News digest: Economy picks up, health reform sticks, 1099 measure repealed

Filed under Economy, Governance & Legal, Manufacturing, News

Health care reform stands, while Senate repeals 1099 provision. The Senate defended health care reform Wednesday, averting a repeal while voting to remove a provision in the Patient Protection and Affordable Care Act that would require small businesses to file a 1099 tax form for every purchase of more than $600, the New York Times reported.  The vote took place during an effort by Senate Republicans to repeal the entire health care reform legislation, but that bid was defeated 81 to 17, the Times said.  The repeal of the smaller provision is good for small business owners, said John Arensmeyer, chief executive of the Sausalito, Calif.-based Small Business Majority, in a statement Wednesday. “The 1099 provision, which has nothing to do with health care reform and was only included as a revenue-generating measure, would burden small businesses,” he said. Other provisions of the act could help lower health care costs for small business owners, he said.

Small businesses still skeptical about economy. While two-thirds of small business owners say they are confident about the future of their own business, they are less bullish about the overall economy, according to the National Small Business Association’s 2010 year-end report.

Four in ten surveyed said they believed the economy hasn’t changed in the last six months and nearly two-thirds don’t expect it to change in the coming year, the report said. More than two-thirds said economic uncertainty was the most significant challenge to growth and survival of their business, down 7 percent from July’s mid-year report.  Despite the uncertainty, 39 percent reported increased revenue, up from 26 percent in July.

Top issues: The report also highlighted the top issues among business owners: the national deficit, tax burdens, the cost of health care reform, regulatory burdens and access to capital.

Economy off to a strong start. Multiple reports on January’s economic activity indicate a strong start for 2011, Reuters reported Thursday. The U.S. service sector experienced its fastest growth in January in more than five years, indicated by a reading of 59.4 on the Institute for Supply Management’s index of national manufacturing activity. Readings over 50 signal service sector expansion, the article said. “Momentum from the end of 2010 is carrying over. It will be another year of recovery and repair,” Robert Dye, senior economist at PNC Financial Services in Pittsburgh, told Reuters.

Labor force largely unchanged. Lower than expected January job growth disappointed analysts, the New York Times reported Friday. While analysts had forecasted an improvement of 145,000 new jobs, the Department of Labor reported 36,000 new jobs were added in January, a decline from recent months as winter weather impacted construction and transportation jobs. Federal Reserve Chairman Ben Bernanke told Reuters that with employers still hesitant to hire, it will be “several years” before the United States sees a return to normal unemployment levels. Unemployment fell to 9 percent in January, the lowest level since April 2009, according to the Bureau of Labor Statistics. That figure reflects fewer people filing for unemployment, though the labor force was largely unchanged.

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