The Commerce Department plans to establish an office to work with the private sector on developing an Internet "identity ecosystem" to make online transactions more secure and convenient.

"A coordinated national strategy to significantly improve online trust will put e-commerce on stronger footing," Commerce Secretary Gary Locke said.

The new office will implement the National Strategy for Trusted Identities in Cyberspace, which aims to improve the authentication of individuals, organizations and infrastructure, such as servers, involved in online transactions. Users could choose to obtain secure credentials from a range of service providers that would authenticate their identity for a variety of transactions. Users who want to remain anonymous for activities such as posting comments on a blog could do so.

"We are not talking about a national ID card," Locke said. "We are not talking about a government-controlled system. What we are talking about is enhancing online security and privacy, and reducing and perhaps even eliminating the need to memorize a dozen passwords, through creation and use of more trusted digital identities."

Such a system would provide new market opportunities for businesses because they could offer online transactions that now are considered to be too risky, according to the Commerce Department.

TechAmerica, a trade association representing the technology industry, welcomed the formation of a new federal office to advance this strategy.

"Through its committed outreach to the private sector to date, the government has clearly recognized that the tech industry must drive implementation of the national strategy," said TechAmerica President and CEO Phil Bond. "We call upon the government to establish an even stronger public-private partnership by creating a private-sector advisory committee for the program office."

For more information, see www.commerce.gov

Bernanke urges fed plan to cut future deficits

Federal Reserve Chairman Ben Bernanke urged Congress to come up quickly with a plan to address the federal government's long-term budget deficits.

Failing to do so would lead to higher interest rates and inflation, he told the Senate Budget Committee.

"The longer we wait to act, the greater the risks and the more wrenching the inevitable changes to the budget will be," Bernanke said.

"By contrast, the prompt adoption of a credible program to reduce future deficits would not only enhance economic growth and stability in the long run, but could also yield substantial near-term benefits in terms of lower long-term interest rates and increased consumer and business confidence."

Bernanke said prompt adoption of specific steps to address the government's long-term fiscal imbalances also would reduce the need to make deep budget cuts now, when such a move could hurt recovery.

Bernanke's comments came a day after Treasury Secretary Timothy Geithner informed Congress that the United States could hit its $14.3 trillion debt limit as early as March 31. Congress needs to raise the debt limit before then in order to make sure the federal government doesn't default on its loans, Geithner said.

A default would raise raise borrowing costs for everyone, including businesses, and depress stock prices and home values. The result would be "job losses and business failures on a significant scale," Geithner said.

Republicans agree that a default is unacceptable, but they insist that legislation to raise the government's debt ceiling be accompanied by federal budget cuts.

"The American people will not stand for such an increase unless it is accompanied by meaningful action by the president and Congress to cut spending and end the job-killing spending binge in Washington," said House Speaker John Boehner, R-Ohio.

For more information, see http://budget.senate.gov/democratic

Business indicators slip; weak sales are blamed

After hitting its highest level in almost three years a month earlier, an index of small-business indicators fell slightly in December.

The index, which is based on a survey of small-business owners by the National Federation of Independent Business, fell 0.6 points to 92.6 points. Despite the previous month's 1.5-point gain, the index has remained at recession-like levels for the past three years.

"The hope for a pickup in the small-business sector did not materialize, but new weaknesses did not appear either," said NFIB chief economist William Dunkelberg. "Overall, owners remain stubbornly cautious and uncertain about the future course of the economy and their business prospects."

One-third of small-business owners cited weak sales as their No. 1 business problem - a historically high number. As a result, many small businesses are reluctant to hire more workers or invest in new equipment, Dunkelberg said.

President Barack Obama visited a small window manufacturer in Landover, Md., Jan. 7 to tout initiatives aimed at helping small businesses expand, including a tax break that allows businesses to immediately write off 100 percent of the cost of capital investments they make this year.

"Companies who are listening out there: If you are planning or thinking about making investments sometime in the future, make those investments now and you're going to save money," Obama said during his stop at Thompson Creek Window Co. "And that will help us grow the economy. It will help you grow your business."

For more information, see www.nfib.com

Kent Hoover: khoover@bizjournals.com