One could use countless words to describe 2012, but "inconsequential"
would not be one of them. Indeed, the year that we'll sing Auld Lang Syne
to was one of historic consequence: a billion-dollar presidential
election, a superstorm for the ages, a relentless drought, numbing and
tragic mass shootings.
As with every new year, the one that starts
Tuesday begins on a blank canvas. There will be no national elections
in 2013, no Olympics. The biggest celebrity birth will occur in a
foreign land: Kate Middleton, the Duchess of Cambridge, is expected to
deliver a royal child in July. Two major anniversaries stand out:
President John Kennedy was slain 50 years past. That same year, Martin
Luther King delivered his "I have a dream" speech.
will surely change our world, or perhaps simply rock it. Who predicted
the Beatles in 1964? The Apple computer in 1977? Or the financial
industry collapse in 2007? As Yogi Berra didn't say, but often gets
credit for, "It's hard to make predictions, especially about the
Yet 2013's significant events will have roots in 2012.
The "fiscal cliff" that arrives at midnight tonight was the result of a
law passed in August. President Obama and Congress agreed to automatic
tax hikes and spending cuts if a budget deal couldn't be worked out. The
election result of November - same president, same Congress - has to
this point resulted in deadlock
Economist Ken Simonson predicts
modest economic and job growth in 2013 - similar to last year's pace -
if a fiscal cliff disaster is avoided. He says the economy reminds him
of the Dr. Seuss story, The 500 Hats of Bartholomew Cubbins.
Every time Bartholomew removes his hat for the king, another one appears
beneath it. In other words, each month looks a lot like the last one.
Here is USA TODAY's look at five important issues to watch in 2013:
1. Harnessing energy
nation's energy boom shows no signs of slowing in 2013, and that's
great news for consumers, job-seekers and most businesses.
electricity costs will fall 2.2% next year after adjusting for
inflation, predicts the Energy Information Administration. Already low
natural gas prices for consumers will be flat, the EIA forecasts.
prices will drop more than 5% next year and rise less than inflation
for the next decade, the EIA estimates. Perhaps the angst of $5-a-gallon
gasoline will have to wait.
The techniques of horizontal drilling
and hydraulic fracturing - fracking - have made it possible to retrieve
oil and natural gas that is lightly spread underground over much of the
USA. Previously, oil companies focused on finding reservoirs rich with
"Today's drilling is a manufacturing process. It's
not about discovery," says Lucian Pugliaresi, president of the Energy
Policy Research Foundation. "Small advances in technology result in
large increases in reserves."
The USA should remain the
unchallenged leader in tapping energy reserves in non-traditional ways
in 2013 and beyond because of its technological leadership, he says.
U.S. oil production is up 24% since 2006 to the highest level since
the Alaska pipeline's heyday in 1996. Natural gas production is up 27%
since 2006 to its highest level since the EIA started keeping track in
This energy boom will help automakers and other energy-intensive manufacturers remain competitive worldwide in 2013.
Dozens of new power plants are being built to take advantage of cheap
natural gas and to replace heavily polluting coal plants. Example: An
$800 million natural gas power plant, nearing approval in western
Pennsylvania, will take more than two years to build and employ 500
The Tennessee Valley Authority opened an
$800 million natural gas plant in April so it could phase out two
coal-fired power plants ordered closed because of pollution.
The thorniest question next year might be: What to do with so much energy? Key decisions in 2013:
- Keystone pipeline.
President Obama will decide in the next few months whether to build the
Keystone XL Pipeline to move oil from Canada and North Dakota to
refineries on the Gulf Coast.
- Liquid natural gas. Obama
also must determine in 2013 whether oil companies can export liquid
natural gas to Asia, where it sells for more, or keep it at home so U.S.
manufacturers enjoy bargain prices.
- Environmental rules.
The Environmental Protection Agency will issue an initial report on
fracking soon, taking comments in 2013 and releasing a final report in
2014. The EPA's report will be largely advisory. States are the primary
regulators of oil and gas drilling.
- Fracking. The Bureau
of Land Management, which manages resources on federal lands such as
national forests, could finalize rules on fracking on federal lands.
2. Health care law ramps up
Affordable Care Act's big health care expansion is still a year away,
but the steps taken in 2013 will determine how well the controversial
This year's make-or-break deadline is Oct. 1. That's
when health insurance exchanges must be launched in all 50 states - a
revolution in how medical insurance is chosen. These exchanges will let
consumers shop online for health insurance policies, similar to an
amazon.com or travelocity.com for health insurance. Policies take effect
on New Year's Day in 2014.
Federal and state governments will
bring health insurance to as many as 30 million uninsured people. Some
parts of the law already have taken effect. But the most sweeping part
of it - universal health care - will depend on a huge effort in 2013 to
set rules, write computer programs, win cooperation from states,
recruit insurers and find the uninsured. Key decisions to watch this
- Medicaid. States must decide whether to join the
Medicaid expansion, a decision that has no clear deadline. Medicaid,
the health program for the poor, will expand to cover those with the
lowest incomes - about $32,000 or less for a family of four.
care exchanges. States must decide whether to run the exchanges
themselves, let the federal government do it or try a federal-state
partnership. The last deadline is in February, but states can change
their mind. Federal subsidies will help people who have higher incomes -
up to about $92,000 for a family of four - buy insurance on the new
Higher taxes to fund the law will take effect in 2013, including:
- A new 2.3% tax on medical devices such as pacemakers and ultrasound equipment.
additional 0.9% Medicare tax on wages above $200,000 for individuals
and $250,000 for married couples. The current tax is 1.45% for all
- An additional 3.8% tax on capital gains, dividends and
interest on income above $200,000 for individuals and $250,000 for
Will the exchanges be ready Oct. 1?
Dan Mendelson, chief executive of Avalere Health, thinks so. "The
bureaucracy will rise to the challenge because the risk and importance
to the president is so great."
3. Relentless drought grinds on
Meitl, 53, raises cattle in Dresden, Kan. He's finishing up a year of
withering drought, and he's not sure he can take another one.
Yet that's what's likely to happen.
nation's worst drought in decades shows no signs of subsiding in 2013.
The dryness, affecting 42 of 50 states, may have cost the USA as much
as $100 billion in 2012, even more than Superstorm Sandy.
continues as forecast, the drought is expected to cause additional
billions of dollars in losses for Midwest farmers and shipping along the
Mississippi River, raise food prices and heighten concerns about water
shortages in the arid West.
On his ranch, Meitl sold more calves
than usual as soon as they were weaned. He also was forced to buy feed
for his cows; normally they would survive on grass until early February.
If conditions remain dry through March and April, Meitl says, he'll
have to start selling cows.
And if you think the worst is behind us, think again.
Janssen, a professor of agricultural economics at South Dakota State
University, says the next year of drought could be even more damaging:
"The big concern is that we've largely exhausted our subsoil moisture
reserves going into the spring."
Unless that moisture is
replenished, corn, soybeans and other crops will be affected again next
year, Janssen says. Because some farmers have had to cull their cattle
and hogs, he says it will take time to rebuild breeding stock and dairy
herds. Those are the ingredients for higher food prices.
For a massive portion of the nation - almost every state west of the
Mississippi - drought is forecast to continue throughout the winter,
according to long-range forecasts from the Climate Prediction Center in
College Park, Md.
This drought rivals the 1988 and 1950s droughts
but thankfully is not as severe as the Dust Bowl that gutted agriculture
and tormented millions of people in the 1930s.
4. Housing gains strength
home fires are burning brighter. Housing's comeback is still young, but
unlike recent years, the industry is feeding the economic recovery
instead of starving it.
Home prices are up 4.3% for the 12 months
ending in October, the Standard & Poor's Case-Shiller index shows.
November's existing home sales hit their highest level in three years.
Foreclosure starts that month were the lowest in almost six years,
Forecasters are more upbeat, too. Home prices
will rise 3.1% next year, says a panel of 100 economists and real estate
experts recently surveyed by market watcher Zillow. In September,
they'd predicted a 2.4% rise for next year.
A healthy housing
industry is vital to the economy because it's an engine of job creation
and spending in construction, building materials, remodeling and other
Still, big challenges remain.
New home sales, up
nearly 20% this year from 2011's record low, aren't likely to reach
normal levels until 2015, says economist Patrick Newport of IHS Global
Even with increases, home prices are down 30% from their
2006 peak. More than 10 million homeowners still owe more on their
mortgages than their homes were worth, CoreLogic says.
nation topples over the fiscal cliff, and recession returns, home buyer
optimism will probably slide with the economy. There's also concern that
interest rates, driven to historic lows by Federal Reserve policy, can
goose sales only so much. The rest will depend on job growth, which has
been slower than in past recoveries.
Even so, barring big economic
shocks, the housing sector is poised to continue strengthening next
year. Things "will be better than this year, but it still won't be a
strong housing market," Newport says.
5. Overcoming Sandy's wrath
Major's FunTown Pier amusement park, active in Seaside Heights, N.J.,
since 1980, lies in ruins, more than two months after Superstorm Sandy's
assault on the Jersey shore.
Major doesn't know whether he can
bring back the boardwalk business at the edge of the Atlantic Ocean.
Everything depends on how much his insurance company pays.
thing's certain as he thinks about the collapsed boardwalk, mangled
rides and a teetering Ferris wheel: "No matter what, we have to clean it
Major is one of thousands of homeowners and business owners
in New Jersey, New York and other states still coming to terms with
Sandy. They're hoping 2013 will see them finishing the job of clearing
debris, rebuilding homes and businesses and restoring treasured beaches,
even as this national tragedy becomes a regional recovery.
Army Corps of Engineers and local agencies are still cataloging the
hundreds of damaged and destroyed homes and other structures slated for
In part, numbers tell the story of the long slog that
storm victims face. President Obama is asking Congress for $60.4
billion in federal money for storm relief.
Cleanup remains a
monumental task. New Jersey alone must deal with more than 6.2 million
cubic yards of debris - enough to fill the old Giants Stadium 2½ times.
crews are assessing how to remove debris - including entire houses -
from wetlands, says Brandon Beach, spokesman for the Federal Emergency
In some barrier island communities isolated by
washed out or impassable roads after the storm, cleanup is barely
underway. In other cities, the first stages of curbside pickup have just
given way to the second phase: demolishing and removing badly damaged
Yet as with many tragedies of this magnitude, stories
of resilience and fortitude are what carried the region forward in the
waning months of 2012 while inspiring people across the nation.
Fundraisers to help the victims of Sandy steered millions of dollars to
people who might have otherwise shivered through the holidays, and
volunteers helped their fellow citizens with an urgency often reserved
May 2013 usher in new hope and perhaps a sense of
renewal for New Jersey, New York and the millions of lives upended by
Contributing: Doyle Rice, Meghan Hoyer and Marisol Bello of USA TODAY