Reuters: Small Business News: "Fiscal cliff" tumble looms despite Senate efforts

Reuters: Small Business News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

"Fiscal cliff" tumble looms despite Senate efforts Jan 1st 2013, 01:43 1 of 7. U.S. President Barack Obama speaks about the negotiations with Capitol Hill on the looming fiscal cliff in front of middle class Americans while in the Eisenhower Executive Office Building on the White House complex in Washington, December 31, 2012. Credit: Reuters/Larry Downing By Richard Cowan and Roberta Rampton WASHINGTON | Mon Dec 31, 2012 8:43pm EST WASHINGTON (Reuters) - The United States was on track to tumble over the "fiscal cliff" at midnight on Monday, at least for a day, as lawmakers held back from supporting an eleventh-hour plan from Senate leaders to avert severe tax increases and spending cuts. The U.S. House of Representatives looked unlikely to vote on a Senate "fiscal cliff" plan before midnight, possibly pushing a legislative decision into New Year's Day, when financial markets will be closed. The plan was heavy on tax increases and light on spending cuts, which was unlikely to appeal to Republicans in the House. It would raise income taxes on high-income Americans, but leave taxes at current levels for the middle class, a key goal of President Barack Obama. But there was discontent among Senate Democrats worried that the proposal did not go far enough in taxing the rich. The Democrats asked for a meeting with Vice President Joe Biden to have him explain the talks he was having with Republican Senate Minority Leader Mitch McConnell. "The caucus as a whole is not sold" on the plan, said a Senate Democratic aide. "We just don't have the votes for it." If Congress fails to act, about $600 billion in tax increases - much steeper than those in the Senate plan - and government-wide spending cuts will begin taking effect after midnight, harsh measures that could lead to a recession. But lawmakers could still vote for a deal on New Year's Day or later and prevent the worst of the fiscal cliff effects. The House expects to reconvene on Tuesday at noon, Republican Representative Steven LaTourette said. He added that House members had been told to stay close on Monday evening and that they may be called back to continue negotiations. Under the Senate plan, income above $450,000 per household or $400,000 per individual would be taxed at 39.6 percent, up from 35 percent. Income up to those levels would be taxed at the current, reduced tax rates put in place under former President George W. Bush. The Senate plan would raise estate taxes on inherited wealth and permanently fix the alternative minimum tax, or AMT, so that it did not threaten each year to sweep in millions of middle-income Americans for whom it was not intended. The plan also postpones for two months the automatic, across-the-board spending cuts in defense and domestic programs that are part of the fiscal cliff, Senator John McCain said. SENATE DEMOCRATS UNSURE Some Senate Democrats did not like the $450,000 threshold for raising taxes on the rich - they wanted $250,000 - or the higher threshold for raising estate taxes. Democrats also are upset there is no agreement yet to put off the first round of $1.2 trillion in automatic spending cuts. Republicans already are pushing for switching those across-the-board cuts to savings in the Medicare and Social Security healthcare and retirement programs and threatening to block a debt limit increase in February unless they get their way. But that is a fight that would most likely play out in January and February. Some Senate Democrats aides were dispirited that Biden, a fellow Democrat, had gone further than they wanted in the fiscal cliff talks, just as he did in December 2010 when all Bush tax cuts were extended for two years. Shortly after the plan emerged, Obama said agreement was within sight, but he sounded a cautious note. "There are still issues to resolve, but we're hopeful that Congress can get it done, but it's not done," Obama, a Democrat, said at a White House event. U.S. stocks rose on the day, with the market closing before the latest news broke about the House not voting. The benchmark Dow Jones industrial average closed up 1.3 percent at 13,104. Even if the country tumbles over the cliff, legislative action afterward could soften the blow. Final legislation can be backdated to January 1, for instance, said law firm K&L Gates partner Mary Burke Baker, who spent decades at the Internal Revenue Service. "The important date is the date in the legislative language ... no matter what day the Senate or House pass the law, or the date the president signs it," she said. Former Obama administration Treasury Department tax official Michael Mundaca agreed, although he said there would likely be delays in filing for many taxpayers as the IRS gets its computers into gear. A deal on Tuesday will likely leave unsolved the issue of the "debt ceiling," which caps how much debt the federal government can hold. Treasury Secretary Timothy Geithner said in a letter to congressional leaders that the government would suspend some investments in pension and health benefit funds for federal workers beginning on Monday in a move that allows it to keep borrowing for the meantime. (Additional reporting by Mark Felsenthal, Tabassum Zakaria, Kim Dixon, Jeff Mason, Rachelle Younglai and David Morgan, Writing by Kevin Drawbaugh, Editing by Alistair Bell and Peter Cooney) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions

Read more »

Reuters: Small Business News: Analysis: At cliff's edge, old ideas to cap tax breaks are new again

Reuters: Small Business News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Analysis: At cliff's edge, old ideas to cap tax breaks are new again Dec 31st 2012, 20:57 U.S. Senate Minority Leader Mitch McConnell (R-KY) leaves the Senate Chamber for the caucus at the U.S. Capitol in Washington December 30, 2012. Credit: Reuters/Mary Calvert By Kim Dixon and Kevin Drawbaugh Mon Dec 31, 2012 3:57pm EST (Reuters) - Imposing overall caps on how much high-income people in the United States can claim on their tax returns in deductions, exemptions and other tax breaks is an idea whose time may have come - again. In the whirl of "fiscal cliff" talks, bipartisan backing has grown for imposing, or in some cases reinstating, caps on tax breaks for top earners. On Monday, Republicans threw their support behind several approaches to do just that in a framework to step away from the fiscal cliff of $600 billion in new taxes and spending cuts set to take effect on January 1. Under an emerging deal brokered by Republican Senate Minority Leader Mitch McConnell and Democratic Vice President Joe Biden, curbs on deductions and exemptions for households earning more than $300,000 would be re-imposed, according to a source close to the talks. For several years, Democratic President Barack Obama has proposed re-imposing the limits. Republicans have opposed such caps for more than a decade, but the idea may be coming full circle. These limits "were originally done in 1990 at the behest of the Republicans who didn't want tax rates to go up," said Michael Graetz, a Columbia University tax law professor and a former top Treasury Department official. The main reason for the switch now? The urgent search for politically achievable paths to avoid falling off the fiscal cliff of sharp tax increases and spending cuts. Talks on avoiding the cliff were moving along on Monday with the fresh offer from McConnell and Biden. The beauty of the approaches, backers say, is that they let politicians raise government revenue without raising tax rates as much, said economists, Republicans and congressional aides. Moreover, a strategy that caps several tax breaks broadly could be more expedient than trying to curb tax breaks one at a time that would incur the wrath of lobbyists who would fight them all the way. Lawmakers are sizing up several ideas. PEP AND PEASE Two ideas backed by McConnell are reinstating the personal exemption phase-out (PEP) and so-called Pease limits on itemized deductions. Both were created in 1990 in a budget deal between Republican President George H.W. Bush and Democrats in Congress. PEP and Pease - often viewed as a package deal - both reduce how much high-income taxpayers can claim in personal exemptions, in the case of PEP, and itemized deductions, in the case of Pease. Both measures work to raise taxes on top earners, without explicitly raising the tax rates that they pay. When first imposed more than two decades ago, "they were ways to keep the rate at a certain level," Graetz said. So how do they work? PEP deals with the personal exemptions that taxpayers claim near the top of the Internal Revenue Service's Form 1040. Taxpayers claim exemptions for themselves, their spouses and their dependents. Last year, each exemption was worth $3,800. The Pease limit - named after its author, former Ohio Democratic Representative Don Pease - applies to itemized deductions, such as the ones taken for mortgage interest, charitable giving and state and local taxes paid. By reducing the values of exemptions and deductions, both PEP and Pease would work to raise the taxable income of wealthier people and, as a result, the taxes they pay. Under a previous proposal offered by Obama, reinstating them would raise about $165 billion in new tax revenue over 10 years, the Tax Policy Center estimated. Both limits were gradually eliminated under President George W. Bush. By 2010 they were history, a status which was extended for two years by Obama in an agreement with Republicans. 28 PERCENT CAP Another idea is Obama's proposal to cap the value of tax deductions and certain tax exemptions for high-income taxpayers. The president's proposal would limit the value of these tax breaks as one moves to a higher tax bracket. For example, a taxpayer in the current 35 percent tax bracket with $100,000 worth of qualified deductions and exemptions gets a $35,000 tax break. Under the 28 percent limit, that taxpayer would only get a $28,000 tax break. Such a change would raise about $580 billion over a decade, according to a White House estimate, a significant chunk of revenue. "Republicans have resisted it since the president proposed it," said Alan Viard, an economist at the conservative-leaning American Enterprise Institute think tank. But a top Republican aide has said that House of Representatives Speaker John Boehner was willing to consider the president's proposed cap in budget talks with Obama. Viard said that the idea fits with Republican support for broadening the tax base in exchange for lower tax rates. There are limits already in place for some tax breaks, such as the $1 million limit for home mortgages. (Editing by Howard Goller and Mohammad Zargham) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions

Read more »

Reuters: Small Business News: Fiscal deal stalls as clock ticks to deadline

Reuters: Small Business News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Fiscal deal stalls as clock ticks to deadline Dec 31st 2012, 00:09 1 of 14. U.S. Senate Minority Leader Mitch McConnell (R-KY) leaves the Senate Chamber for the caucus at the U.S. Capitol in Washington December 30, 2012. Efforts to prevent the economy from tumbling over a ''fiscal cliff'' stalled on Sunday as Democrats and Republicans remained at loggerheads over a deal that would prevent taxes for all Americans from rising on New Year's Day. Credit: Reuters/Mary Calvert By Thomas Ferraro and Rachelle Younglai WASHINGTON | Sun Dec 30, 2012 7:09pm EST WASHINGTON (Reuters) - Efforts to prevent the economy from tumbling over a "fiscal cliff" stalled on Sunday as Democrats and Republicans remained at loggerheads over a deal that would prevent taxes for all Americans from rising on New Year's Day. One hour before they had hoped to present a plan, Democratic and Republican Senate leaders said they were still unable to reach a compromise that would stop the automatic tax hikes and spending cuts that could push the U.S. economy back into recession. "There are still serious differences between the two sides," said Senate Democratic leader Harry Reid. Progress still appeared possible after the two sides narrowed their differences on tax increases and Republicans indicated they would withdraw a contentious proposal to slow the growth of Social Security retirement benefits. Failure to secure a deal would deliver a heavy blow to the U.S. economy just as it is showing signs of a quicker recovery. Planned tax increases and spending cuts would suck $600 billion out of the economy and again force up unemployment, which had shown signs of improving. Senate Republican leader Mitch McConnell talked several times to Vice President Joe Biden by phone in the hope of breaking the standstill. "I'm willing to get this done, but I need a dance partner," McConnell said. Any agreement needs to be rushed through both chambers of Congress before midnight on Monday. But, even if the two sides reach a deal, procedural barriers in the Senate and the House of Representatives make quick action difficult. Buoyed by his re-election in November, President Barack Obama has insisted that any deal must include a tax increase on the wealthiest Americans, who have seen their earnings rise steadily over the past decade at a time when income has stalled for the less affluent. Many conservative Republicans in the House of Representatives oppose a tax hike on anyone, no matter how wealthy. The two sides were close to agreeing to raise taxes on households earning around $400,000 or $500,000 a year - higher than Obama's preferred threshold of $250,000 - several senators told reporters. Republicans aim to pair any tax increase with government spending cuts to benefit programs that are projected to grow ever more expensive as the population ages in coming decades. But their proposal to slow the growth of Social Security benefits by changing the way they are measured against inflation met fierce resistance from Democrats. Obama included the proposal, known as "chained CPI," in an earlier proposal, but many of his fellow Democrats remain opposed. 'POISON PILL' "We consider it a poison pill - they know we can't accept it. It is a big step back from where we were on Friday," a Senate Democratic aide said. Several Senate Republicans said they would support taking that idea out of the discussion. "Most of us agree the chained CPI is off the table in these negotiations," Senator John McCain said on Twitter. In a rare appearance on NBC's "Meet the Press," Obama pressured lawmakers to reach a deal. "If people start seeing that on January 1st this problem still hasn't been solved... then obviously that's going to have an adverse reaction in the markets," he said, adding that he had offered Republicans significant compromises that had been rejected repeatedly. Obama said he would try to reverse the tax hikes for most Americans if Congress fails to act. John Boehner, the House speaker, rejected Obama's accusations that Republicans were not being amenable to compromise. "The president's comments today are ironic, as a recurring theme of our negotiations was his unwillingness to agree to anything that would require him to stand up to his own party," he said in a statement. (Additional reporting by Tabassum Zakaria, Jeff Mason, David Lawder, Fred Barbash and Richard Cowan. Writing by Andy Sullivan; editing by Alistair Bell and Jackie Frank) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions

Read more »

Reuters: Small Business News: Senate leaders work to avoid New Year's "fiscal cliff"

Reuters: Small Business News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Senate leaders work to avoid New Year's "fiscal cliff" Dec 30th 2012, 00:22 1 of 12. Senate Majority Leader Harry Reid (D-NV) (2nd L) walks with unidentified aides and security to his office at the U.S. Capitol after returning from a meeting with President Barack Obama at the White House in Washington December 28, 2012. Credit: Reuters/Mary Calvert By Richard Cowan and Rachelle Younglai WASHINGTON | Sat Dec 29, 2012 7:22pm EST WASHINGTON (Reuters) - Congressional negotiators burrowed into their offices on Saturday to see if they could stop the U.S. economy from falling off of a "fiscal cliff" in just three days when the biggest tax increases ever to hit Americans in one shot are scheduled to begin. Aides to Senate Majority Leader Harry Reid, a Democrat, and Senate Republican leader Mitch McConnell worked through the day on a possible compromise that would set aside $600 billion in tax increases and across-the-board government spending cuts that are set to kick in next week. A variety of lower taxes are scheduled to expire at the end of Monday, the last day of the year. If allowed to rise, the approximately $500 billion value of the revenue increases would represent a historic hike when taken together. The combined punch of the tax increases and spending cuts could push the U.S. economy back into recession. "We're now at the point where, in just a couple days, the law says that every American's tax rates are going up. Every American's paycheck will get a lot smaller. And that would be the wrong thing to do for our economy," President Barack Obama said in his weekly radio and Internet address, which was broadcast on Saturday. McConnell left the U.S. Capitol after spending seven hours in his office. "We've been trading paper all day and talks continue into the evening," he told reporters on his way out. A source with knowledge of the talks, speaking on condition of anonymity, said: "We are still very far apart with almost no time left on the clock." TEMPORARY PATCHES One congressional aide close to the talks said that most of what was being discussed late on Saturday would provide temporary patches to the "fiscal cliff" dilemma. The negotiations, the aide said, likely could extend into Sunday. "They continue to go round and round," the aide said of the negotiations, with ideas constantly in flux. The aide, who asked not to be identified, said negotiators were discussing the possibility of putting off for a few months the $109 billion in automatic spending cuts due to start on Wednesday. Those cuts would be divided equally between military and non-military programs. It is feared that they could cause severe disruptions inside federal agencies if allowed to occur. Earlier this week, talk of a temporary delay in the spending cuts was met with derision by some congressional aides. The extension of the low income tax rates first put in place under Republican former President George W. Bush would also be on a temporary basis, probably one year, the aide said. No deal had been reached on the most difficult question: Democrats' demand that upper-income earners - families making more than $250,000 a year - see their tax rates go up. Republicans had been opposed to any rate increase, but lately have signaled a willingness to go along with a higher threshold - and a $400,000 figure has been floating around for days. Under proposals being discussed, top earners could see their income tax rate rise to 39.6 percent, from the current 35 percent, in order to help tame budget deficits. The aide added that Republicans still had not agreed to Obama's call for extending long-term unemployment benefits, but that they were demanding some spending cuts to be included in a stop-gap deal. Disagreements over what to do about low estate taxes that are expiring also had not been worked out, the aide said. Unless Congress acts, the tax is set to jump on Tuesday - the first day of 2013 - to 55 percent with the first $1 million exempted for individuals. Currently, there is a 35 percent tax and a $5 million exemption. A Senate Republican leadership aide said that it might not be known until sometime on Sunday whether these talks bear fruit. That is when the leaders are expected to brief their rank-and-file members. The Senate is scheduled to hold a rare Sunday session beginning at 1 p.m. EST (1800 GMT), but it was not clear whether the chamber would have "fiscal cliff" legislation to act upon. One Democratic aide was pessimistic that McConnell would come up with a counteroffer that Reid would find acceptable. Such a counteroffer would have to be calibrated in a way that also could attract votes from conservative House of Representatives Republicans, many of whom have balked at tax rate increases on anyone. 'HARD TO SEE' A senior House Republican aide on Saturday voiced pessimism about prospects for a deal. "It's hard to see Reid agreeing to anything that can get the votes of the majority of the (Republican) majority in the House, thereby allowing a bipartisan accomplishment," the aide said. A "majority of the majority" refers to the 241 Republicans who are in the 435-member House. The Republican aide placed the blame squarely on Democrats, as many Republican members have done publicly, saying that going off the "fiscal cliff" is a "policy upside" for them. "Higher taxes, devastating defense cuts. The polls tell them they can win the PR (publican relations) war in January. From their perspective, why stop the cliff dive?" Democrats, in turn, have publicly accused House Speaker John Boehner, the top Republican in Congress, of preferring to put off any tough "fiscal cliff" votes until after a January 3 House election in which he is expected to win another two-year term as speaker. If McConnell and Reid can manage to reach a deal on inheritance taxes and raising income tax rates on the wealthiest Americans, they likely would throw into the compromise some other "fiscal cliff" solutions. Those could include extending an array of other expiring tax breaks such as one that encourages companies to conduct research and development. Also, Congress wants to prevent a steep pay-cut in January for doctors who treat elderly patients under the Medicare health insurance program. Lawmakers also want to prevent middle-class taxpayers from inadvertently creeping into a higher tax bracket, known as the alternative minimum tax, intended for the wealthiest. If the Reid-McConnell effort fails, Obama has asked the Senate to hold a vote on Monday on a "basic package" that would stop taxes from going up on the middle class and would extend long-term unemployment benefits that are about to expire. If it passes the Senate, its fate would be in the hands of the Republican-controlled House. (Additional reporting by Thomas Ferraro and Jeff Mason; Editing by Will Dunham) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions

Read more »

Reuters: Small Business News: Senate leaders to make last-ditch "fiscal cliff" effort

Reuters: Small Business News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Senate leaders to make last-ditch "fiscal cliff" effort Dec 29th 2012, 01:26 1 of 12. U.S. Senate Minority Leader Mitch McConnell (R-KY) speaks to reporters on his way to lunch at the U.S. Capitol in Washington December 28, 2012. Credit: Reuters/Mary F. Calvert By Roberta Rampton and Richard Cowan WASHINGTON | Fri Dec 28, 2012 8:35pm EST WASHINGTON (Reuters) - President Barack Obama and U.S. congressional leaders agreed on Friday to make a final effort to prevent the United States from going over the "fiscal cliff," setting off intense bargaining over Americans' tax rates as a New Year's Eve deadline looms. With only days left to avoid steep tax hikes and spending cuts that could cause a recession, two Senate veterans will try to forge a deal that has eluded the White House and Congress for months. Obama said he was "modestly optimistic" an agreement could be found. But neither side appeared to give much ground at a White House meeting of congressional leaders on Friday. What they did agree on was to task Harry Reid, the Democratic Senate majority leader, and Mitch McConnell, who heads the chamber's Republican minority, with reaching a budget agreement by Sunday at the latest. "The hour for immediate action is here. It is now. We're now at the point where in just four days, every American's tax rates are scheduled to go up by law. Every American's paycheck will get considerably smaller. And that would be the wrong thing to do," Obama told reporters. A total of $600 billion in tax hikes and automatic cuts to government spending will start kicking in on Tuesday - New Year's Day - if politicians cannot reach a deal. Economists fear the measures will push the U.S. economy into a recession. Pessimism about the fiscal cliff helped push U.S. stocks down on Friday for a fifth straight day. The Dow Jones industrial average dropped 158.20 points, or 1.21 percent. Retailers are blaming worries about the "fiscal cliff" for lackluster Christmas season shopping. Under the plan hashed out on Friday, any agreement between McConnell and Reid would be backed by the Senate and then approved in the Republican-controlled House of Representatives before the end of the year. But the House could well be the graveyard of any accord. A core of fiscal conservatives there strongly opposes Obama's efforts to raise taxes for the wealthiest as part of a plan to close America's budget deficit. House Republicans also want to see Obama commit to major spending cuts. Talks between Obama and Republican House Speaker John Boehner collapsed last week when several dozen Republicans defied their leader and rejected a plan to raise rates for those earning $1 million and above. A Democratic aide said Boehner stuck mainly to "talking points" in Friday's White House meeting, with the message that the House had acted on the budget and it was now time for the Senate to move. TALKS ON 'BIG NUMBERS' The two Senate leaders and their aides will plunge into talks on Saturday that will focus mainly on the threshold for raising income taxes on households with upper-level earnings, a Democratic aide said. Analysts say both sides could agree on raising taxes for households earning more than $400,000 or $500,000 a year. The pair will also discuss whether the estate tax should be kept at current low levels or allowed to rise, the aide said. Democrat Reid warned of tough talks. "It's not easy, we're dealing with big numbers, and some of that stuff we do is somewhat complicated," he said. McConnell described Friday's White House summit, also attended by Democratic House Minority Leader Nancy Pelosi, as "a good meeting." "So we'll be working hard to try to see if we can get there in the next 24 hours. So I'm hopeful and optimistic," he said. If things cannot be worked out between the Senate leaders, Obama said he wanted both chambers in Congress to vote on a backup plan that would increase taxes only for households with more than $250,000 of annual income. The plan would also extend unemployment insurance for about 2 million Americans and set up a framework for a larger deficit reduction deal next year. There are signs in the options market that investor fear is taking hold. The CBOE Volatility Index, or the VIX, the market's favored anxiety indicator, has remained at relatively low levels throughout this process, but it moved on Friday above 22, the highest level since June. But some in the market were resigned to Washington going beyond the New Year's Day deadline, as long as a serious agreement on deficit reduction comes out of the talks in early January. "Regardless of whether the government resolves the issues now, any deal can easily be retroactive. We're not as concerned with January 1 as the market seems to be," said Richard Weiss, a senior money manager at American Century Investments. Another component of the "fiscal cliff" - $109 billion in automatic spending cuts to military and domestic programs - is set to kick in on Wednesday. S&P rating agency said on Friday the fiscal cliff impasse did not affect the U.S. sovereign rating. That lifted the immediate threat of a downgrade from the agency, which cut the United States' triple-A rating in August, 2011 in an unprecedented move after a similar partisan budget fight. (Additional reporting by David Lawder, Thomas Ferraro, Rachelle Younglai and Mark Felsenthal; Writing by Alistair Bell; Editing by Peter Cooney) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions

Read more »

Reuters: Small Business News: Clean tech ventures find a warm reception in China

Reuters: Small Business News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Clean tech ventures find a warm reception in China Dec 28th 2012, 16:42 U.S. entrepreneurs are seen during a Cleantech led tour, introducing entrepreneurs to Chinese business leaders and investors, November 2012. Credit: Reuters/Cleantech Group/Handout By Major Tian Fri Dec 28, 2012 11:42am EST For American cleantech companies, there's just one country that matters most: China. After years of massive growth that took a heavy toll on the environment and natural resources, China now has an ambitious plan to tackle its energy needs by developing clean energy alternatives. Still, for so-called "cleantech" companies, accessing the market and setting up shop there is no easy task. That's where Fred Chang comes in. A senior China advisor to Cleantech Group, a San Francisco-based consulting group, as well as a long-time investor in Asia's cleantech industry, Chang compares himself to the Sherpa, a Tibetan tribe that helps foreign mountaineers conquer Everest. With the right partners, Chang said, the rewards for foreign cleantech companies in China are big. According to a report by Bloomberg New Energy Finance, new clean energy investment in China has surged in the second and third quarter this year, surpassing the U.S. by $7.9 and $7.5 billion respectively. "The Chinese public is not criticizing the government for supporting cleantech companies; they're encouraging it to do more," Chang said. The Obama administration has been under fire for some high profile failures of federally supported cleantech ventures, such as solar company Solyndra and car battery maker A123. In its recent five-year plan, China aims to cut its carbon dioxide emission per unit of GDP by 17% by 2015. The plan also has a focus on the development of what some observers call the "new magic seven," namely seven "emerging strategic industries", including biotechnology, high-end manufacturing and new energy, which are deemed to be the driver of China's future growth. "The government knows it's (environmental) problems, and the policies are clear and consistent," Chang said. "It won't be like in the U.S, where the Congress has to renew some programs every few years." For the last two years, Chang's firm has helped American cleantech companies come to China by providing week-long tours aimed to help entrepreneurs build contacts, learn about the business landscape and find investments. "China is a market where there's a desire to move fast," because of its urgent sustainability issues, said Richard Youngman, Europe and Asia managing director of Cleantech Group. "But there's a tech gap between what's available locally and what they want to achieve." And that's the gap the Cleantech Group hopes to bridge. "It's the most efficient business trip I've been on," said Frank Magnotti, one of the eight CEOs (three of whom are from Europe, five are from the U.S.) that took the tour last month. His New Jersey-based company, Fluitec, develops technology to monitor and control the quality of lubricants in rotating machinery, which are widely used in power plants, wind mills and steel refineries. Fluitec already has an office in China, but its main customers are foreign enterprises operating there. "As an entry point, it's easier, but you can't just rely on foreign companies," Magnotti said, adding that during the trip, the group met with lawyers and accountants, who helped him understand more about doing business in China. He also met with potential customers and interested investors. Atmosphere Recovery is another company that looks to grow their existing operation in China. The Minnesota-based venture builds gas analyzer systems to help industrial companies become more energy efficient. Ronald Rich, president of Atmosphere Recovery, said that the biggest challenge the company faces is that the demand for their products has outpaced their production capacity. "We don't actively market anymore," Rich said. "Sinopec (China's largest oil company) said they would buy 75 a year, we make 5 a month." Rich said he didn't expect the market to be so big when he first entered China in 2006; but last year, the company sold nearly half of its equipment there. Now he hopes to quadruple the company's production capacity, as he begins to tap into the Chinese oil and gas industry, which apparently is more willing to try new technologies than its American counterpart. "U.S. companies just don't take risk like that," Rich said, as they're enjoying historic prosperity and thus have no incentives to invest in technology upgrades. Another challenge for Atmosphere Recovery is the lack of good financing options in the U.S., said Rich. "Most of the cleantech investment in mid 2000s didn't pay out the way the venture capitalists hoped they would," he said, explaining why he finds investing deals today less attractive. While still preferring an American investor, Rich said he'd be happy to team up with a Chinese one if the offer suits. According to a report by Ernst and Young, public cleantech companies around the world have witnessed a 41 percent drop in market capitalization and a 229% decline in net income this year. In a Deloitte survey of 440 venture capitalists globally, those from the U.S. had shown the least confidence in cleantech investment. "There's a cooling down of private and public capital in the U.S. (that's available to the industry)," Youngman of Cleantech Group said. "There're more and more western cleantech companies who are finding life quite hard." "Whenever there's a chain break between capital and technology innovation on the market, the government has to be the first angel," said Wan Gang, secretary of China's Ministry of Science and Technology in a speech in 2010, affirming the government's support for those industries. "It's not just some political movement; it makes economic sense for corporations too, because they have to compete on tech solutions to make money," said Chang. "All those things are the opposite of what's going on elsewhere in the world that makes it welcoming for foreign companies to come to China." (The author is a Reuters contributor) (Editing by John Peabody, Ryan McCarthy and Brian Tracey) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions

Read more »

Reuters: Small Business News: Lawmakers set up 11th-hour bid on "fiscal cliff"

Reuters: Small Business News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Lawmakers set up 11th-hour bid on "fiscal cliff" Dec 28th 2012, 00:21 1 of 4. The U.S. Capitol building is pictured behind a fence as lawmakers return from the Christmas recess in Washington December 27, 2012. Credit: Reuters/Mary F. Calvert By David Lawder and Richard Cowan WASHINGTON | Thu Dec 27, 2012 7:21pm EST WASHINGTON (Reuters) - Lawmakers on Thursday gave themselves a last chance to prevent the United States from plunging off a "fiscal cliff" by setting up a late session in Congress a day before taxes are due to rise for most working Americans. Republican leaders in the House of Representatives told their members to be back in Washington from the Christmas holiday break on Sunday in case they need to vote on budget measures. That leaves the door open to a last-minute solution to avert big tax hikes due to kick in on January 1 and deep, automatic government spending cuts set to begin on January 2 - together worth $600 billion - that could push the United States back into recession. But the two political parties remained far apart, particularly over plans to increase taxes on the wealthiest Americans to help close the U.S. budget deficit. The coming days are likely to see either intense bargaining over numbers, or political theater as each side attempts to avoid blame if a deal looks unlikely. Talks could go down to the wire on New Year's Eve. "Hopefully, there is still time for an agreement of some kind that saves the taxpayers from a wholly, wholly preventable economic crisis," Mitch McConnell, the top Republican in the Democratic-controlled Senate, said on the Senate floor. McConnell said he was willing to look at any plan by President Barack Obama to avoid the fiscal cliff and a Senate aide said congressional leaders could hold talks with the president on Friday. The rhetoric was still harsh on Thursday after months of wrangling - much of it along ideological lines - over whether to raise taxes and by how much, as well as how to cut back on government spending. Senate Majority Leader Harry Reid, the top Democrat in Congress, accused Republican House Speaker John Boehner of running a "dictatorship" by refusing to allow bills he did not like onto the floor of the chamber. "It's being operated with a dictatorship of the speaker, not allowing a vast majority of the House of Representatives to get what they want," Reid told the Senate. Reid urged the Republicans who control the House to prevent the worst of the fiscal shock by getting behind a Senate bill to extend existing tax cuts for all except those households earning more than $250,000 a year. MARKETS EASE U.S. stocks sharply cut losses after news of the House reconvening as investors clung to hopes of an 11th-hour deal. Even a partial agreement on taxes that would leave tougher issues like entitlement reform and the debt ceiling until later could be enough to keep markets calm. "I'm not convinced it will result in a deal, but you could get enough concessions by both parties to at least avoid the immediacy of going over the cliff," said Randy Bateman, chief investment officer of Huntington Asset Management, in Columbus, Ohio. Obama arrived back at the White House on Thursday from a brief vacation in Hawaii that he cut short to restart stalled negotiations with Congress. He is likely to meet the toughest resistance from Republicans in the House, where a group of several dozen fiscal conservatives oppose any tax hikes at all. Strictly speaking, the fiscal cliff measures begin on January 1 when tax rates go up but the House might stay in session until the following day if an agreement is being worked out. "This January 1 deadline is a little artificial. We can do everything retroactively. We have to get it right, not get it quickly," said Republican Representative Andy Harris. Another component of the "fiscal cliff" - $109 billion in automatic spending cuts to military and domestic programs - is set to kick in on January 2. The House and Senate passed bills months ago reflecting their own sharply divergent positions on the expiring low tax rates, which went into effect during the administration of former Republican President George W. Bush. Democrats want to allow the tax cuts to expire on the wealthiest Americans and leave them in place for everyone else. Republicans want to extend the tax cuts for everyone. In another sign that Americans are increasingly worrying about their finances as Washington fails to address the budget crisis, consumer confidence fell to a four-month low in December. The fiscal wrangling in Congress sapped what had been a growing sense of optimism about the economy, a report released on Thursday showed. Americans blame Republicans in Congress more than congressional Democrats or Obama for the fiscal crisis, a Reuters/Ipsos poll showed. When asked who they held more responsible for the "fiscal cliff" situation, 27 percent blamed Republicans in Congress, 16 percent blamed Obama and 6 percent pointed to Democrats in Congress. The largest percentage - 31 percent - blamed "all of the above." (Additional reporting by Fred Barbash in Washington and David Gaffen in New York; writing by Alistair Bell; editing by Todd Eastham) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions

Read more »

Reuters: Small Business News: Smith & Wesson to buy additional $15 million shares amid gun-control talks

Reuters: Small Business News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Smith & Wesson to buy additional $15 million shares amid gun-control talks Dec 27th 2012, 15:54 A San Diego police officer carries a Smith and Wesson revolver during a gun buy-back December 21, 2012 in San Diego, California. Credit: Reuters/Sam Hodgson

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions

Read more »

Reuters: Small Business News: Obama heads back to Washington as "cliff" deadline nears

Reuters: Small Business News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Obama heads back to Washington as "cliff" deadline nears Dec 27th 2012, 14:30 1 of 2. U.S. President Barack Obama departs Honolulu, Hawaii December 26, 2012, for a return trip to Washington. Credit: Reuters/Larry Downing By Fred Barbash WASHINGTON | Thu Dec 27, 2012 9:30am EST WASHINGTON (Reuters) - President Barack Obama was flying back to Washington on Thursday and the top Republican in Congress planned to speak with House of Representatives lawmakers as the clock ticked toward a year-end deadline for action to avert the looming "fiscal cliff" tax hikes and spending cuts. Markets around the world awaited action in Washington to prevent tax hikes on nearly all Americans and the deep automatic government spending cuts due to kick in at the beginning of next month that could push the U.S. economy back into recession. Such action, however, remained far from certain, with Republicans and Democrats each insisting the other side move first amid continuing partisan gridlock. Air Force One carrying Obama from Hawaii took off at about 3 a.m. EST for a journey that can take nearly half a day. The U.S. Senate was scheduled to meet later on Thursday but on matters unrelated to the "fiscal cliff." The Democrats control the Senate and the Republicans control the House. Senate Majority Leader Harry Reid on Wednesday said through a spokesman that the Senate was ready to consider any bills coming from the House but would take no action on its own. Speaker John Boehner and other House Republican leaders, who said on Wednesday they were willing to take up a "fiscal cliff" measure only after the Senate acts on one, planned a conference call with Republican House members on Thursday. The expectation for the call was that lawmakers would be told to get back to Washington within 48 hours to consider anything the Senate might pass. Weather permitting, that would bring them to Washington with perhaps three days left before the deadline for action. Storms affecting the Midwest, the South and the Northeast played havoc with airline schedules. "This isn't a one party or one house problem. This is (that) leaders in both parties in all branches of the government are not willing to make the deal that they know they have to make. Everybody wants their stuff but doesn't want to give up what they don't want to give up," Republican U.S. Representative Steven LaTourette told CNN on Thursday. The House and Senate passed bills months ago reflecting their own sharply divergent positions on the expiring low tax rates, which went into effect during the administration of Republican former President George W. Bush. 'ALL TOO SLOWLY' Democrats want to allow the tax cuts to expire on the wealthiest Americans. Republicans want to extend the tax cuts for everyone. "We're in an economy now that is fragile - still recovering, all too slowly. These tax cuts must be extended for the middle class. We need to protect the middle class from that huge tax increase," Democratic Senator Richard Blumenthal told CNN. While Obama and congressional leaders have said that they are willing to negotiate, no substantive discussions are known to have taken place over the holidays and the gap between them appears to remain. A senior Obama administration official told reporters traveling with Obama that Republican leaders in Congress should step up to head off the looming tax and spending hit. Congress has proven that it can act swiftly once an agreement is reached. Hope persisted that Republicans and Democrats might come up with a resolution before New Year's Day that might at least postpone the impact of the tax hikes and spending cuts while further discussions take place. On that basis, world shares and the euro edged higher on Thursday. "There is still hope for a last-minute deal, otherwise we're in for a correction in January. People have already priced in an agreement. Without it, the market can't stay at these levels," a Paris-based trader said. Another battle is just over the horizon in late January or early February over raising the debt ceiling, which puts a limit on the amount of money the U.S. government can borrow to pay its debts and can be raised only with the approval of Congress. Republican leaders have said they will insist on more budget cuts as a condition of raising the ceiling. Without any action, the U.S. Treasury said on Wednesday the government is set to reach its $16.4 trillion debt ceiling on December 31. The Treasury Department said in a statement it would begin "extraordinary measures" to buy time. Many analysts believe the government can stave the default date off into late February. (Additional reporting by Doina Chiacu and Alina Selyukh; Editing by Will Dunham) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions

Read more »

Reuters: Small Business News: Piano maker Steinway takes down "for sale" sign

Reuters: Small Business News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Piano maker Steinway takes down "for sale" sign Dec 27th 2012, 14:33 The emblem of a historic Concert Grand piano build on May 11, 1892, is pictured during its refurbishing at the Steinway & Sons factory in Hamburg March 4, 2009. Credit: Reuters/Christian Charisius By Greg Roumeliotis NEW YORK | Thu Dec 27, 2012 9:33am EST NEW YORK (Reuters) - Steinway Musical Instruments Inc, the famous manufacturer of pianos, saxophones and trumpets, said on Wednesday it had decided not to sell itself following a 17-month-long exploration of strategic alternatives. An American icon synonymous with handmade grand pianos, Steinway has struggled to keep its production margins competitive amid stagnant sales, and has seen its shares plunge 10 percent year-to-date. Still, its third-quarter earnings last month offered signs that cost-cutting was paying off. In a statement on Wednesday, Steinway said it had received several non-binding indications of interest in buying the company, following talks with other companies in the sector as well as private equity, yet these did not offer more value than its own strategic plan. "We will continue to focus management's efforts on execution of that plan and we look forward to a prosperous 2013," Steinway CEO Michael Sweeney said in the statement. An in-principle agreement to sell its band instrument division to an investor group led by two of its board members, Dana Messina and John Stoner, was also scrapped in light of the current operating performance of the band division, Steinway said. In July 2011, Messina, Stoner and other members of management made an offer for Steinway's band instrument and online music divisions, prompting the company to set up a special committee in order to assess it. Later that month, Steinway asked investment bank Allen & Company LLC to a assist the special committee on exploring strategic alternatives that could also include selling the whole company outright to other interested parties. By October 2011, Messina had stepped down as CEO of the company after 15 years at the helm to pursue his bid, yet he remained a board member. He was replaced by Sweeney, a chairman of the board of Star Tribune Media Holdings and a former president of Starbucks Coffee Company (UK) Ltd. Steinway said on Wednesday that it was continuing a separate process to sell its leasehold interest in New York's Steinway Hall building, situated on Manhattan's 57th Street, and was in talks with several parties. According to its website, Steinway & Sons, the company's piano unit, opened the first Steinway Hall on 14th Street in Manhattan in 1866. With a main auditorium of 2,000 seats, it became New York City's artistic and cultural center, housing the New York Philharmonic until Carnegie Hall opened in 1891. These days, Steinway Hall is a showroom for the company's instruments. The Waltham, Massachusetts-based company's pianos have been used by legendary artists such as Cole Porter and Sergei Rachmaninoff and by contemporary ones like Chinese concert pianist Lang Lang. (Reporting by Greg Roumeliotis in New York; Editing by M.D. Golan) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions

Read more »

Reuters: Small Business News: Fear, finger-pointing mount over U.S. fiscal cliff

Reuters: Small Business News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Fear, finger-pointing mount over U.S. fiscal cliff Dec 23rd 2012, 20:13 1 of 2. U.S. House Speaker John Boehner (R-OH) speaks to the media on a ''fiscal cliff'' on Capitol Hill in Washington, December 20, 2012. Credit: Reuters/Yuri Gripas By Thomas Ferraro and Richard Cowan WASHINGTON | Sun Dec 23, 2012 3:13pm EST WASHINGTON (Reuters) - Top U.S. lawmakers voiced rising fear on Sunday that the country would go over "the fiscal cliff" in nine days, triggering harsh spending cuts and tax hikes, and some Republicans charged that was President Barack Obama's goal. "It's the first time that I feel it's more likely that we will go over the cliff than not," Senator Joe Lieberman, an independent from Connecticut, said on CNN's "State of the Union." "If we allow that to happen it will be the most colossal consequential act of congressional irresponsibility in a long time, maybe ever in American history," Lieberman added. The Democratic president and Republican House of Representatives Speaker John Boehner, the two key negotiators, are not talking and are out of town for the Christmas holidays. Congress is in recess, and will have only a few days next week to act before January 1. On the Sunday news shows, no one signaled a change of position that could form the basis for a short-term fix, despite a suggestion from Obama on Friday that he would favor one. The focus was shifting instead to the days following January 1 when the lowered tax rates dating back to the George W. Bush administration will have expired, presenting Congress with a redefined and more welcome task that involves only cutting taxes, not raising them. "I believe we are," going over the cliff, said Republican Senator John Barrasso of Wyoming. "I think the president is eager to go over the cliff for political purposes. I think he sees a political victory at the bottom of the cliff," Barrasso said on Fox News Sunday. Some Republicans have said Obama would welcome the fiscal cliff's tax increases and defense cuts, as well as the chance to blame Republicans for rejecting deal. Obama has rejected that assertion. Congress started the clock ticking in August of 2011 on the cliff. The threat of about $600 billion of spending cuts and tax increases was intended to shock the Democratic-led White House and Senate and the Republican-led House into bridging their many differences to approve a plan to bring tax relief to most Americans and curb runaway federal spending. Economists say the harsh tax increases and budget cuts from the fiscal cliff could thrust the world's largest economy back into a recession, unless Congress acts quickly to ease the economic blow. MARKETS COULD TUMBLE The most immediate impact could come in financial markets, which have been relatively calm in recent weeks as Republicans and Democrats bickered, but could tumble without prospects for a deal. Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will be closed on Tuesday for Christmas. Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the week with scores of market participants away on a holiday break. If Congress fails to reach any agreement, income tax rates will go up on just about everyone on January 1. Unemployment benefits, which Democrats had hoped to extend as part of a deal, will expire for many as well. In the first week of January, Congress could scramble and get a quick deal on taxes and the $109 billion in automatic spending cuts for 2013 that most lawmakers want to avoid. Once tax rates go up on January 1, it could be easier to keep those higher rates on wealthier taxpayers while reducing them for middle- and lower-income taxpayers. Lawmakers would not have to cast votes to raise taxes. Some lawmakers expressed guarded hope that a short-term deal on deficit-reduction could be reached in the next week or so, with a longer more permanent deal hammered out next year. But a short-term deal would need bipartisan support, as Obama has said he would veto a bill that does not raise taxes on the wealthiest Americans. Democratic Senator Kent Conrad, chairman of the Budget Committee, said Obama and Boehner are not that far apart and that both sides should keep pushing for a long-term big deal. "I would hope we would have one last attempt here to do what everyone knows needs to be done, which is the larger plan that really does stabilize the debt and get us moving in the right direction," Conrad of North Dakota told Fox News Sunday. (Reporting By Thomas Ferraro and Richard Cowan; Editing by Fred Barbash and Vicki Allen) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions

Read more »