With Republicans regaining control of both houses of Congress following Tuesday's elections, look for changes in both short-term and long-term economic plans, said Newport Communications Senior Economist Jim Haughey.

"The political agenda in Washington now shifts abruptly back to the early 2001 Bush program after a year of gridlock with a divided Congress," Haughey said.
"The first impact will be a small boost to confidence and spending, since investors, business managers and wealthy consumers like the election results," he predicted. "The amount of change in stock market indexes in the next few weeks will measure how much of a boost."
Haughey predicts homeland security and defense spending will grow a little faster because Bush got a green light from voters on these issue, but he notes this also means the United States moves a little closer to a conflict with Iraq.
"The cautious Europeans who have delayed UN action now know that Bush will not be forced to back down by domestic dissent," he said. "This is ominous for fuel prices in the winter and spring, but availability should not be a serious problem."
He believes the new Congress will return to the Bush legislative agenda in 2003, resulting in economically significant legislation in several areas.
"Expect Congress to reduce barriers to added oil production in Alaska and in offshore areas," Haughey said, noting that this will not impact pump prices for at least two years. The new Senate will also confirm many of the dozens of judicial nominations that have been on hold for up to a year. Haughey says this will result in less cost for business and likely in smaller and fewer liability judgments, which is good news for liability insurance rates. In addition, he predicts that the senior drug benefit stalemate will be resolved with a privately managed solution, and the spillover will restrain costs increases on employer financed health plans.