Chamber official: Uncertainty slowing economic recovery
Uncertainty prompted by at least three major pieces of federal legislation is contributing to the slowness of the recovery, a regional chamber of commerce official said Wednesday.
Western Regional Office of the U.S. Chamber of Commerce Executive Director Dick Castner spoke to the Carson Valley Chamber of Commerce.
“This recovery has been unprecedented because it doesn’t feel like one,” he said. “This is the slowest recovery we’ve had since the 1930s.”
He said businesses are reluctant to make long-term decisions, like hiring, until they know what effect legislation such as health care or financial reform will have.
Regulations based on the legislation are still being written, and there are some other things that are coming to light.
The chamber is distributing a letter to protest a provision that businesses would have to fill out a 10-99 misc. whenever they spend more than $600 on products, Castner said.
The provision was discovered and protested by the Internal Revenue Service.
While the provision doesn’t take effect until 2012, it will require business owners to keep 10-99s starting Jan. 1, 2011, he said.
“There’s a move to repeal it, but nobody knows when that will be yet, and the clock is ticking,” he said.
The expiration of the Bush tax cuts also contributes to the sense of uncertainty.
“That’s a big tax increase,” he said. “Congress is working on a bill, but we don’t know what’s going to happen.”
Castner said the Democrats had a narrow window where they could pass whatever legislation they wanted in the Senate, thanks to a 60-40 majority.
But with the election of a Republican to the Senate in Massachusetts there are 57 Democrats and two independents who tend to vote together.
Castner said it is likely that the balance of power between the two parties will be much closer after the November election.
Historically, the party in power when times are bad takes the brunt of voter anger.
“The Democrats won’t have anywhere near the majority they have now, if they have one at all,” he said. “That’s a good thing, because it’s better for the country if the parties have to work together. Even if we have gridlock for two years, that might not be too bad, either.”