On January 1, 2013, the federal government is scheduled to undertake massive revenue and spending changes. The Bush Tax Cuts for all Americans will expire, along with a host of tax extenders such as the Alternative Minimum Tax “patch” and the Medicare “Doc Fix.” On the spending side, the failure of the Super Committee to reach an agreement last year will result in the sequester (cuts to spending) of $1.2 trillion split evenly between defense and non-defense programs over the next decade. These two events would be enough to make for a busy end of the year on the Congressional schedule, but to make the situation a little more interesting, the federal government will also reach its debt ceiling around the same time.
We believe that waiting to deal with these issues until after the election is a missed opportunity for both the Republican and Democratic parties. In fact, both parties stand to lose if something is not done before the election.
Read the full memo here.