Business Resource Center

In a front-page article, the Wall Street Journal (10/18, A1, Timiraos, Subscription Publication) reported the Federal Reserve is expected to cut interest rates when officials meet in two weeks, even as they debate further cuts moving forward. In another article, the Wall Street Journal (10/18, Iosebashvili, Otani, Subscription Publication) attributed the stock market’s strong performance to the Fed’s actions to help maintain economic growth.

24/7 Wall Street (10/13, Ausick) reported on NFIB’s small business optimism index for September, noting that it “slipped from 103.1 in August to 101.8,” while showing “no sign of a recession.” NFIB President and CEO Juanita D. Duggan was quoted saying, “All indications are that owners are eager to do more, but they’re uncertain about what the future holds and can’t find workers to fill the jobs they have open,” while Chief Economist William Dunkelberg was quoted saying, “The persistence of unfilled job openings and reports of a deficiency of job applicants indicate that there is still substantial economic optimism about the economy on Main Street.”

NFIB New York state director Greg Biryla wrote in the Syracuse (NY) Post-Standard (10/8) that “it is highly questionable that” the Corporate Transparency Act “will do much to address global terrorism, trafficking or laundering operations, but it will certainly succeed in creating extensive and onerous new regulatory, reporting, and security burdens for hundreds of thousands of small business owners.” Biryla added that the measure “is a massive intrusion by government, and it would have a pronounced impact across Central New York. Nearly 80% of businesses in Central New York have fewer than 20 employees.”

NFIB’s Small Business Optimism Index for September took a slight dip, falling by 1.3 points to 101.8. Nonetheless, the index maintained a historically high level, falling within the top quintile of all historical data. The index reflected continued job creation, investment, and spending, while the Uncertainty Index reflected high levels of concern, though “the survey shows no sign of a recession.” NFIB President and CEO Juanita D. Duggan was quoted saying, “As small business owners continue to invest, expand, and try to hire, they’re doing so with less gusto than they did earlier in the year, thanks to the mixed signals they’re receiving from policymakers and politicians. ... All indications are that owners are eager to do more, but they’re uncertain about what the future holds and can’t find workers to fill the jobs they have open.”

NFIB President and CEO Juanita Duggan wrote in Fox Business (10/2) that “the 2017 tax cuts are a big win for small business,” as the Tax Cuts and Jobs Act addressed small business owners’ concerns over federal business income taxes going back years. Duggan said most NFIB members that reported lower taxes invested the gains in their businesses, most commonly as pay raises for employees. However, a “growing concern” among members “is the future of the tax cuts,” most of which expire at the end of 2025. Duggan called on Congress to “make permanent its most important parts to small businesses, which means passing the bipartisan Main Street Tax Certainty Act.”

Fox Business (10/25, Henney) reported that Goldman Sachs believes the “Federal Reserve will likely cut interest rates next week for the third time this year...but the central bank may also signal that the current easing cycle is over.” Goldman, in a research note, estimated “a 95 percent chance of a modest reduction during the meeting.” The note added, “Strong signaling from Fed leadership indicates that the modest trade war de-escalation since September has not deterred them from completing a 75bp, 1990s-style ‘mid-cycle adjustment.” However, “Goldman economists said they believe policymakers will tweak the Federal Open Market Committee’s post-meeting statement to make it slightly more hawkish — essentially paving the way to hold borrowing costs steady and putting an end to the series of cuts that began in July.”

Reuters (10/25, Dunsmuir) reported the federal government ended Fiscal Year 2019 “with the largest budget deficit in seven years as gains in tax receipts were offset by higher spending and growing debt service payments.” Bloomberg (10/25, Dmitrieva) reported the budget deficit widened to $984 billion from $779 billion in FY2018. The New York Times (10/25, Rappeport) reported the Treasury Department also said the deficit “will top $1 trillion in 2020...as a slowing global economy and festering trade tensions weigh on economic growth” in the US.

The Washington Times (10/23, Lovelace) reported Senate Majority Leader McConnell on Wednesday “blasted Democrats’ newest attempt to undermine the tax reform legislation signed into law by President Trump.” The Times noted that Democrats are “pushing to disapprove of a measure regarding state and local tax cuts via a Senate resolution, as part of a larger effort to undo the Trump administration’s broader policy agenda.” McConnell said on the Senate floor, “I’m sorry to break it to my Democratic colleagues, but the middle-class Kentuckians I represent have zero interest in cross-subsidizing the tax bills of millionaires who live in Brooklyn and the Bay Area. It’s bad enough that my Democratic colleagues want to unwind tax reform, but it’s downright comical that their top priority, their top priority, is helping wealthy people in blue states find loopholes to pay even less.”

In a blog post, Americans for Tax Reform (10/22) listed 5 reasons why Congress should pass the USMCA, including that the trade pact “helps farmers, manufacturers, American workers and business.” The article added the USMCA “establishes the first small and medium-sized enterprises chapter in a U.S. Trade Agreement, which will increase transparency, accountability, and investment opportunities. International trade supports nearly 39 million jobs (1/5 of U.S. jobs), 12 million of which rely on Canada and Mexico, according to a Business Roundtable study. These numbers have doubled since NAFTA was signed,” adding it will “only increase with ratification of USMCA.”

Reuters (10/25, Shivdas) reported the number of Chinese travelers to the United States fell 4.7 percent “in the first nine months of 2019 as a slowdown in the world’s second biggest economy spurred both business travelers and holidaymakers to stay at home, U.S. data showed on Friday.” The National Travel & Tourism Office “said the number of business travelers had fallen 3.7% to 275,888 from the same period a year ago, while those traveling for leisure sank 6.5% to about 1.6 million.”

In a piece for the Federal News Network (10/25), Roger Waldron wrote that, according to the Small Business Administration, “[t]he federal government prefers to contract with small businesses whenever possible. Contracting officials can use set-aside and sole-source contracts to help their agencies meet their small business contracting goals.” Waldron added that small business contracting “is an important means to create opportunity and promote continuous innovation.”

Business Insider (10/23, Reuter) shared tips from the finalists for Amazon’s recently unveiled “first-ever Small Business of the Year awards.” The outlet contacted the Owners Under 30 finalists seeking “their advice to other entrepreneurs for how to capture ideas, get funding, and continue to develop and grow their businesses.”

PYMNTS (10/11) reported Salesforce is “rounding out its offering for online sellers with the addition of Lightning Order Management.” The piece notes that in August, Salesforce “announced a partnership with Mastercard, with Salesforce joining Mastercard’s small business program alongside Intuit to bolster small to medium-sized business (SMB) services.”

In an article looking at how small business can begin to prepare for the next economic downturn, CNBC (10/20) cited Capital One’s recent 2019 Small Business Growth Index survey, which found that “nearly two-thirds (64%) of small business owners said current business conditions are good or excellent, while 43% said they are concerned that a recession will impact the success of their business in the next year.”

Forbes (10/19) contributor Serenity Gibbons discussed the importance of “small business lending” as a “sound” metric for predicting periods of recessionary economic activity. She said that, according to the SBA, “bank lending to small businesses fell further than it did for enterprise companies. The reason is that startups are more sensitive to disruptions in supply and demand, so they defaulted faster and at higher rates than larger firms.” Gibbons said that “so far this year, small business revenue has risen by more than 18%. But American small business borrowers could pull back if they see the trade war worsen.”

Former Vice President Biden was asked in an interview on CBS’ “60 Minutes” about his call to repeal President Trump’s tax cuts. Biden said, “Trump gave the middle class a tax cut that was negligible. The fact is that what we should be doing is making sure that the wealthy pay their fair share.” Asked, “What’s wealthy,” Biden said, “Making over $400,000 a year, and those tax cuts will be repealed. And people making between $250,000 and $400,000...their tax rate would increase. But here’s the deal. What the middle class people really care about is can they afford education. Can they afford their healthcare. I would take the money and I’d pay for the health care proposal I put forward, I’d pay for education. So there’s a whole range of things that go directly to affect middle class people.”

The Wall Street Journal (10/20, Morath, Subscription Publication) reported that Democratic presidential candidates have praised elements of the German economy particularly regarding relations between unions and corporations, but that experts believe it would be difficult or impossible to adapt those elements to the US economy and culture. The Journal specifically cited the inclusion of worker representatives on corporate boards and the practice of sector-wide contracts negotiated between business associations and unions. These, the Journal said, would require substantial changes to US law, and cited experts as saying that the economic benefits might be illusory, stating that workers’ wages have risen more rapidly in the US than in Germany since 2000 and the German system appears to be having difficulty in the face of foreign competition.

The New York Times (10/20, Kaplan) reported Sen. Elizabeth Warren (D-MA) “said on Sunday that she will release a plan to finance ‘Medicare for all’ in the coming weeks,” which, the Times said, means she is “bowing to critics from the left and the right who have criticized her for not outlining how she would pay for” her plan.

The New York Times (10/18, Goodnough) said three judges on the Fifth Circuit Court of Appeals are “preparing a ruling on the Affordable Care Act that could put the law’s future front and center in the presidential race, overwhelming the current Democratic debate over Medicare for all and reigniting the health care-driven worries that helped Democrats win back the House last year.” The court is “weighing whether to uphold a Texas judge’s ruling that the law’s requirement for most Americans to have health insurance is unconstitutional, and that the rest of the sprawling law cannot function without it.” The Times said, “a ruling against Barack Obama’s signature domestic achievement as president” could “would open a huge vulnerability for” President Trump, “whose health care platform,” according to the Times, “largely consists of attacking as socialism Democratic plans to expand government health care.”

Employment Policies Institute Managing Director Michael Saltsman, in an op-ed in the Wall Street Journal (10/17, Subscription Publication), wrote that San Francisco restaurants are closing due to increased minimum wage, worker protections, lack of development, and permitting requirements. Saltsman went on to warn against Democratic presidential candidates’ proposals to increase the minimum wage.