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By Knight Kiplinger
The Kiplinger Washington Editors
July 2, 2009
 

Overhauling
Financial Regs

By year-end or so, Congress will give the nod to a major rewriting of the nation's financial regulatory system. This week’s Kiplinger Letter explores whether the package will do more harm than good and what lawmakers are likely to include.
 
ALSO IN THIS ISSUE: The Economy, Business Costs, Taxes, Supreme Court, Energy, Workplace Regulations, Climate Change, Health Care Legislation and Foreign Policy

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I just attended a franchise seminar. The speaker represents a few hundred franchises that (he says) are hand picked. He has the prospect (aka victim?) answer some questions about themselves then he makes recomendations - based on your personality, capital situation, etc.. If you pick a franchise, then he does some due dilligence for you. If you both decide it's a good idea, he helps you get started. He says he offers this service free of charge, which means he gets a commission if he's able to sell you a franchise. Has anyone done this? Successfully? Unsuccessfully?
-- fender
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So Now What? Bush Must Adapt to Democratic Gains

Voters sent a message Tuesday—one that neither Republicans nor Democrats can afford to ignore.
 
By Richard Sammon, Senior Associate Editor, The Kiplinger Letter
 

November 8, 2006

Big changes in policy, both foreign and domestic, are inevitable, once government leaders in Washington come to grips with Tuesday's election results. The vote was a stunning defeat for President Bush, even though he wasn't on the ballot. Most midterm elections hinge on local issues, but this one was clearly a referendum on the president—and he lost, big-time. Members of his own party won't let him ignore that, at least not if they hope to recover in 2008.

Bush has no choice but to shift gears in Iraq. It's the issue that drove most Democratic gains, and even Republicans who managed to handily win reelection know they need to get Iraq behind them. They're already signaling that U.S. policy must change soon, and Bush can't run the war effectively without GOP support. That's why Donald Rumsfeld resigned abruptly. A serious debate on alternatives will begin in early January, after the bipartisan Iraq Study Group offers its recommendations on an orderly disengagement. Republicans hope the task force will provide political cover, letting them take the issue off the table before 2008 without losing too much face.

As for the outlook on domestic issues, here's our take:

  • A higher federal minimum wage is certain. It's a top priority for Democrats, and Republicans won't want to be beaten up again for standing in the way.

  • More tax cuts? Forget about 'em. There's no chance Congress will OK any significant reductions or make permanent the raft of cuts approved in the first years of Bush's administration and set to expire after 2010. At best, Congress will pass, and Bush will sign, some minor tax breaks for the middle class, such as bigger credits for college tuition.

  • But no tax hikes for individuals are likely, either. Democrats know they could never get Bush to sign off on higher taxes, so they won't waste their time and political capital trying. Businesses may not fare so well, however, especially big oil companies. Democrats will try to do away with some of their tax breaks. Expect a fight on that.

  • Look for new restraints on spending, probably with the reinstatement of the old pay-as-you-go rules, requiring lawmakers to come up with new revenue or offsetting cuts if they want to approve new spending. But there will be plenty of loopholes, and in the end, spending won't decline that much.

  • That'll complicate Democratic efforts to fix the alternative minimum tax, a top priority. Actually, both parties would like to adjust the AMT to keep it from hurting middle-income taxpayers. But the tax brings in badly needed revenue.

  • The odds for a guest-worker program are better now. GOP conservatives in the House blocked even a vote on Bush’s plan before the elections, insisting that it amounted to amnesty for illegal aliens. Democrats will not only allow the vote but also help Bush win approval.

  • Much more congressional oversight is guaranteed—on everything from the war to ethics to surveillance to no-bid contracts. But it won't be a witch hunt. There'll be no push for impeachment, for example. And Republicans will be a lot more willing to ask tough questions than they have been.

    The way Congress works is likely to change next year, too. Rank-and-file members in both parties will try to work together more, for self-preservation, if nothing else. Voters gave incumbents a scare, and even those who survived know that the public is tired of partisan bickering and gridlock. Still, it won't be easy to put aside the bitterness that has built up.

    Democratic leaders will be pragmatic and more moderate. They may be claiming a mandate, but deep down, they know their gains aren't a victory of ideas. Neither side really offered any. Democrats picked up seats in both chambers only because voters are angry with Bush and the GOP. And many of the new House and Senate Democrats are moderates or conservatives. That's why they won, and they know they won't win again unless they stop the old-dog Democrats from pushing any pent-up liberal wish list.

    Republicans, meanwhile, will be much less loyal to Bush. Those who won have done so mostly by declaring independence from the president—a far cry from 2000, 2002 and 2004, when they were beholden to him.

    Bush's era of dominance is over, replaced by a lame-duck status. The big unknown of the next two years is how he'll deal with that. He certainly won't throw in the towel. There'll be no change in basic philosophy, whether it's being aggressive in foreign policy and the war on terror or pushing for limited government, a pro-business climate and low taxes.

    But he'll have to make some tough choices. The president will have to narrow his focus, deciding which issues are the most important to the country, to his legacy and to his party. With only two years left in office, and only a matter of months before the 2008 presidential race intrudes on the legislative process, time and energy for an ambitious White House legislative agenda will be limited.

    And he'll have to decide how to best pursue that agenda. Bush's history as governor of Texas suggests that he can work with a Democratic legislature, horse-trading to get at least part of what he wants. His history as president paints a different picture, showing a man who is more willing to go for broke.

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