Why the Next Few Months Are So Crucial
If your firm is a contractor to a federal agency, or does work for state or local government agencies that receive federal funds, or if you are just a taxpayer, there are a number of deadlines, milestones and actions in the coming weeks and months that deserve your attention. They will impact task orders, cash flow, the volume of work under those contracts, and your taxes.
Over the next six months, the following will occur, and many will directly impact your firm.
The new fiscal year starts today, October 1. Congress failed to enact regular appropriations bills, so a "continuing resolution” to fund government activities and functions through March 27, 2013, was passed. At that time, the new Congress will have to decide on spending levels for the remainder of the fiscal year.
On Nov. 7, an election for president, all 435 seats in the U.S. House, 33 seats in the U.S. Senate, as well as numerous governors, state legislators and local offices will be on the ballot.
After the election, the current Congress will return to Washington for a "lame duck” session. But it will have fewer than 19 days to consider legislation.
Numerous tax provisions expire on Jan. 1, 2013. Consideration of these tax provisions will be a top priority for the lame duck Congress. Many economists fear that failure of Congress to act on preventing automatic increases in taxes will result in a double-dip recession.
In addition to the expiring tax provisions, a number of new taxes included in the Affordable Care Act (health care law) go into effect beginning Jan. 1, 2013.
When Congress and President Obama finally reached agreement on a debt limit increase in the summer of 2011, they put in place a process that will result in an automatic "sequestration,” or budget cuts, of $1.2 trillion over 10 years, scheduled to go into effect on Jan. 2, 2013, unless Congressional action is taken prior to that date to avert the sequestration.
The prospect of these tax and spending changes has been deemed a "fiscal cliff.”
In January 2013, a new Congress will be sworn into office, a president, regardless of who wins on Nov. 7, will have an Inauguration, and a State of the Union address will be given to Congress.
Whether Mitt Romney is elected, bringing in a new administration, or Barack Obama is re-elected, prompting a turnover in cabinet members and other political appointees, the Senate will be faced with numerous confirmation hearings and votes.
Once January turns to February, the president’s fiscal year 2014 budget must be presented to Congress. And the debt limit, which was increased in a contentious showdown in the summer of 2011, is expected to be reached once again, requiring a vote in Congress estimated to be in February or March.
Are you paying attention? MAPPS staff will continue to cover activities related to all these important actions. Stay engaged and stay informed.