A reality check for the Nov. 2 victor

Regardless of who wins the Nov. 2 Presidential contest, financial markets may have little to cheer, according to research outfit Informa Wall Street will still be concerned about the U.S. fiscal outlook and a record current account deficit--and the pressing need to fund the latter with foreign capital. But while the markets seem focused on the twin deficits, Bush and Kerry’s stated economic priorities are elsewhere, notes Informa. Bush has made Social Security reform a centerpiece of his second term, while a new round of tax reform would also be in the offing. Kerry, on the other hand, has health care as a major priority but if elected, he would face a Republican-held House and perhaps a GOP-led Senate to boot. The bottom line, says Informa: a fiscal policy stalemate, especially on taxes. The Bush income tax cuts don’t expire until 2010, while the lower tax rates for capital gains and dividends run until 2008.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.