Few things are ever clear in Washington. But politicians generally hope to keep their jobs, which leads them to behave a little better during an election year—and 2014 shapes up as big for both parties.
Battles over the Affordable Care Act, the debt ceiling and the budget have left both sides scarred. Next year they will have to play nice—or at least nicer—to hold or win ground in the midterm elections. That's welcome news for investors, who though they may have scored big gains in the stock market this year, had to weather some nasty crosscurrents along the way.
The first step was taken Tuesday when a bipartisan budget agreement was announced by Sen. Patty Murray, D-Wash., and Rep. Paul Ryan, R-Wis. It brings some stability to Congress's fiscal policymaking. "I see very positive themes coming out of Washington in 2014," said Greg Valliere, chief political strategist at Potomac Research Group. Unlike a year ago, Valliere said, there is little chance of a significant tax increase or a government shutdown or debt crisis. Meanwhile, the budget deficit continues to fall, which should help keep interest rates from spiking as the Federal Reserve unwinds its massive bond-buying program. Here's how Washington stands to impact your portfolio in 2014.