The U.S. economy has shined of late, with GDP expanding an annualized 3.9 percent in the third quarter.
But fiscal and political uncertainties threaten to upset the apple cart, according to New York Times reporter Jonathon Weisman
Congress must approve additional spending for the government by Dec. 11 or it will shut down. And some conservative Republicans are reluctant to keep the government funded in light of President Obama's order last month to ease immigration restrictions.
Meanwhile, a group of business and personal tax breaks expires Jan. 1, and Medicare's physician reimbursements will plunge March 28 unless Congress takes action.
The highway trust fund is expected to run dry May 31, and the Export-Import Bank will shut in June without action by Congress. The debt limit may be reached sometime after March 16.
"Investors should prepare for a return of this type of behavior [budget fights] and volatility in Washington in 2015 as governing-by-crisis appears ready to return," Chris Krueger, an analyst at Guggenheim Securities, wrote in a commentary obtained by The Times.
"From a businessman's standpoint, uncertainty in general just has a huge impact in how you think of the future, how you plan for capital investment and how you plan for hiring," Randall Stephenson, chairman of AT&T and of the Business Roundtable, told Weisman. "Just go down the long list. There's a wide range of possible outcomes on policy, so you have to come to a more conservative approach to planning."
The budget deficit has shrunk to 3 percent of GDP from 10 percent five years ago. The Congressional Budget Office expects the deficit to bottom next year and then gradually rise.
"The trend [for the deficit] will be up again as the population continues to age and retirement and healthcare costs grow," Jim O'Sullivan, chief U.S. economist at High Frequency Economics, wrote in a commentary obtained by Fortune
"Similarly, the debt-to-GDP ratio will start moving up again within a few years." That ratio now stands at 103 percent.
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