The legal battle over health-care reform's mandate for individuals to purchase insurance heated up with a judge's ruling in Virginia and oral arguments in a Florida courtroom.

In Virginia, U.S. District Judge Henry Hudson ruled the individual mandate provision "exceeds the constitutional boundaries of congressional power" and ordered that it be removed from the health-care reform law. The judge, however, rejected a request for an injunction blocking the law from being implemented. The individual mandate doesn't go into effect until 2014 - plenty of time for this issue to make it to the U.S. Supreme Court for a final ruling.

Hudson's ruling came in response to a federal lawsuit filed by Virginia's attorney general. In Florida, 20 other states have filed a similar lawsuit, joined by the National Federation of Independent Business. U.S. District Judge Roger Vinson was scheduled to hear arguments in the case on Dec. 16.

Karen Harned is executive director of the NFIB's Small Business Legal Center. She said Hudson's ruling "is one more reason why we are cautiously optimistic that Judge Vinson will strike down the individual mandate."

"Congress lacks the authority to regulate what products and services citizens must purchase," Harned said. "The individual mandate and the entire health-care law should be struck down for these reasons."

Two other federal judges, however, have ruled against constitutional challenges to health-care reform.

At issue is whether the power to regulate interstate commerce provides Congress with the authority to make someone either purchase health insurance or pay a fee to the government.

In defending the law, the Department of Justice has argued that health insurance is different from other commercial products because eventually everyone requires health care. Some of the new law's most important reforms - such as prohibiting insurers from denying coverage to people with pre-existing conditions - depend on everyone having insurance coverage.

"If insurance companies can no longer deny coverage to anyone who applies for insurance - especially those who have health problems and are potentially more expensive to cover - then there is nothing stopping someone from waiting until they're sick or injured to apply for coverage since insurance companies can't say no," said White House aide Stephanie Cutter.

"That would lead to double-digit premium increases - up to 20 percent - for everyone with insurance," she said.

Republicans, meanwhile, repeated their pledge to repeal health-care reform when they take control of the House in January. They called on the federal government and states to halt their efforts to implement the law.

"Cash-strapped states should carefully weigh the benefits of investing time and resources in ObamaCare's implementation now that its central mandate has been ruled unconstitutional," said Rep. John Boehner, R-Ohio, who will become House speaker in January.

Small-biz indicators hit highest level in 3 years

An index of small-business indicators hit its highest level in almost three years.

The index, which is based on a monthly survey of National Federation of Independent Business members, jumped 1.5 points in November to 93.2.

That number, however, remained well below readings for a healthy economy, despite four consecutive months of increases. A net 16 percent of small-business owners expect business conditions to improve in the next six months, the best reading for this indicator since June 2005.

"Apparently, the future is looking brighter for more owners, although much will depend on what Congress does in the closing weeks of the year," said NFIB Chief Economist William Dunkelberg.

Congress is expected to pass legislation that would extend the Bush-era income tax cuts, which are scheduled to expire Dec. 31, for another two years.

That bill also would allow businesses to expense 100 percent of their capital expenditures in 2011. But the NFIB survey found that only 20 percent of small-business owners plan capital outlays in the future, a low number historically.

"Spending seems to be primarily in maintenance mode. If it breaks, replace it," said Dunkelberg, adding that job creation likely will continue "at a tepid pace."

Weak sales, not lack of credit, were the biggest problem for small-business owners. Until sales improve, most businesses will be hesitant to invest in new equipment or new workers, he said.

Sales are improving for retailers, up for the fifth straight month in November.

"Consumers appear eager to get back in the game," said Sandy Kennedy, president of the Retail Industry Leaders Association.

Big-business CEOs, meanwhile, appear to be much more optimistic than small-business owners.

A Business Roundtable survey found that 80 percent of CEOs of America's largest companies expect sales gains in the next six months.

Nearly 60 percent expect to increase their capital spending, and 45 percent expect to hire more workers.

For more information, see www.nfib.com or www.businessroundtable.org.

Microsoft, SBA team to help small businesses

Microsoft helped the Small Business Administration create a new guide on how small businesses can use technology to improve their chances for success.

The free Business Technology Simplified guide is available through SBA district offices or SBA's resource partners, such as Small Business Development Centers.

It also is available as a self-paced online course, one of nearly 30 online tutorials offered by the SBA.

For more information, see www.sba.gov/training.