D.C. forecast is grim, says politics watcher

James M. Delaplane Jr., chief of government relations at The Vanguard Group Inc., last week gave his take on what is likely to happen in coming months regarding taxes, deductions and reform. It wasn't particularly pretty. Speaking at the Retirement Income Summit, Mr. Delaplane said that no matter who wins in the elections in November, there likely will be no decision about extending the Bush tax cuts until the end of the year. He added that no significant legislative actions will be taken on new regulations until after the election, and even after that, it's a tossup. The longer-term tax picture varies wildly, depending on who wins in November and whether the same party rules Congress and the White House, Mr. Delaplane said. During a question-and-answer session, advisers struggled, without success, to get some good news out of Mr. Delaplane on the future of retirement plans, the Bush tax cuts or long-term tax reform. No matter who wins, taxes will likely go up, but the more branches of government controlled by the Democrats, the higher they'll go, he said. Mr. Delaplane gives President Barack Obama the “slightest of advantages” of winning in November, while he believes the House will stay Republican and the Senate is too close to call. It is possible, though not likely, that things will improve even with a split government, he said. “It could be that grown-ups might prevail, as President Obama begins to think about his legacy,” and House Speaker John Boehner, R-Ohio, is able to corral more members of his party. Just don't count on it, he said. lkuykendall@investmentnews.com