July 19 , 2010
Last week's economic reports were a sea of red. Evidence continues to mount that the economic recovery is moderating at mid-year. Of the 10 economic indicators that came out last week, five declined, four slowed and just one improved. (To read all of last week's indicators, see the Latest Economic Reports section below.)
The developing slowdown appears to be widespread, taking place in the consumer as well as industrial sectors of the economy. Retail spending fell for a second consecutive month in June and a preliminary report on consumer sentiment plunged in July.
After surging during the prior few months -- due in part to the ending of several stimulus programs and strong export growth -- manufacturing production fell 0.3 percent in June (see red and green bars in the chart above). A year into recovery, manufacturing production remains 10 percent below the December 2007 pre-recession peak (see black line in the chart.) More recently, two regional Federal Reserve manufacturing reports showed that manufacturing activity continued to erode in July.
As the fuel injected into the economy from fiscal stimulus and inventory restocking continues to erode, private-sector final demand (consumer spending, private investment and exports) will need to improve for the recovery to continue. Unfortunately, last week's reports signal that underlying economic conditions are not improving. A slowdown in the recovery is very likely in cards in the near-term.
Dave Huether
Chief Economist
National Association of Manufacturers
UMA JOINS OTHER BUSINESS LEADERS IN CALL FOR TAX RELIEF
July 20, 2010 – UMA
UMA joined today with hundreds of other associations and companies in calling on Congress to extend tax breaks granted temporarily ten years ago in the Bush Administration. The effects of allowing these tax breaks to expire could be disastrous for manufacturers. The text of the letter to congress follows:
TO THE MEMBERS OF THE UNITED STATES CONGRESS:
The undersigned companies and trade associations strongly urge Congress to prevent a massive tax increase that will have detrimental impacts on investment and jobs in the United States. Congress should move quickly to enact legislation that would keep the capital gains and dividends tax rates at 15 percent.
Unless Congress acts, the tax rate for capital gains will increase by 33 percent and the tax rate for dividends will increase by as much as 164 percent, resulting in one of the largest tax increases in U.S. history. Increasing taxes on capital gains and dividends could derail America’s fragile economic recovery.
The effects of such a tax increase are significant and numerous and include deterring the use of capital in ways that will grow the economy and hence maintain and create jobs, incentivizing companies to use excessive debt financing, and discouraging businesses from paying dividends.
That in turn will hurt Americans at all income levels, especially seniors, many of whom rely on investment income as a supplement to their retirement.
These adverse economic impacts will be exacerbated when the 3.8 percent tax on investment income from the recently enacted health care bill takes effect in 2013. The increased cost of capital caused by these tax increases will hamper economic growth and job creation for years to come.
We urge Congress to remove the uncertainty over this looming tax increase and maintain the 15 percent tax rate on capital gains and dividends. Now is not the time to discourage investment but to work together to keep the economy on the road to recovery.
UMA joined today with hundreds of other associations and companies in calling on Congress to extend tax breaks granted temporarily ten years ago in the Bush Administration. The effects of allowing these tax breaks to expire could be disastrous for manufacturers. The text of the letter to congress follows:
TO THE MEMBERS OF THE UNITED STATES CONGRESS:
The undersigned companies and trade associations strongly urge Congress to prevent a massive tax increase that will have detrimental impacts on investment and jobs in the United States. Congress should move quickly to enact legislation that would keep the capital gains and dividends tax rates at 15 percent.
Unless Congress acts, the tax rate for capital gains will increase by 33 percent and the tax rate for dividends will increase by as much as 164 percent, resulting in one of the largest tax increases in U.S. history. Increasing taxes on capital gains and dividends could derail America’s fragile economic recovery.
The effects of such a tax increase are significant and numerous and include deterring the use of capital in ways that will grow the economy and hence maintain and create jobs, incentivizing companies to use excessive debt financing, and discouraging businesses from paying dividends.
That in turn will hurt Americans at all income levels, especially seniors, many of whom rely on investment income as a supplement to their retirement.
These adverse economic impacts will be exacerbated when the 3.8 percent tax on investment income from the recently enacted health care bill takes effect in 2013. The increased cost of capital caused by these tax increases will hamper economic growth and job creation for years to come.
We urge Congress to remove the uncertainty over this looming tax increase and maintain the 15 percent tax rate on capital gains and dividends. Now is not the time to discourage investment but to work together to keep the economy on the road to recovery.
ZIONS BANK RELEASES WASATCH FRONT CONSUMER PRICE INDEX
July 20, 2010 – Zions Bank
The Zions Bank Wasatch Front Consumer Price Index (CPI) rose 0.2 percent in June, on a non-seasonally adjusted basis, compared to the national decrease of 0.1 percent (seasonally adjusted 0.
View Full Article
The Zions Bank Wasatch Front Consumer Price Index (CPI) rose 0.2 percent in June, on a non-seasonally adjusted basis, compared to the national decrease of 0.1 percent (seasonally adjusted 0.
View Full Article
UTAH'S FINANCIAL SERVICES SECTOR RECOVERING SLOWLY
July 20, 2010 - EDCUtah
Like most other industry sectors, Utah's financial services industry was hit hard by the recession. Six financial institutions are now extinct -- one of them had a 100-year history in the state -- and employment in the sector has declined steadily through February 2010.
{read more}
Like most other industry sectors, Utah's financial services industry was hit hard by the recession. Six financial institutions are now extinct -- one of them had a 100-year history in the state -- and employment in the sector has declined steadily through February 2010.
{read more}
UNEMPLOYMENT BENEFITS EXTENSION CLEARS SENATE HURDLE
July 20, 2010 – Late Wire from Manufacturing.net
Bill to restore unemployment benefits to millions of Americans who have been out of work for more than six months has cleared a Senate hurdle ... continue
THE SLEEPER LAWSUIT AGAINST OBAMACARE IN TEXAS
July 20, 2010 - David Whelan - Forbes
The lawsuits against ObamaCare filed by state attorneys general have gotten a lot of attention, but there's another worth watching. Last month the Texas Spine & Joint Hospital, along with the Physician Hospitals of America trade group, filed suit against Kathleen Sebelius. The hospital, based in Tyler, Tex., claims that the language in the Affordable Care Act (aka health reform) banning physicians from owning hospitals is unconstitutional.
I've argued over and over again that doctors who treat patients should be able to own hospitals. Accountants own their CPA firms and lawyers own law firms. Why should non-physicians have a monopoly on running hospitals? It strikes me as bad public policy, since doctors should know better than most what makes a good hospital. There's also a track record of these hospitals producing better clinical results than the non-specialized hospitals they compete with. For a backgrounder on this issue, check out "Stop That Patient," my cover story on the controversy.
The lawsuit could to trial as early as December. If it succeeds, could it lead to a groundswell of others that chip away at the 2,000 page health bill?
It's unclear how seriously to take the claims that the clause against specialty hospitals is unconstitutional. There's already a set of laws on the books, called Stark, that prevent doctors from investing in certain kinds of labs and imaging facilities. Given that this law has been in effect for almost 20 years, it seems difficult to say that a new law adding hospitals to that list would suddenly be unconstitutional. We raised this Physicians Hospitals of America executive director Molly Sandvig, who said, by email:
"First, the constitutionality of the Stark law has never been specifically questioned. Second, to take away a right that existed by law, upon which physicians could rely, Congress needs a rational basis. We're contending their was not rational basis because physician hospitals are better all around and don't damage the existing healthcare system (all the usual arguments). It is a violation of the 5th amendment right to due process and equal protection to remove a previously granted right without a rational basis."
The PHA also argues that the law will have a significant economic impact both on local economies and on tax revenues. Physician-owned hospitals employ 75,000 workers and pay on average $3 million in taxes per facility--compared to none by 85% of hospitals that have non-profit status.
The government hasn't weighed in yet, except to ask for more time. "Unfortunately there's nothing we can provide at this time in that this is a matter in litigation," says Charles Miller, a U.S. DOJ spokesman for the civil division.The attorney defending the case for Sebelius was not allowed to comment. A motion for summary judgment is scheduled for September and a trial could be as early as December, according to Physican Hospitals of America executive director Molly Sandvig.
This little rule, within ObamaCare, is another way that the legislation cuts down on patient choice. Using the market power of Medicare, the White House and Congress are essentially shutting down a business it doesn't like for political reasons. It's not a good precedent for patients who would like more options, not fewer.
The lawsuits against ObamaCare filed by state attorneys general have gotten a lot of attention, but there's another worth watching. Last month the Texas Spine & Joint Hospital, along with the Physician Hospitals of America trade group, filed suit against Kathleen Sebelius. The hospital, based in Tyler, Tex., claims that the language in the Affordable Care Act (aka health reform) banning physicians from owning hospitals is unconstitutional.
I've argued over and over again that doctors who treat patients should be able to own hospitals. Accountants own their CPA firms and lawyers own law firms. Why should non-physicians have a monopoly on running hospitals? It strikes me as bad public policy, since doctors should know better than most what makes a good hospital. There's also a track record of these hospitals producing better clinical results than the non-specialized hospitals they compete with. For a backgrounder on this issue, check out "Stop That Patient," my cover story on the controversy.
The lawsuit could to trial as early as December. If it succeeds, could it lead to a groundswell of others that chip away at the 2,000 page health bill?
It's unclear how seriously to take the claims that the clause against specialty hospitals is unconstitutional. There's already a set of laws on the books, called Stark, that prevent doctors from investing in certain kinds of labs and imaging facilities. Given that this law has been in effect for almost 20 years, it seems difficult to say that a new law adding hospitals to that list would suddenly be unconstitutional. We raised this Physicians Hospitals of America executive director Molly Sandvig, who said, by email:
"First, the constitutionality of the Stark law has never been specifically questioned. Second, to take away a right that existed by law, upon which physicians could rely, Congress needs a rational basis. We're contending their was not rational basis because physician hospitals are better all around and don't damage the existing healthcare system (all the usual arguments). It is a violation of the 5th amendment right to due process and equal protection to remove a previously granted right without a rational basis."
The PHA also argues that the law will have a significant economic impact both on local economies and on tax revenues. Physician-owned hospitals employ 75,000 workers and pay on average $3 million in taxes per facility--compared to none by 85% of hospitals that have non-profit status.
The government hasn't weighed in yet, except to ask for more time. "Unfortunately there's nothing we can provide at this time in that this is a matter in litigation," says Charles Miller, a U.S. DOJ spokesman for the civil division.The attorney defending the case for Sebelius was not allowed to comment. A motion for summary judgment is scheduled for September and a trial could be as early as December, according to Physican Hospitals of America executive director Molly Sandvig.
This little rule, within ObamaCare, is another way that the legislation cuts down on patient choice. Using the market power of Medicare, the White House and Congress are essentially shutting down a business it doesn't like for political reasons. It's not a good precedent for patients who would like more options, not fewer.
SURVEY SAYS NOT ALL LAYOFF SURVIVORS ARE SAFE
July 20, 2010 – Utah Business
Although large-scale layoffs have mostly ended, those who have survived workforce cutbacks may not be completely out of danger as the sluggish economy persists, and companies are preparing to make more adjustments. Employees need to demonstrate they have the skills their companies desire for the present and future – or that their employers should invest in developing them, according to a survey by OI Partners-Careerwise (Salt Lake City), a global talent management firm. -- More than half (52 percent) of employers reported that some of their managers do not have the right skills to achieve their business goals.
View Full Article
Although large-scale layoffs have mostly ended, those who have survived workforce cutbacks may not be completely out of danger as the sluggish economy persists, and companies are preparing to make more adjustments. Employees need to demonstrate they have the skills their companies desire for the present and future – or that their employers should invest in developing them, according to a survey by OI Partners-Careerwise (Salt Lake City), a global talent management firm. -- More than half (52 percent) of employers reported that some of their managers do not have the right skills to achieve their business goals.
View Full Article
ECONOMISTS: RECOVERY CONTINUES, BUT PACE SLOW
July 20, 2010 – Today in Manufacturing.net
New survey shows U.S. recovery continued during the second quarter with more businesses hiring workers and fewer cutting jobs, but the pace of growth has slowed... continue
LOWER INFLATION EXPECTATIONS DECREASE LIKELIHOOD OF INTEREST RATE HIKES
July 20, 2010 – Zions Bank
In June, on a non-seasonally adjusted basis, the Zions Bank Wasatch Front Consumer Price Index rose 0.2 percent compared to the national decrease of 0.1 percent (seasonally adjusted 0.1 percent decrease), as reflected in the Zions Bank and U.S. Bureau of Labor Statistics Consumer Price Indices reported today.
{read more}
In June, on a non-seasonally adjusted basis, the Zions Bank Wasatch Front Consumer Price Index rose 0.2 percent compared to the national decrease of 0.1 percent (seasonally adjusted 0.1 percent decrease), as reflected in the Zions Bank and U.S. Bureau of Labor Statistics Consumer Price Indices reported today.
{read more}
JUNE UNEMPLOYMENT RATE FALLS IN 39 STATES
July 20, 2010 – Late Wire from Manufacturing.net
Labor Department says unemployment rate fell in most states in June, mainly because more people gave up searching for work and were no longer counted ... continue
CHINA DENIES ENERGY CONSUMPTION REPORT
July 20, 2010 – Today in Manufacturing.net
International Energy Agency said China has overtaken the U.S. as world's largest energy consumer, but Beijing immediately questioned the calculations... continue
AON CONSULTING HEALTHCARE REFORM WEEKLY BRIEFING
July 20, 2010 – AON Consulting
Last Week in Washington
Guidance Issued on Coverage of Preventive Services
The Department of Health and Human Services (HHS), Internal Revenue Service, and U.S. Department of Labor jointly issued interim final regulations regarding coverage of preventive services under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010. The Regulations will be published in the Federal Register on July 19, 2010, and will apply to plan years beginning on or after September 23, 2010. In addition, the Agencies are seeking comments on certain provisions. The comment period ends on September 17, 2010. Aon Consulting’s July 16 Alert describes highlights of the regulations, coverage of preventive services, and next steps for plan sponsors.
HHS Clarifies Abortion Coverage in Pre-Existing Condition Insurance Plans Statement
On July 14, the Department of Health and Human Services released a statement clarifying abortion coverage in Pre-existing Condition Insurance Plans. The statement indicates that “abortions will not be covered in the Pre-existing Condition Insurance Plan (PCIP) except in the cases of rape or incest, or where the life of the woman would be endangered.”
Berwick Sworn in as Administrator of CMS
On July 12, Donald M. Berwick was sworn in as administrator of the Centers for Medicare & Medicaid Services. President Obama bypassed the Senate confirmation process and put Berwick in the job through a recess appointment to avoid Republican threats to block the nomination on the Senate floor. Because these appointments are temporary, Berwick can stay in his position through the end of 2011. The term is likely to be challenging as the agency will be responsible for implementing numerous provisions under health care reform with a budget that many observers say is already stretched thin.
New Medicare Fraud and Abuse Provisions Under the PPACA
Health Leaders Media reports that several amendments in the Patient Protection and Affordable Care Act intended to combat fraud in the Medicare & Medicaid programs will require greater vigilance by health care providers and may increase lawsuits against them. The article covers how the new provisions affect whistle-blower actions, overpayments, and the Anti-Kickback Statute (AKS). Under the new legislation, a whistle-blower who initiates a lawsuit alleging fraud under the False Claims Act (FCA) is no longer required to be the original source of the information. Another provision holds that a health care provider who receives a federal government overpayment must report the overpayment and return it to the government within 60 days of discovering the error or be subject to liability under the FCA, which includes civil penalties. Under the new legislation, general criminal intent will now suffice for additional liability under the AKS; the government no longer needs to prove that a provider had actual knowledge of the AKS or specific intent to violate it.
In Case You Missed It:
Commonwealth Fund Brief: Health Insurance Exchanges and the Affordable Care ActA new series of brief reports prepared by Urban Institute researchers and funded by the Robert Wood Johnson Foundation explores the effects health reform will have on consumers, state governments, physicians and hospitals.
Last Week in Washington
Guidance Issued on Coverage of Preventive Services
The Department of Health and Human Services (HHS), Internal Revenue Service, and U.S. Department of Labor jointly issued interim final regulations regarding coverage of preventive services under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010. The Regulations will be published in the Federal Register on July 19, 2010, and will apply to plan years beginning on or after September 23, 2010. In addition, the Agencies are seeking comments on certain provisions. The comment period ends on September 17, 2010. Aon Consulting’s July 16 Alert describes highlights of the regulations, coverage of preventive services, and next steps for plan sponsors.
HHS Clarifies Abortion Coverage in Pre-Existing Condition Insurance Plans Statement
On July 14, the Department of Health and Human Services released a statement clarifying abortion coverage in Pre-existing Condition Insurance Plans. The statement indicates that “abortions will not be covered in the Pre-existing Condition Insurance Plan (PCIP) except in the cases of rape or incest, or where the life of the woman would be endangered.”
Berwick Sworn in as Administrator of CMS
On July 12, Donald M. Berwick was sworn in as administrator of the Centers for Medicare & Medicaid Services. President Obama bypassed the Senate confirmation process and put Berwick in the job through a recess appointment to avoid Republican threats to block the nomination on the Senate floor. Because these appointments are temporary, Berwick can stay in his position through the end of 2011. The term is likely to be challenging as the agency will be responsible for implementing numerous provisions under health care reform with a budget that many observers say is already stretched thin.
New Medicare Fraud and Abuse Provisions Under the PPACA
Health Leaders Media reports that several amendments in the Patient Protection and Affordable Care Act intended to combat fraud in the Medicare & Medicaid programs will require greater vigilance by health care providers and may increase lawsuits against them. The article covers how the new provisions affect whistle-blower actions, overpayments, and the Anti-Kickback Statute (AKS). Under the new legislation, a whistle-blower who initiates a lawsuit alleging fraud under the False Claims Act (FCA) is no longer required to be the original source of the information. Another provision holds that a health care provider who receives a federal government overpayment must report the overpayment and return it to the government within 60 days of discovering the error or be subject to liability under the FCA, which includes civil penalties. Under the new legislation, general criminal intent will now suffice for additional liability under the AKS; the government no longer needs to prove that a provider had actual knowledge of the AKS or specific intent to violate it.
In Case You Missed It:
Commonwealth Fund Brief: Health Insurance Exchanges and the Affordable Care ActA new series of brief reports prepared by Urban Institute researchers and funded by the Robert Wood Johnson Foundation explores the effects health reform will have on consumers, state governments, physicians and hospitals.
AIMING AT THE FOREIGN TRANSGRESSORS, HITTING ALL MANUFACTURERS:
Speaker of the House Nancy Pelosi intends to make next week "Manufacturing Week" in the House, passing measures that reflect the Democratic caucus' version of a National Manufacturing Strategy. Unfortunately, the legislation may include H.R. 4678, the Foreign Manufacturers Legal Accountability Act. The bill requires foreign manufacturers, foreign subsidiaries of U.S. headquartered companies, and foreign parents or subsidiaries of U.S. subsidiaries to have a registered agent capable of being served in state and federal court for tort liability. The House bill also bans imports from foreign manufacturers without registered agents. The House Subcommittee on Commerce, Trade and Consumer Protection held a hearing on the bill on June 16, and reported it out on June 30. The full committee has not yet scheduled markup – we thought it might be this week – but things have a way of moving quickly and committee staff do not seem inclined to fix the bill's excesses. In principle, holding foreign manufacturers to the same standards of liability makes good sense, but the legislation threatens costs, delays and retaliation for companies engaged in foreign commerce.
As the NAM's Rosario Palmieri reports, passage could trigger reciprocal legislation in foreign countries and hurt small and medium U.S. manufacturers who can't afford to defend themselves in every jurisdiction to which they might export. Further, unpleasant consequences could be violations of current treaties on international legal treatment like the Hague Convention and WTO compliance problems. If your company would like more information or to participate in Hill meetings on this subject, please contact Rosario at rpalmieri@nam.org or Catherine Robinson, crobinson@nam.org.
Visual Workplace International Summit
2010 International Visual Workplace Summit
October 26th~ 28th Salt Lake City, Utah
Experts ●Case Studies ●Lessons Learned ●Methods
Gwendolyn Galsworth/Visual Workplace-Visual Thinking
Robert Miller/Visuality & The Shingo Prize
Peter Dobbs/Rolls-Royce, Honeywell & Cobham
Alice Lee/Beth Israel Deaconess Medical Center
Stewart Bellamy/Brandt Engineered Products
Norman Bodek/Creativity
Don Guild/Visual Pull Systems
Martin Hinckley/Poka-Yoke Systems
Brent Allen/Lifetime Products
Robert Williamson/Visual Machine®
and much much more....
For more information or to register,Call: 801-863-7001Email: info@visualsummit2010.comWebsite: http://www.visualsummit2010.com/
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