W, The Sequel

Feldman, Amy; Sivy, Michael; Bigda, Carolyn
December 2004
Money;Dec2004, Vol. 33 Issue 12, p89
The author discusses the outlook for the Bush administration. The electoral victory and popular majority ended the uncertainty that had helped keep the stock market on hold for much of the past eight months. While there's much we don't know about his second-term priorities, Republican gains in the Senate and the House will give Bush greater latitude to make his tax cuts permanent and to push pro-business policies despite ongoing concerns about the deficit. Look for Bush to try to polish off the estate tax, a change favored by small business owners. A Bush administration innovation just now becoming available to consumers is the health savings account, which combines a high-deductible health insurance policy with a tax-free savings vehicle for health-care costs. Bush will need a little help from oil prices (lower) and economic growth (faster). But that's not all: If the Republicans interpret their gains as a mandate for further big tax cuts, a growing deficit could undermine the recovery before the end of Bush's presidency. On the other hand, a traditionally conservative focus on controlling spending and reducing the deficit could fuel the recovery and propel the Dow to 12,000 or more before the end of 2005.


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