This week’s Annual Meetings of the World Bank and IMF will have a lot of discussion but little action. Here are five things that I anticipate will capture some headlines.
The news shows this weekend were filled with optimism from across the political spectrum that the congressional budget conference, which begins Wednesday, will produce a deal. I am skeptical. The aim of the conference will be to find agreement on spending for the remainder of FY14 at levels of spending above those that resulted from the 2011 Budget Control Act and the failure of the “super committee” (enforced by sequestration, or “the sequester”). All factions are united in their distaste for the sequester, which cuts too deep and too broadly across both defense and domestic areas. But there is little consensus on what to do about it, and no ideas about how to bridge the fundamental divide between Democratic calls for more revenue and Republican insistence that the focus be on entitlement reform. At this point, the most likely scenario is that a deal on spending will come in January, not December, and will be at (or very near) sequester levels of spending.