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Watch The Change Not Happen

One of the things that happens when power shifts in Washington is that people expect far more change than actually occurs. New officeholders may talk loosely about change, but the underlying forces driving the status quo haven't changed, and neither will the policies.

Two New York Times stories published today illustrate this quite nicely. The first is about corporate tax reform. President Obama and some members of Congress have discussed reforming the corporate tax code, which has high nominal rates but enormous loopholes. The trouble is, people who benefit from the loopholes don't want to reform the system:

But recent efforts to rationalize the code all have failed, and some members of both parties express skepticism that this time will be different. The problem, in a nutshell, is that the popular step of lowering taxes for industries like trucking requires the unpopular step of raising taxes for industries like biotech.
The very idea is already drawing howls from the corporate sector.
Moreover, many of the individual exceptions that allow corporations to shield profits from taxation actually enjoy broad popularity, like tax breaks to support domestic manufacturing, low-income housing and green energy.

Guess what? The interest of the companies benefiting from loopholes outweighs the interest of the companies that would like lower rates. If nothing else, loss aversion will drive the loophole beneficiaries to lobby harder than non-beneficiaries. My prediction: nothing happens.

Meanwhile, you know how Tea Party candidates were talking about trimming wasteful defense spending? That isn't going to happen either:

To hear the Republican leadership tell it, the once-sacred Pentagon budget, protected by the party for generations, is suddenly on the table. But a closer look shows that even as Speaker John A. Boehner and Representative Eric Cantor, the House majority leader, insist on the need for military cuts, divisions have opened among Republicans about whether, and how much, to chop Pentagon spending that comes to more than a half trillion dollars a year. ...
So far, few Tea Party-backed members on the House Armed Services Committee have said specifically where they would cut. In public remarks at the hearing on Wednesday, several spoke up in favor of favorite military programs or of protecting military installations at home, illustrating the difficulty of balancing their overarching philosophy and goals with the immediate concerns of their districts.

Guess what? Wasteful defense spending exists because it creates jobs in somebody's congressional district. That hasn't changed. My prediction: very little happens.