In just a few months, we should know whether the Patient Protection and Affordable Care Act will become law or become extinct.

The U.S. Supreme Court has announced the 2012 dates and agenda for oral arguments in the lawsuits challenging the validity of the act:

• On March 26, the court will hear arguments on whether there are grounds for abolishing the Act’s individual mandate provision before the mandate actually goes into effect in 2014. Attorneys for the Obama administration are arguing that opponents would have to wait until the provision takes effect before petitioning the court. The court has allocated one hour for this argument.
• On March 27, the court will hear arguments on whether Congress had the constitutional power to pass the individual mandate provision. The Court has allocated two hours for this argument.
• On March 28, the Court will hear arguments on whether, if the individual mandate provision is unconstitutional, the entire act must be invalidated. The Court has allocated 90 minutes for this argument.
• On March 28, the Court will also hear arguments on whether Congress exceeded its powers by requiring states to expand Medicaid coverage or lose federal funding for Medicaid programs. The Court has allocated one hour for this argument.

For a summary of the cases and challenges leading up to the Supreme Court case, go to the website of the legal firm of Ford & Harrison.

As most know by now, President Obama signed a bill that extends the tax break on the employee portion of the Social Security Old-Age, Survivor and Disability Insurance (OASDI) for the first two months of this year. But many don’t know about one small stipulation in the bill.

Specifically:

• There’s no cap on the amount that is subject to the reduced 4.2% withholding rate during January and February, other than the 2012 annual wage base ($110,100). So employers will not have to insert a new limitation in their payroll systems.
• However, if an employee’s wages during January and February exceed $18,350 (two-twelfths of $110,100), then, unless the payroll tax reduction is further extended for the remainder of the year, the reduction in the amount withheld from those excess wages (2%) will be added to the employee’s income tax liability for 2012.
• Self-employed persons receive the same benefit. The rate of self-employment tax remains at 13.3% (instead of 15.3%) for 2012, but only on the first $18,350 of self-employment income, reduced by any amount of wages received by the self-employed individual during January and February.

Note: Self-employment earnings can be subject to the reduced rate even if not earned in January or February, though the reduced rate would still apply to no more than $18,350 of self- employment income, which is the equivalent of two months’ share of the annual maximum.

President Obama’s proposal has some major implications — tax and otherwise — for business.

Here’s a look at three major points in the president’s American Jobs Act and four related measures:

• Equipment deduction. Businesses would get a one-year extension of the tax break that allows a full dollar-for-dollar deduction for all equipment purchases.
• Payroll tax cuts. All businesses with annual payrolls up to $5 million would see the payroll tax cut in half, from 6.2% to 3.1%. Plus, business would get a payroll-tax holiday on wages paid to new hires.
• Employer tax credits. Businesses that hire an applicant who’s been out of work at least six months will get a tax credit of up to $4,000 per hire.

In addition to those three, the president has proposed:

• raising $105 billion plus private-sector money to go toward infrastructure projects, such as modernizing roads, bridges and schools
• providing $35 billion to local governments to prevent layoffs of teachers and emergency personnel
• cutting the employee portion of payroll taxes – on earnings up to $106,800 — from 6.2% to 4.2% for all of 2011 and a further cut to 3.1% in 2012, and
• spending $45 billion to extend unemployment benefits and provide job training to the long-term unemployed.

Sources: Associated Press, Congressional Record, New York Times.

The study, which the Wall Street Journal conducted in conjunction with NBC News, found the bulk of pessimism was due to rising gas and food prices, while a stunning 64% claimed President Obama was either “not responsible” for the current economic mess or only “somewhat responsible.”

Nearly 70% of Americans claimed they’d been significantly effected by the increase in gas prices. Meanwhile, more than a third of respondents said their economic situation had gotten worse in the last year, while only 20% claimed their situation had actually improved.

Nearly 40% of Americans take the conservative view that cutting federal spending will help the economy, while 31% believe federal spending is actually helping the economy long-term.

Finally, 46% believe there should be less government interference in business – a belief that reflects the mass deregulation of the aughts that many feel contributed to the recession in the first place.

Source: “$4-a-gallon gasoline contributed to Growing Pessimism on Economy,” by Neil King, Wall Street Journal, 6/6/11.

After the Senate voted to repeal the 1099 provision in the Patient Protection and Affordable Care Act, President Obama said he would sign the repeal into law. Had the repeal not passed, all businesses would have had to file 1099 tax forms beginning in 2012 for all purchases over $600.

As part of the repeal, Congress also killed a requirement in the small-business lending bill that would have forced recipients of rental income to distribute and file 1099 forms for annual payments over $600.

• a lot of the language included in the bill was so dense that companies which didn’t have an entire legal team at their disposal weren’t in a position to fully understand, or take advantage of, most of its provisions, and
• several of the programs implemented as a result of the act weren’t put in place quickly enough to keep small businesses from bleeding substantial revenue (or going under altogether).

Despite that, there are three areas where most small business owners agree the act has had a positive impact:

1. Elimination of excess fees on federal loans: With so many banks refusing to lend to small businesses, the stimulus provided a huge break by streamlining the process, and waiving all excess fees on small business loans, so companies didn’t have to worry about digging themselves deeper into debt in order to secure loans (the Small Business Association approved $22 billion in loans between Feb. of 2009 and Aug. of 2010).
2. Tax breaks: The stimulus provided huge tax relief to small businesses, helping them collectively save millions of dollars over the past two years. In many cases, that money was reinvested in the company, creating additional revenue.
3. Percentage of government contracts awarded to small businesses: Perhaps the most valuable provision was a mandate that at least 23% of annual government contracts be given to small business owners. Last year, a third of all government contracts were awarded to small companies.

Source: “Small Businesses Weigh Recovery Act,” by Emily Maltby, Wall Street Journal, 2/24/11.

All signs are pointing to a slow but steady economic recovery, but most business leaders are watching for signs that their costs could go up. With IT, that could be the case in the coming year.

It all amounts to a domino effect that begins with increased federal spending and ends with higher IT costs for business. That’s because while Congress may be in a budget cutting mood, President Obama will actually be adding to the money spent on cybersecurity in the coming year.

Whether its the fallout from the Wikileaks documents or the attack on Iran’s nuclear facilities that are prompting the move, the administration is looking for “considerable growth” in cybersecurity research.

When all the projects and proposals are added up, cybersecurity research and development spending by the government will increase 35% to $548 million next year.

This will also likely mean a boost in IT jobs and spending with tech companies, so the industry as a whole will get a much-needed boost.

But the news isn’t great if you’re trying to hire IT talent. While most business will benefit from better cybersecurity measures that will likely come from the spending, it’ll also have to compete for IT talent from the same pool that the feds will draw from. That could make tech salaries rise and workers tougher to come by.

And the requirements have nothing to do with healthcare!

The provision in question: The expansion of IRS Form 1099 reporting requirements for all vendor purchases over $600 that are slated to kick in on Jan. 1, 2012.

A new amendment to repeal that portion of the law passed the Senate two weeks ago, and now the House Ways and Means Committee has green-lighted H.R. 4, The Small Business Paperwork Mandate Elimination Act of 2011.

Even President Obama has admitted that he would support a repeal of this intended revenue-generator to ease the burden on small business. So if it gets to his desk, chances are good it will be signed.

You’re probably thinking: It’s about time. This is the first good news on this front.

Small business advocates balked the minute the health reform law was passed, highlighting how tough this particular provision would be on businesses, especially smaller ones, to track all their purchases for each and every vendor that once they crossed the $600 threshold. (Not to mention the massive task of year end information reporting your Accounts Payable department would be saddled with!)

But until now, two previous attempts at legislation to repeal the 1099 expansion have been batted down.

This one looks like it may finally take hold. Your best bet: Some cautious optimism at this point.

Stay tuned — we’ll update you as soon as there are any new developments.

Here are the top 10 Business Brief stories for 2010, as chosen by our readers:

1. A profile of an employee who’s most likely to steal.

2. Obama tries back-door approach to unionization.

3. 8 big changes in Obama’s new small-biz bill.

4. Feds take away key health savings on Jan. 1.

5. 3 out 5 employees say they’ll work harder if …

6. Feds issue final Form I-9 rules.

7. Court ruling: You can kick unions off your property.

8. Obama extends med-leave rights to domestic partners.

9. 5 audit areas the feds are targeting this year.

10. The hidden biz effect of health reform: Back-office burden.

You hear it every day in the office, the break room, at the water cooler, on the radio and TV: “What Obama needs to do is …”

What follows usually has something to do with a range of topics, including: health care, unemployment, the deficit, Afghanistan, spending, equal rights, the housing market, or any other number of topics that have a direct (or indirect) impact on the economy.

With that in mind, the New York Times has created “The Budget Puzzle” – an interactive game that allows you to reallocate, redistribute, redirect, or wipe out spending for a number of different initiatives.

Among the choices players have:

• Adjust the amount of aid given to foreign countries
• Adjust farm subsidies
• Reduce public sector jobs
• Cut federal aid to states
• Reduce military spending (in a number of different ways)
• Make cuts to Federal healthcare spending
• Raise social security costs (or lower the amount paid out)
• Choose from a number of different tax cuts and increases,
• and a lot more.

The game basically gives players the same kind of bird’s eye view the current administration has over the economy, then gives them the freedom to choose their own economic recovery plan (without the stress or consequences of long- or short-term failure).

Once you’ve chosen which cuts or adjustments to make, you can save your economic plan, post it online, and/or e-mail it to friends and colleagues, and have them compare and contrast their ideas with yours.

To play the New York Times‘ “Budget Puzzle” game, click here.

President Obama has signed into law the latest attempt to jumpstart the economy. To take advantage of some of the benefits, you’ll have to act fast. 

The Small Business Jobs and Credit Act of 2010 has incentives for companies of every size, not just the small ones.

But you will need to get moving — the changes are effective immediately. In fact, some are only good for the remainder of this year.

Check out the eight biggest changes to come out of the new law to see what your organization can take advantage of:

1. More Section 179 expensing. If you have any large purchases planned, pull the trigger this year or get them in next year’s budgets. For Tax Years 2010 and 2011, the limit will now be $500,000. (The dollar-for-dollar phaseout doesn’t start until purchases exceed $2 million.)
2. More property that counts (at a smaller cap). If leasehold-improvements, restaurant- or retail-improvements are on your list of initiatives, you can expense up to $250,000 of it.
3. A (brief) extension of bonus depreciation. Even if you’re not eligible for Section 179 expensing, you can take advantage of this tax break. All businesses can recover the costs of qualifying depreciable property they buy in the remainder of 2010 more quickly by immediately deducting 50% of the cost.
4. A biz-tax carryback. Looking for a break on this year’s taxes? Certain small businesses can “carry back” their general business credits to offset five years of taxes while also allowing these credits to offset the Alternative Minimum Tax.
5. Capital gains relief. Never mind the 75% exclusion of capital gains on key small biz investments. The new law eliminates all capital gains taxes on these investments if held for five years.
6. Fewer substantiation headaches on a key tech purchase. Your finance department will be relieved to know cell phones were removed from the definition of “listed property” subject to tighter substantiation requirements and special depreciation rules.
7. More Small Business Association (SBA) loans available. You can enjoy two changes on this front. First, SBA recovery loans were extended, and second, the maximum SBA loan size was doubled.
8. New loans from small and community banks. The biggest selling point of this part of the law, though, was the $30 billion dollar small biz lending fund. One caution: Those dollars only go to community and smaller (healthy) banks that want them. Informal polls of these target banks show little interest in getting on board thus far. That could mean new financing for you or your small business customers isn’t quite as much of a done deal as it was presented to be.

Info: For the full text of the law, go to  http://www.opencongress.org/bill/111-h5297/show

This one presented a real dilemma — and a major irritant — for employers that pondered switching health plans to save money. The health-reform law stipulated that if you did switch, you had to pick a new plan that provided added services, including preventive care — meaning, of course, that your costs would go up.

A White House official told Bloomberg News that President Obama is considering scrapping the added-service rule and allowing “grandfathering”: permitting businesses with existing health plans to switch as long as the move doesn’t result in lower levels of benefits for employees. A ruling on the idea could come sooner rather than later, as the White House wants to look more business-friendly at elections time.

Follows two other rulings
The possibility of the ruling follows two other business-friendly changes to the initial health law:

• Groups and companies were exempted from a requirement that would raise minimum annual benefits for low-cost health plans used to cover about 1 million part-time or low-wage workers — a change that got a lot of support from the likes of fast-food giant McDonald’s Corp.
• A change in tax-reporting rules got delayed by a year to give businesses a chance to adjust.

President Obama recently rolled out his plan to boost business — and, presumably, hiring. Will it work?

Here are the details:

• Extending the “Bush tax cuts”: If you’re an individual making more than $200,000 a year or a couple making more than $250,000, expect your tax rate to rise.  Those income levels represent the cutoffs for keeping your tax rate at current levels. Anyone above that can expect the rate to go to pre-2001 levels.
• Offering tax credits for business research and experimentation: The news is good here. Congress has had to periodically renew the tax credits for research and experimentation — in fact, the credit died earlier this year. The president wants to renew the credit and make it permanent.
• Getting write-offs for equipment: Under the proposal, businesses would be able to take a full write-off for equipment purchases through 2011. This one looks like a no-brainer, as both parties and most business groups favor it.
• Appropriating infrastructure funds. The president wants $50 billion immediately to build roads, air traffic control systems, waterways and more — and give a boost to companies in those industries.

OK, the big question: Will it pass Congress? Even administration officials concede that it could be well past Election Day before any of this gets signed into law.

President Obama has announced he’s extending benefits under the Family and Medical Leave Act (FMLA) to domestic partners caring for ill loved ones or newborns.

Think you missed a new law? There was none.

According to insiders at the Department of Labor (DOL), this latest expansion is merely a “new interpretation” of the decades-old law.

In fact, the DOL just issued a formal Administrator’s Interpretation clarifying the term “son or daughter” as far as FMLA eligibility to care for a child after birth.

The new and expanded definition of a caregiver now includes:

• unmarried partners
• stepparents
• same-sex partners, and
• grandparents.

Basically, your company’s new filter for eligibility is anyone who intends to provide day-to-day care and/or financial support now qualifies. (DOL Administrator’s Interpretation No. 2010-3)

Prepping for more requests

Of course, while you want all employees to have equal coverage, there’s no denying the FMLA is an extremely expensive and cumbersome law, especially for small businesses.

In light of this new extension, there’s no better time to make sure you can handle the absences. That means ensuring that employees are cross-trained and that all supervisors have contingency plans in place in the event staffers are out for extended periods of time.

It’s also a great idea to double check that your FMLA request policies are crystal-clear.

Info: www.dol.gov/compliance/topics/benefits-leave-FMLA.htm

1. Employment: A lot of job creation has been temporary, and when there are jobs popping up in certain markets, it seems as if they’re almost immediately canceled out by layoffs somewhere else. With some of the largest states in the country still fighting exorbitant unemployment rates and stimulus jobs (as well as census jobs) drying up, what will it take to fix the job market?
2. Housing: Things are still dismal despite a bright spot here and there. New home sales have fallen off a cliff and prospective homeowners are afraid to buy with so much uncertainty surrounding the economy. What does the housing market need to get back on its feet and what steps should be taken to fix it?
3. Credit: Banks aren’t lending, consumers are afraid of borrowing, the government is clamping down on credit regs, and independent, high-interest loan companies are in a position to bleed consumers dry. The overall effect is a credit market that’s still in complete disarray. How can small business owners secure the loans they need to grow? How can the credit market right itself so consumers and business owners feel secure borrowing?
4. The stock market: It’s up, it’s down … it’s down. How can the market right itself and gain the consistency necessary to make investors feel secure about throwing their hats in the ring again?

What do you see as the major problems that are keeping the economy from a full recovery? What has the current administration done right? What has it done wrong? Should we stay the course? Or abandon these policies altogether?

Please feel free to share your thoughts in the comments section below (and pass along this link to friends and co-workers so they can share their thoughts as well).

Under a mandate from President Obama, the U.S. Labor Department plans to issue regulations this week ordering businesses to give time off to domestic partners to care for newborns or loved ones.

Speaking off the record, two Labor Department officials told the New York Times that the government would require all employers to extend the option that has been available to heterosexual workers for almost two decades under the Family and Medical Leave Act.

Part of the FMLA allows workers to take up to 12 weeks of unpaid leave each year to take care of loved ones or themselves. It previously had been applied only to heterosexual couples. But the Labor Department plans to extend those rights based on a “new interpretation” of the law — meaning there’s no need to ask Congress to change the law and that future presidents could reverse the decision without Congressional action.

This new mandate comes on the heels of an early-June order from Obama for federal agencies to extend child care services and expanded medical leave to their workers.

Last year, Obama gave federal workers’ same-sex partners a first round of benefits including visitation and dependent-care rights. He also authorized child-care services and subsidies; more flexibility to use family leave to attend to the needs of domestic partners and their children; relocation benefits; giving domestic partners the same status as family members when federal appointments are made; and access to credit union and other memberships when those are provided to federal workers.

Since the Employee Free Choice Act went on legislative life support – meaning there’s little chance that unions will find it easier to organize workers – the administration has hit the issue from a different angle. Here’s the latest example of that.

The National Mediation Board, the labor regulatory body for railroads and airlines just made the path to unionization smoother in those industries, by changing the union voting rules, by a 2-1 vote, with support of the Airline Pilots Association.

Under the old rule a union could be certified only if it was approved by a majority of the workforce that would be organized. Under that arrangement, workers who didn’t cast ballots were essentially counted as “no” votes. Now, under the new rule, if a majority of the voting employees say “yes,” the union gets in.

Will it spread?
OK, so the agreement for now only affects the two industries – airlines and railroads. And it might be alarmist to say there will be a spread of unionization from this latest action. But consider the story behind the story.

The NMB’s vote was made possible by the Obama administration’s appointment of a new member to the board, one who was the swing vote in favor of changing the voting rule. Now, connect the dots and tie that to the latest Obama appointments to the National Labor Relations Board: two lawyers who have represented unions. The NLRB has control over a broad range of industries and general matters of unionization.

Where’s it all going? Stay tuned.

The president met with a dozen banking representatives and told them that “the pendulum might have swung too far” in the direction of tightened lending since the financial meltdown. He said they have to loosen up to get the economy going again.

The bankers reportedly nodded but told the president that factors outside their control are preventing banks from lending. For instance:

• Reacting to the meltdown and accompanying fuzzy lending practices, federal regulators and auditors have tightened the screws on banks, making lenders skittish about loosening up, for fear of being penalized. And regulatory agencies have a fair degree of independence, so it’s not as if the White House can just order them to lighten up.
• Problems with collateral abound because of the drop in the real estate market. Many small businesses use real estate — sometimes an owner’s personal residence — to secure loans. With less security comes less lending.

So, while the president couldn’t guarantee that auditors would relax their standards or that there was a solution to the collateral problem, he promised to review the regs to make sure lending wasn’t being held up by pointless red tape.

The extension, passed by both houses of Congress as an add-on to the Department of Defense Appropriations Act of 2010, was signed by President Obama Dec. 21.

The initial subsidy, part of the Obama administration’s American Recovery and Reinvestment Act, called for a 65% subsidy on the premiums terminated employees must pay to continue their health coverage under COBRA. It was set to expire Dec. 31.

As you remember, employers were required to cover subsidy payments, which could then be reimbursed through reductions in federal payroll taxes.

New deadline: Feb. 28

The new law, which goes into effect immediately, extends employee eligibility for the subsidy to Feb. 28, 2010. It also extends the subsidy period from the current nine months to 15 months.

The legislation gives employees whose nine-month subsidy has run out another six months of premium assistance.

Final wrinkle: Employees whose subsidy period ran out Nov. 30 — and who couldn’t come up with the full insurance premium for December — can pony up the 35% and get retroactive coverage for the final month of the year. They’d then be able to receive the subsidy for another five months.

The bill also includes an amendment providing an additional 13 to 20 weeks of unemployment benefits, increasing payments by about $25 per week.

That’s not the end of the story for the COBRA subsidy program, though – there’s another bill waiting in the wings. The Jobs for Main Street Act of 2010 (HR 2847), passed by the House last week, would also extend the eligibility deadline for COBRA premium subsidy payments for six months, to June 30, 2010. However, this bill likely faces revisions in the Senate. We’ll keep you posted.

The CBS/New York Times poll, which included more than 700 unemployed Americans across a broad range of industries and job markets, found that roughly half of them feel the recession has had a fundamental impact on the way they live their lives. The poll also revealed:

• More than 60% of respondents claimed unemployment benefits weren’t even enough to cover basic necessities
• More than 50% didn’t have health insurance
• Half of respondents reported the need to borrow money from family or friends
• Another half feared falling out of an accepted social class, and
• 40% have moved or considered moving to a place where there are more jobs.

Being out of work also impacted the health and well being of most respondents. Among the survey’s more notable findings:

• 55% of respondents reported suffering some form of insomnia
• 50% suffered some form of anxiety or depression
• Nearly half got into frequent arguments with family and friends
• 40% noticed changes in their children’s behavior as a result of what they were going through, and
• 25% had consulted a mental health physician.

Regarding whom respondents blame for the current predicament:

• 26% blamed George W. Bush
• 12% blame the banks
• 8% blame politicians in general, and
• 3% blame Obama (with 47% saying they approve of the way he’s handling the situation now, and 42% saying they disapprove).

Finally, regarding prospects for the job market to improve in 2010:

• 39% said they anticipate improvement
• 36% expected it to stay the same, and
• 22% expected it will get worse.

Source: “Poll Reveals Depth and Trauma of Joblessness in U.S.” by Michael Luo and Megan Thee Brennan, New York Times, 12/14/2009