|The Associated Press|
Upper-income Americans may face a tax increase. Auto fuel economy standards might be raised. Stocks of construction and engineering companies could benefit.
America's decision to re-elect President
At the same time, a gridlocked
Here's how Obama's re-election could affect key sectors:
Obama has laid out some key themes for rejuvenating the economy: Extend Bush-era tax cuts for low- and middle-income Americans. Spend more to build and repair roads, bridges and other public structures. Provide targeted tax breaks to businesses.
Most immediately, Obama needs to persuade congressional Republicans and Democrats to reach a budget agreement to prevent the economy from falling off a "fiscal cliff." Without a deal, deep spending cuts and tax increases will start to kick in next year.
The combination of those measures could send the economy back into recession and drive the unemployment rate back up to 9 percent next year, according to estimates by the
Analysts warn that
"There will be a lot of brinksmanship, and that will hurt the economy and likely upset the financial markets,"
Still, the urgency of the crisis could "generate the political will necessary to get the deal done," Zandi said. And that could mean "much, much stronger growth" by 2014.
Others caution that even if the fiscal cliff is averted, the economy may continue to be hampered by slow growth, stagnant pay and modest job gains.
"Obama's re-election does not change the bigger economic or fiscal picture,"
The president has pledged to cut projected deficits by
Stock prices plunged Wednesday in the aftermath of the election. Investors appeared rattled by the impending U.S. tax increases and spending cuts and
Over the long run, though, the stocks of construction and engineering companies might get a lift during Obama's second term. The president has said more spending on roads, bridges and public buildings will boost the economy. If Obama's victory helps Democrats gain seats in
Other categories of stock might stumble. Financial companies had hoped to weaken rules imposed after the 2008 financial crisis. Obama's victory may ensure that the rules will remain intact. Companies will have to keep spending to make sure they comply with them.
Obama also wants to tax dividends at a higher rate. That could make financial stocks, which often pay high dividends, less appealing to investors.
Defense stocks might suffer because Obama wants to limit the growth of military spending. And some energy companies may fall because some investors think his administration will tighten pollution regulations that affect energy extraction and coal-burning power plants.
— AUTO INDUSTRY:
Obama will likely seek to further boost fuel economy standards. He's already raised the standards twice. This year, he required automakers to double their vehicles' average fuel economy to 54.5 miles a gallon by 2025.
Obama set an ambitious goal in 2011 to put 1 million electric vehicles on the road by 2015. Fewer than 30,000 electric cars have been sold in
The president has asked the
The boom in U.S. oil and gas production during the president's first term will likely continue, thanks largely to new drilling techniques. But drilling could slow if the
Obama backs the idea of a federal clean-energy standard that would require the country to use more low-carbon energy sources, such as wind and solar for electricity and advanced biofuels and batteries in cars.
But Republican opposition is so strong it's doubtful Obama could muster enough support in
— HEALTH CARE:
Obama's victory preserves his health care overhaul, which aims to cover millions of uninsured Americans. The law requires everyone, with certain exceptions, to have health insurance or pay a penalty. It calls for the expansion of
Health insurers that have struggled to increase enrollment in a tough economy will gain millions of new customers through the overhaul's coverage expansions. But the industry pays for that growth. Insurers will have to cover annual fees totaling
Among other restrictions, the law also limits how much insurers can vary pricing based on age and health.
Drugmakers and hospitals may also get a boost. Hospitals typically provide charity care to uninsured people and are reimbursed for only part of it. Now, they'll be paid through insurance for more people. And drugmakers will benefit from the law because starting in 2014, millions more will gain prescription coverage.
But the industry also faces new costs. Drugmakers will have to give the government rebates on drugs bought through
"In the past, it was relatively easy to just absorb increases in health care costs and pass them through to customers via higher premiums," said
— FINANCIAL REGULATION:
The 2010 overhaul of financial rules marked a victory for Obama. Officials who are still carrying out the details of the law may now be more likely to take a tough stance.
One example is an oversight plan for derivatives — complex investments that speculators use to make bets and companies use to hedge against risk. Financial companies have fought for looser rules and exceptions for derivatives used by farmers who want to lock in prices before a harvest.
Obama's victory means financial companies, which mostly backed Romney, might lose influence in these negotiations. His re-election also figures to embolden the
Republicans want to give
Obama signed into law the America Invents Act to streamline the U.S. patent process. The idea was that inventors and entrepreneurs could turn their ideas into products more quickly and create inexpensive ways to resolve disputes.
Despite the law, major technology companies such as
The president so far has resisted pressure to lower or temporarily waive corporate income taxes on the more than
Some of the biggest hoards of foreign cash are held by
Obama hasn't ruled out a tax holiday. But he's indicated he'd consider it only as part of a broad tax overhaul.
Contributing to this report were
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