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For the third year in a row I am not writing a year-in-review column because, honestly, they’re boring and unnecessary. If you’ve been interested enough in the federal budget to read my column in 2012, you already know what happened and probably don’t want to be reminded. If you didn’t care during the year, you don’t need to know now.
Besides, what’s to come in 2013 is definitely more interesting.
But before I get to my predictions for next year, you might be wondering how well my forecast last December about 2012 turned out. Four of my five predictions were spot on, and the fifth still hasn’t been decided. In other words, I may have thrown the pundit’s version of a perfect game.
The four predictions that have already worked as I expected were that (1) There would be no movement on the federal budget, including no budget resolution in 2012; (2) To the extent there was any big budget fight in 2012, it would be about avoiding the fiscal cliff; (3) The Obama 2013 budget would not specify how the White House would comply with the sequester; and (4) No tax overhaul bill would be enacted.
(Note on No. 2: Federal Reserve Chairman Ben S. Bernanke had not yet coined the phrase “fiscal cliff” when I made last year’s predictions, and I used “sequester” to describe what would happen at the start of 2013. That doesn’t weaken the value of the prediction, although I really wish I had predicted that fiscal cliff would become one of the most hated postelection topics of the year.)
The one prediction whose fate is still unknown is that I told readers not to be shocked if the only thing that happens in a lame-duck session is a deal that both extends the tax cuts and delays the sequester spending cuts until June 30, 2013, or beyond. We should know in a few weeks whether that happens.
Given my stellar record for 2012, I should probably retire now while I’m at the top of my game. Not taking my own advice, here are my fearless budget forecasts for 2013.
1. A tax overhaul will not be enacted in 2013. I continue to be mystified by those who insist tax changes can be done quickly next year. The 1986 tax overhaul bill took three years to enact, including almost a full year just to draft the transition rules from the old to the new system. Almost three decades later, Congress has become hyperpartisan, and taxes are a much hotter issue. Even more important, the 1986 tax overhaul bill was based on the premise that the bottom line had to be revenue-neutral — that is, that there would be no net increase in revenues. The 2013 (or more likely the 2014) tax overhaul act will have to increase revenues from what they will be under current law. That means that the already grossly complicated politics of tax changes will be complicated even further. No matter what you hear about fast-track procedures, getting a tax overhaul done in 2013 in one-third the time it took to do it in 1986 is almost inconceivable.comments powered by Disqus