Upper-income Americans may face a tax increase. Auto fuel economy standards might be raised. Stocks of construction and engineering companies could benefit.
America's decision to re-elect President Barack Obama over Mitt Romney will affect all that and other elements of the U.S. economy and financial system — from the health care law to the overhaul of financial rules.
At the same time, a gridlocked Congress will limit Obama's influence. Tuesday's election kept Republicans in control of the House. Democrats still control the Senate, but without a commanding majority.
Here's how Obama's re-election could affect key sectors:
Obama has laid out some key themes for rejuvenating the economy: Extend Bush-era tax cuts for low- and middle-income Americans. Spend more to build and repair roads, bridges and other public structures. Provide targeted tax breaks to businesses.
Most immediately, Obama needs to persuade congressional Republicans and Democrats to reach a budget agreement to prevent the economy from falling off a "fiscal cliff." Without a deal, deep spending cuts and tax increases will start to kick in next year.
The combination of those measures could send the economy back into recession and drive the unemployment rate back up to 9 percent next year, according to estimates by the Congressional Budget Office. The rate is now 7.9 percent.
Analysts warn that Congress must break its stalemate for the economy to sustain its recovery.
"There will be a lot of brinksmanship, and that will hurt the economy and likely upset the financial markets," Mark Zandi, chief economist at Moody's Analytics, said Wednesday.
Still, the urgency of the crisis could "generate the political will necessary to get the deal done," Zandi said. And that could mean "much, much stronger growth" by 2014.
Others caution that even if the fiscal cliff is averted, the economy may continue to be hampered by slow growth, stagnant pay and modest job gains.
"Obama's re-election does not change the bigger economic or fiscal picture," Paul Ashworth, an economist at Capital Economics, said in a research note. "Over the next couple of years, the U.S. economy will remain saddled with an uncomfortably high unemployment rate and will struggle to grow by more than 2 percent a year."
The president has pledged to cut projected deficits by $4 trillion over 10 years. He says he'd do so in part by raising the tax on investment gains. He would also raise income tax rates for individuals who earn more than $200,000 and married couples who earn more than $250,000. And a minimum 30 percent tax would be imposed on incomes above $1 million.
Stock prices plunged Wednesday in the aftermath of the election. Investors appeared rattled by the impending U.S. tax increases and spending cuts and Europe's deepening recession.
Over the long run, though, the stocks of construction and engineering companies might get a lift during Obama's second term. The president has said more spending on roads, bridges and public buildings will boost the economy. If Obama's victory helps Democrats gain seats in Congress, he'll have more support for such spending.
Other categories of stock might stumble. Financial companies had hoped to weaken rules imposed after the 2008 financial crisis. Obama's victory may ensure that the rules will remain intact. Companies will have to keep spending to make sure they comply with them.
Obama also wants to tax dividends at a higher rate. That could make financial stocks, which often pay high dividends, less appealing to investors.
Defense stocks might suffer because Obama wants to limit the growth of military spending. And some energy companies may fall because some investors think his administration will tighten pollution regulations that affect energy extraction and coal-burning power plants.
— AUTO INDUSTRY:
Obama will likely seek to further boost fuel economy standards. He's already raised the standards twice. This year, he required automakers to double their vehicles' average fuel economy to 54.5 miles a gallon by 2025.
Obama set an ambitious goal in 2011 to put 1 million electric vehicles on the road by 2015. Fewer than 30,000 electric cars have been sold in the United States this year. He wants to raise a $7,500 tax credit for electric cars to $10,000.
The president has asked the World Trade Organization to rule on Chinese subsidies for autos and auto parts and its import duties on U.S. autos. He's awaiting a decision.
The boom in U.S. oil and gas production during the president's first term will likely continue, thanks largely to new drilling techniques. But drilling could slow if the Environmental Protection Agency toughens rules governing a controversial technique called hydraulic fracturing.
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