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* * * * * * THURSDAY, JANUARY 31, 2013 ~ VOL. CCLXI NO. 25 WSJ.com HHHH $2 .00

Labor unions enthusiastically backed the Obamaadministration’s health-care overhaul when it wasup for debate. Now that the law is rolling out, someare turning sour.

Union leaders say many of the law’s require-ments will drive up the costs for their health-careplans and make unionized workers less competi-tive. Among other things, the law eliminates thecaps on medical benefits and prescription drugsused as cost-containment measures in many health-care plans. It also allows children to stay on theirparents’ plans until they turn 26.

To offset that, the nation’s largest labor groupswant their lower-paid members to be able to getfederal insurance subsidies while remaining ontheir plans. In the law, these subsidies were de-signed only for low-income workers without em-

ployer coverage as a way to help them buy privateinsurance.

In early talks, the Obama administration dis-missed the idea of applying the subsidies to peoplein union-sponsored plans, according to officialsfrom the trade group, the National CoordinatingCommittee for Multiemployer Plans, that repre-sents these insurance plans. Contacted for this arti-cle, Obama administration officials said the issue issubject to regulations still being written.

Some 20 million Americans are covered by thehealth-care plans at issue in labor’s push for subsi-dies. The plans are jointly managed by unions andemployers and used mostly by small companies.They are popular in industries such as constructionor trucking or hotels, where workers’ hours fluctu-ate. By contrast, unionized workers at big employ-ers such as Goodyear Tire & Rubber Co. tend to

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The U.S. economy shrank forthe first time in more than threeyears in the fourth quarter, un-derscoring the halting nature ofthe recovery. But the strength ofconsumer spending and businessinvestment suggested that theeconomy will grow, albeit slowly,this year.

Gross domestic product—thebroadest measure of goods andservices churned out by theeconomy—fell at a 0.1% annualrate in the fourth quarter of2012, according to the govern-ment’s initial estimate outWednesday.

The details weren’t as dis-couraging as the headline. Thedrop, a surprise, was driven by asharp fall in government spend-ing and by businesses puttingfewer goods on warehouseshelves, as well as by a declinein exports. The mainstays of thedomestic private economy—housing, consumer spending andbusiness investment in equip-ment and software—were stron-ger.

Research firm Capital Eco-nomics called the report “thebest-looking contraction in U.S.GDP you’ll ever see.” Forecastersdidn’t see the decline as a har-binger of recession. They pre-

dicted the U.S. will expand ataround a 2% pace in the currentquarter, though the mood couldshift Friday when the govern-ment releases its monthly snap-shot of the job market.

Investors pushed down stockprices but didn’t seem overlyworried either. The Dow JonesIndustrial Average, which hasbeen climbing steadily in pastweeks, fell 44 points, to close at13910.42.

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BY JOSH MITCHELL

Recovery Shows a Soft SpotGDP Shrinks 0.1% on Government Cuts, but Consumer, Business Spending Offer Hope

Israel bombed a suspectedshipment of antiaircraft missilesin Syria on Wednesday, accordingto regional and U.S. officials, inits most ambitious strike insideits neighbor’s territory in nearlytwo chaotic years of civil warthere.

The early-morning strike in a

border area west of Damascustargeted a convoy of trucks car-rying Russian-made SA-17 mis-siles to Hezbollah, the anti-IsraelShiite militant and politicalgroup in Lebanon, according to aWestern official briefed on theraid.

Israeli officials declined tocomment on the report, and to aSyrian allegation that Israel hadbombed a Syrian military facility.

A strike draws Israel furtherinto Syria’s conflict—a civil warthat has already deepened theregion’s divides as its powershave taken sides with arms andfunding. It also marked a chal-lenge to Iran, which has backedand financed Hezbollah.

“An attack of any kind is a ma-jor escalation,” said Timor Gok-sel, an expert on Hezbollah and aprofessor at American Universityin Beirut. “Why would Israel dothis out of the blue?”

The answer, according to sev-eral Western officials and secu-rity analysts, is that Israel took acalculated risk that Syria’s gov-ernment, strained by its own in-ternal war, would choose not toretaliate. Meanwhile, Hezbollahand Iran—both facing upcomingelections and financial chal-lenges—would also be unlikely to

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By Farnaz Fassihi,Julian E. Barnesand Sam Dagher

Israeli JetsBlast ArmsShipmentInside Syria

Different DirectionGross domestic product,quarterly change at anannualized rate

Source: Commerce DepartmentThe Wall Street Journal

–1

0

1

2

3%

'10 '11 '122009

–0.1%

BY JANET ADAMY AND MELANIE TROTTMAN

Some Unions Grow WaryOf Health Law They Backed

OPPOSING VIEWS: Mark Kelly, left, husband of former Arizona Rep. Gabrielle Giffords, who called for stiffergun laws at a Senate hearing Wednesday, with Wayne LaPierre. right, and David Keene of the NRA. A4

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The New Script for TeachingHandwriting Is No Script at All

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Cursive Goes the Way of ‘See Spot Run’In Many Classrooms, Delighting Students

RALEIGH, N.C.—Across NorthCarolina and in dozens of otherstates, teachers are committingwhat once would have been her-esy: They are writing off cursivescript.

At a growing number ofschools, young students are nolonger tracing curving L’s andarching D’s with pencil and pa-per, no longer pausing at the endof words to dotan i or cross at. The commoncore state stan-dards, a set ofmath and Eng-lish goals agreed upon by 45states and now being imple-mented, sends cursive the wayof the quill pen, while requiringinstead that students be profi-cient in keyboarding by fourthgrade.

Cursive is optional—and, sofar, few schools have opted for it.

“We’re trying to be realisticabout skills that kids are goingto need,” says Jill Camnitz, alongtime school board memberin Greenville, N.C. “You can’t doeverything. Something’s got togo.”

No matter that children willno longer be able to read theDeclaration of Independence orbirthday cards from their grand-parents. Sending a “Dear John”letter to cursive has been one of

the rare curric-ulum issuesthat stateshave been ableto agree on, inthe yearslong

debate about what studentsmust learn in elementary, middleand high school.

And getting rid of cursive isnearly unanimously popularamong students. When askedwhether they should have tolearn cursive, 3,000 of 3,900

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BY VALERIE BAUERLEIN

Trying to Bridge a Divide on Gun Control

CONTENTSBusiness Technology B4Corporate News B2,3,5,6Global Finance........... C3Heard on the Street C10In the Markets.......... C4Leisure & Arts............ D5

Opinion.................. A13-15Small Business......... B8Sports.............................. D6Style & Travel....... D2-4U.S. News................. A2-7Weather Watch........ B9World News......... A8-11

DJIA 13910.42 g 44.00 0.3% NASDAQ 3142.31 g 0.4% NIKKEI 11113.95 À 2.3% STOXX600 288.63 g 0.6% 10-YR. TREAS. g 6/32 , yield 2.009% OIL $97.94 À $0.37 GOLD $1,679.90 À $19.10 EURO $1.3567 YEN 91.09

s Copyright 2013 Dow Jones & Company. All Rights Reserved

Vital Signs

Hiring picked up thismonth. According to ADP,the private sector added192,000 jobs in January, upfrom 185,000 in December.The payroll firm’s reportdoesn’t reflect governmentjobs, unlike the coming La-bor Department estimate.Economists project Friday’sreport will show a gain of166,000 jobs, around themonthly average of 153,000over the past two years.

Monthly change in privatepayrolls, in thousands

Source: Automatic Data Processing

'09 '10 '11 '12 '13’08’07–900

–600

–300

0

>

Facebook posted a 40%fourth-quarter revenue

jump as it ramped up its mo-bile business and offered newtools to advertisers to bettertarget consumers, but investorssent the firm’s shares down3.8% in after-hours trading. B1n The U.S. economy shrankin the fourth quarter, butstrength in consumer spend-ing and business investmentsuggested the economy willgrow, albeit slowly, this year.A1n Fed officials decided tokeep purchasing mortgage-backed and Treasury securitiesand signaled no intention,for now, of letting up. A6n Stocks pulled back andTreasury prices pared lossesafter the Fed offered a mixedview of the economy. The Dowindustrials fell 44 points. C4n RIM unveiled new Black-Berry phones crucial to itsturnaround, but the first of thedevices won’t be available inthe U.S. until mid-March. B1, D1n Boeing posted a 30% dropin earnings and predicted nosignificant effect from the 787crisis, though airlines preparedfor an extended grounding. B3n Chrysler reported profit of$1.67 billion for 2012, but sig-naled that the expense of de-veloping newmodels will causebumps in the road ahead. B6nGeneral Motors is expectedto appoint former Volkswagenexecutive Karl-Thomas Neu-mann to lead its troubledAdam Opel operations. B6n The number of studentloans held by subprime bor-rowers is growing, and moreof those loans are souring,according to a new study. C1n Illinois postponed a bondauction just hours before itwas to launch, as concernsgrew among investors over thestate’s deep pension hole. A3n The U.S. is expanding itscrackdown on offshore taxevasion, preparing numer-ous criminal cases againstsuspected offenders. C1n Nintendo cut its sales out-look after disappointing holi-day demand for the firm’sWii U videogame console. B4n Spain’s primeminister saidhe would send parliament aplan to stimulate the nation’seconomy and put young peo-ple back to work. A10n Germany’s ruling coalitionwill propose a plan to isolateGerman banks’ risky activi-ties from customer deposits,according to a draft law. C3n The euro is on a months-long tear, but the sharp in-crease threatens to curb ex-ports badly needed to boosteuro-zone growth. C1n The yen’s recent drop isgiving hard-hit corporate Ja-pan its biggest break in years,raising hopes of a long-awaited earnings recovery. B1n Three big potash minersagreed to settle several pri-vate class-action lawsuitsthat alleged their pricing vi-olated U.S. antitrust laws. B6

n Israel bombed a suspectedmissile shipment in Syria.The strike targeted a convoyof trucks carrying Russian-made SA-17 antiaircraft mis-siles to Hezbollah, accordingto a Western official. In ad-dition to taking out weaponsthat could be used againstIsraeli warplanes, Israel sentwhat amounted to a warningto Assad and Iran against at-tempting to transfer anychemical or biological weap-ons to Hezbollah. A1Syria denied accounts thata truck convoy was hit andsaid Israeli jets instead hadstruck a military facility.n Egypt’s President Morsirejected opposition calls fora national unity governmentdespite pressure from Ger-man Chancellor Merkel. A8nMorsi said offensive com-ments about Jews that hemade in a 2010 video weretaken out of context. A8nFrench troops homed in onthe last major city inMali’snorth held by Islamist mili-tants, who have sought refugein amountainous region. A9nEx-Rep. Gabrielle Giffords,who was shot in the head twoyears ago, appeared at a Sen-ate hearing and called for swiftaction to curb gun crimes. A4n Hagel met with at least 50senators in advance of hisSenate panel hearing todayon his nomination to becomedefense secretary. A4nMassachusetts Gov. Patricknamed a former aide to succeedKerry in the Senate until a spe-cial election is held June 25.A5n South Korea successfullylaunched a rocket carrying aresearch satellite, a first for aspace program long overshad-owed by North Korea. A10nThe human toll from Brazil’snightclub fire rose, as morepeople were hospitalized dueto illness from toxic smoke. A10nChinese leaderWenwarnedthat the interests of rural resi-dents must not be sacrificed inpursuing urbanization. A11n A jury convicted a priestand a teacher in a child sex-abuse case that rocked thePhiladelphia archdiocese. A2n Sandusky lost a bid for anew trial, as a judge rejectedhis argument that his lawyersdidn’t have time to prepare. A2nCommercial fishermen inNew England face sharply re-duced cod quotas after fish-ery officials voted for cuts. A2nA Southeast storm spawnedtornadoes and winds that over-turned cars and demolishedbuildings. At least two died. A2nVietnam freed and deportedan American pro-democracyactivist held since April. A10nA bomb blast killed threesuspected militants in Karachi,Pakistan, as they were prepar-ing for an attack, police said.nFormer Illinois Gov. Ryanwas released from prison andreturned home to serve therest of his corruption sentence.

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