With the election behind us, Congress now must address the automatic spending cuts and tax increases slated for early next year, as the Bush tax cuts sunset and the Budget Control Act of 2011 kicks into effect. Judging by the market reaction immediately after the elections, few investors think Congress will actually get anything done.

While leaders on both sides of the aisle have been making conciliatory noises, so far no one has put forward a concrete plan to lead the country away from the precipice. Most of the talk has been about hashing out a short-term workaround, deferring the real negotiation until the next Congress.

But the 113th Congress will look much like the 112th, and many of the representatives and senators are just passing the buck on to themselves. Untangling our tax code and rationalizing our social spending is going to be a huge job, so it’s easy to understand why Congress might want to buy itself more time. But given the urgency of the problem, the stock market is signaling there’s no time like the present for dealing with it. At the very least, Congress could begin laying the groundwork for a grand compromise sometime in January once the next Congress is in session. Unfortunately for us, however, a strong case can be made for neither side having much incentive to act. Republicans might dig in their heels on their no-tax-hikes demand. And since most social programs are largely unaffected by sequestration, Democrats can get both tax hikes and protect their priorities by basically doing nothing.

There isn’t much we can do at this point other than wait and see what happens. One can only hope that both sides see the wisdom in putting the best interests of the country first. In the meantime, you might want to consider cashing out of any big portfolio gains to avoid the possible bump in the capital gains rate in 2013. It’s widely accepted in policy circles that both tax increases and spending cuts will be required to address our deficit, so a higher capital gains rate seems a near certainty.

That said, I certainly don’t advocate getting out of the market altogether. The fact that you invest at all means you’re working toward some greater goal, whether that’s leaving a larger pool of wealth for your family or funding your own dreams. You’ll never meet those goals sitting on the sidelines, higher taxes or not.