

January 14, 2007|By Andrew Leckey | Andrew Leckey,TRibune Media Services

Though political winds have switched course for 2007, investors probably needn't batten down the hatches for major changes emanating from Washington.

Democrats control Congress, but they want to avoid doing anything that appears overly brash and might scare voters away in the 2008 presidential election, experts say. President Bush still has veto power. As a result, gridlock is likely to be in style.

Some changes are expected to occur, such as a boost in the minimum wage, but action on other pocketbook issues likely will be limited. Here's a likely scenario:

Embattled mortgage giants Fannie Mae and Freddie Mac are likely to receive a break from Democrats, who support their goals to expand access to housing.

Major immigration reform is not a strong possibility.

Defense is losing some prominence. But don't expect sharp cuts in already slated spending.

Serious Social Security reform doesn't seem likely.

Only minor changes are likely for the much-criticized alternative minimum tax. It was designed to make sure wealthier Americans paid their fair share of taxes but has widened from the rich to ensnare a large chunk of the middle class.

Bills to curtail oil industry subsidies and drug company pricing will have high visibility, but the odds still seem to be against any major changes.

Andrew Leckey writes for Tribune Media Services.

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