べネゼラのチャべスが、日本企業の資産を押さえようとしている。伊藤忠商事や三菱石油や工事契約をした日系の工業会社への支払いが停止している。債務不履行だ。日本の企業はべネゼラから撤退を考えている。伊勢平次郎 メリーランドにて、、Japan May End $1.5 Billion Venezuela Loan on Seizures
By Steven Bodzin and Shigeru Sato
June 23 (Bloomberg) -- Japan may cancel a planned $1.5 billion loan for Venezuela’s El Palito and Puerto La Cruz oil refineries after the South American nation seized Japanese company assets, said a person familiar with the situation.
The Japan Bank for International Cooperation, or JBIC, is reviewing loans for the upgrades after Venezuela took over Japanese iron and chemicals assets and fell behind on payments to oil-service contractors, according to the person, who declined to be identified because the review isn’t public. The refineries have a combined 327,000 barrels-a-day of capacity.
Venezuelan President Hugo Chavez is risking as much as $33.5 billion in Japanese investment as he takes over plants owned by companies such as Tokyo-based Mitsubishi Corp. Petroleos de Venezuela SA, the state-owned oil company, is also behind on payments to contractors including Japan’s Toyo Engineering Corp., according to the person.
“If that money were to dry out they’d be in a serious pinch,” said Roger Tissot, a consultant with Gas Energy Latin America in Vernon, British Columbia. “It doesn’t matter if you’re from China, Japan, Saudi Arabia or Wall Street, you want your money back and a little bit of return.”
Nippon Export and Investment Insurance, or Nexi, is also considering ending coverage for projects in Venezuela, the person said. The agency insures most Japanese holdings in Venezuela. The company has been holding internal meetings to determine its insurance coverage policy for Japanese investments in Venezuela, Kyoichi Suzuki, the head of the agency’s country risk analysis group, said by phone June 19.
Rafael Ramirez, Venezuela’s oil and energy minister and president of PDVSA, as the state oil company is known, didn’t immediately respond to a request for comment sent to his communications office.
Hirofumi Kawagoshi, the head of investor relations at Toyo Engineering, confirmed that Venezuela has been behind in payments for a 60-billion-yen ($631 million) contract to build a fertilizer plant. The accord was signed in 2007, Kawagoshi said.
Planned Japanese investments in Venezuela include $10 billion in liquefied natural gas projects, $8 billion in petrochemicals and $1.5 billion for the refineries, Chavez said while visiting Japanese Prime Minister Taro Aso in April.
“We have grave concerns about Venezuela’s nationalization of the industries and need to continue internal discussions before determining our clear future policy,” Nexi’s Suzuki said.
Japanese companies may lose their appetite for investing in the South American country without Nexi coverage because they would be fully exposed to risks, said Hidetoshi Shioda, a senior energy analyst at Mizuho Securities Co. in Tokyo.
Mitsubishi has an agreement to finance upgrading the Puerto La Cruz refinery, according to a statement from Chavez’s office. A Mitsubishi spokesman, who can’t be named because of the company’s internal rules, declined to comment on the agreement or on future talks on the refinery project.
JBIC, through a spokesperson who wouldn’t be named because of bank policy, declined to comment on any review of the loan because negotiations are still ongoing. Venezuela’s Foreign Ministry didn’t immediately respond to a call and e-mailed questions from Bloomberg News seeking comment.
Exit From Venezuela
“Trading houses and other Japanese investors would get out of Venezuela if they don’t have the Japanese government’s strong financial backing,” said Yasuhiro Narita, an analyst specializing in trading houses at Nomura Securities Co. in Tokyo.
Mitsubishi, Mitsui & Co. and Itochu Corp. are among the partners designing two liquefied natural gas plants where Ramirez said Japanese investment may reach $10 billion.
Mitsui will look into the impact of Venezuela’s possible nationalization of industries and take appropriate action in consultation with its Japanese partners, said a spokesman, who declined to be named because of company policy. An Itochu spokesman, who also can’t be identified because of internal rules, declined to comment.
In 2007, JBIC led a group including Mitsui and Marubeni Corp. that loaned PDVSA $3.5 billion to be paid in cash, crude oil or petroleum products over 15 years, according to PDVSA’s annual report.
Venezuela has nationalized two industries with Japanese investment this year. Chavez took over the hot briquetted iron industry May 22, including Complejo Siderurgico de Guayana CA, or Comsigua, where shareholders include Kobe, Japan-based Kobe Steel Ltd. and Tokyo-based Marubeni.
The Latin American nation’s legislature passed a law June 16 to take over primary and intermediate chemicals plants, such as the Metor methanol plant where Mitsubishi Gas Chemical Co. and Mitsubishi, both of Tokyo, share a majority stake.
PDVSA is at least $5 billion behind on payments to contractors, with several complaining that they have received only token payments since August.
Poll: Americans Less Upbeat About Stimulus Bill's Impact
Monday, June 22, 2009; 5:00 PM
Expectations for President Obama's stimulus package have diminished, with barely half of Americans now confident the $787 billion measure will boost the economy, and the rapid rise in optimism that followed the 2008 election has abated, according to a new Washington Post-ABC News poll.
Washington Post-ABC News Poll Data
The tempered public outlook has not significantly affected Obama's overall standing, which at 65 percent approval in the new survey outpaces the ratings of former Presidents George W. Bush and Bill Clinton at similar points in their presidencies. But new questions about the stimulus package's effectiveness underscore the stakes for the Obama administration in the months ahead, as it pushes for big reforms in health care and energy on top of the singular issue of the nation's flagging economy.
Obama maintains leverage on these issues in part because of the continuing weakness of his opposition. The survey found the favorability ratings of congressional Republicans at their lowest point in polls dating back more than a decade. Obama also has significant advantages over Republican lawmakers in terms of public trust on dealing with the economy, health care, the deficit and the threat of terrorism, all despite broad-based GOP criticism of his early actions on these fronts.
With unemployment projected to continue rising and fears that the big run-up in stock prices since February may have been a temporary trend, fixing the economy remains the most critical issue of Obama's presidency -- and retaining public confidence in his policies is an important element of his recovery strategy.
Overall, 52 percent now say the stimulus package has or will succeed in restoring the economy, down from 59 percent two months ago. The falloff in confidence in the stimulus package has been sharpest in the hard-hit Midwest, where fewer than half now see the government spending as succeeding. In April, six in 10 Midwesterners said the big, federal program had already worked or eventually would do so.
The shift in public assessments has clear political ramifications: At the 100-day mark of Obama's presidency, 63 percent of people in states that were decided by fewer than 10 points in November said the stimulus had or would boost the economy. Today, in the telephone poll of 1,001 Americans conducted Thursday through Sunday, that number has plummeted to 50 percent in those closely-contested states, with 47 percent saying it won't help the national economy.
The falloff since April cuts across partisan lines. Confidence in the package's effectiveness has dropped from 81 percent to 73 percent among Democrats and from 32 percent to 26 percent among Republicans. Independents dropped from 56 percent to 50 percent. What was once a clearly positive assessment of the program among independents (56 to 39 percent) is now an almost evenly split (50 to 47percent).
Public confidence in the direction of the country remains well above its pre-election lows, but in the new survey, that indicator stopped rising for the first time since the election. In April, the percentage of Americans saying things were moving in a positive direction hit 50 percent for the first time in more than six years, and up from single digits before the November election. In the new survey, 47 percent said they believe the country is moving in the right direction and 50 percent said it is pretty seriously off on the wrong track.
Obama's approval rating is slightly lower than it was in April, and his disapproval figure has risen by five percentage points. In general, public approval of Obama's handling of major issues is lower than his overall approval rating. Still, majorities of Americans said they approved of Obama's handling of the economy, health care and global warming.
Two weak points on the domestic front remain: Obama still gets tepid marks on his handling of the situation with the big U.S. automakers and as many people disapprove as approve of his Obama's handling of the federal budget deficit. On the deficit, intensity runs against the president, with 35 percent "strongly" disapproving, compared with 22 percent who say they are solidly behind what he's doing on that topic.
More broadly, concerns about the deficit remain widespread, with almost nine in 10 Americans saying they are "very" or "somewhat" concerned about the size of the deficit.
One factor that continues to work for Obama, however, is that most Americans continue to see him as a new type of Democrat, one "who will be careful with the public's money," rather than an old-style, "tax-and-spend Democrat." By this point in 1993, Clinton had already lost the new-style label, which he had maintained over the first months of his presidency.
Obama has used the power and financial resources of the federal government repeatedly as he has dealt with the country's problems this year, to the consternation of his Republican critics. The poll found little change in underlying public attitudes toward government since the inauguration, with just over half saying they prefer a smaller government with fewer services to a larger government with more services. Independents, however, now split 61 to 35 percent in favor of a smaller government; they were more narrowly divided on this question a year ago (52 to 44 percent), before the financial crisis hit.
As in previous polls, Obama's ratings on foreign policy are generally higher than on domestic issues. Six in 10 said they approve of his handling of international affairs and 57 percent said they approve of his handling of the threat of terrorism. More said Obama's policies are making the United States safer from terrorism than think they've weakened the country, but as in April, a plurality said they've not made much of a difference.
But on specific questions of torture policy and the closing of the detention center at Guantanamo Bay, Cuba, there is still broad public pushback to his announced policies. Under half, 45 percent, said they approve of shuttering the detention center, and when asked if they'd accept those terrorism suspects in their home states, support dropped further still, to 37 percent.
The country remains sharply divided on torture, with nearly half saying there are cases in which torture should be considered, a sharp contrast to the president's blanket condemnation of the practice.
On Iran, Obama has been criticized by some Republicans for the way he has responded to the recent demonstrations there, with his critics saying he has not been vocal enough in promoting democracy and in siding with the demonstrators. In the new survey, 52 percent said they approved of how he has handled the situation. There has been no noticeable change on this question since the last poll in April, before the controversy over the Iranian elections erupted.
The state of the Republican Party remains grim. Just 22 percent of those surveyed identified themselves as Republicans, near April's decades-long low point. Only 36 percent said they have a favorable impression of the GOP, with 56 percent saying they have an unfavorable impression. (Fifty-three percent said they have a favorable view of the Democratic Party.)
Obama has greater than 20-point leads over congressional Republicans in public trust on dealing with health care, the deficit, terrorism and the economy. The margin on the economy has slipped since April, but still remains a hefty 55 percent to 31 percent over GOP lawmakers.
House Speaker Nancy Pelosi's ratings stand at 38 percent positive, 45 percent negative. The last time the Post-ABC poll asked about Pelosi was in April 2007. At that time, 53 percent said they approved of the way she was handling her job and 35 percent disapproved.
The poll has a margin of sampling error of plus or minus three percentage points.
住んでいる自宅と土地を差し押さえられるほど、アメリカ人にとって辛いものはない。「差し押さえ物件」と看板を前庭に立てられる。失業率が１３州で１０％以上に達した。住宅を差し押さえられる原因の最大のものだ。ハーバード大学の「住宅問題調査報告」が発表された。アメリカの住宅市場後退と銀行の貸し渋りは収まりそうもない。英文ですが、読んでください。知識人には知っておくべきことだから。伊勢平次郎 メリーランドにて、、Housing Eludes Recovery as Job Losses, Foreclosures Climb
By Brian Louis
June 22 (Bloomberg) -- Unemployment and consumer debt are putting home ownership beyond the reach of would-be buyers even as U.S. home prices reset to 2003 levels, according to a report today by Harvard University’s Joint Center for Housing Studies.
“Clear signs of a recovery have yet to emerge, and job losses and the steady stream of foreclosures are keeping many markets under pressure,” researchers for the Cambridge, Massachusetts-based center wrote. “Sales of both new and existing homes continued to struggle to find a bottom.”
Tight residential real estate markets and low mortgage rates fueled a five-year property boom as the number of U.S. households paying more than half their incomes for housing jumped from 13.8 million in 2001 to 17.9 million in 2007, the researchers said.
The federal government is now trying to stabilize the market by offering incentives for lenders to modify the terms of delinquent mortgages and the Federal Reserve has pledged to buy as much as $1.25 trillion in mortgage-backed securities to free up funding for new home loans.
When recovery comes, immigrants and children born to the post-World War II baby-boom generation will lead it, the Harvard researchers said.
So-called “echo boomers will help keep demand strong for the next 10 years and beyond” as they turn 25-44 years old, according to the report.
“Even under the low immigration assumptions, minorities will fuel 73 percent of household growth in 2010-20, with Hispanics leading the way at 36 percent,” researchers found.
Minority households have been hit harder by the recession and the housing slump than whites, according to the report.
The unemployment rate for black residents in April was 15 percent compared with 8 percent for whites, the report said. In low-income minority neighborhoods, the median foreclosure rate was 8.4 percent compared with 6.3 percent in low-income white neighborhoods from January 2007 through June 2008.
Even as falling prices have made homes more affordable, roadblocks to buying remain, including the difficulty of getting a mortgage as lenders require bigger down payments and higher incomes to qualify for a mortgage, the report said.
“The home buying market will continue to struggle until the foreclosure crisis comes to an end,” the report said. “Although new federal efforts may prevent millions of families from losing their homes, mounting job losses will likely keep foreclosures at elevated levels.”
BRIC Dollar Bonds Beat Ruble Debt as Medvedev Frets (Update2)
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By Laura Cochrane and Lester Pimentel
June 17 (Bloomberg) -- For all the criticism of the U.S. currency by leaders of the so-called BRIC nations, dollar bonds sold by the largest emerging-market countries are outperforming debt traded in reais, rubles and yuan.
Russian President Dmitry Medvedev, Chinese President Hu Jintao, Indian Prime Minister Manmohan Singh and Brazilian President Luiz Inacio Lula da Silva called for a “more diversified” monetary system yesterday to reduce dependency on the world’s reserve currency. The four leaders met in the Urals city of Yekaterinburg, where they planned to discuss buying each other’s bonds and foreign exchange, said Arkady Dvorkovich, Medvedev’s top economic adviser.
“It’s not up to politicians to determine which currency will be the world reserve currency,” said Lutz Karpowitz, a currency strategist at Commerzbank AG in Frankfurt. “In the end the market decides it.”
Dollar bonds sold by China earned 11.4 percent in the past year, more than double the 4.6 percent for debt in yuan, JPMorgan Chase & Co. indexes show. Brazil’s U.S. currency bonds returned 3.6 percent as real-based notes lost 4.9 percent, and Russia’s dollar bonds outperformed with a 1.9 percent loss compared with a 7 percent drop in ruble debt. India doesn’t have dollar-denominated debt.
Bonds sold in dollars have beaten domestic debt in part because Russia and China manage the ruble and yuan. Those denominated in the U.S. currency can trade more freely, giving fund managers confidence they can sell the securities and get their money when they need it.
The result is limited foreign investment in local-currency bond markets, said Ward Brown, who manages $5 billion of emerging-market debt at Massachusetts Financial Services in Boston. Only Brazil’s real is free-floating. India imposes capital controls to protect the rupee.
China and India are “highly restrictive on the local debt side” and Russia has “quite an illiquid market” for foreign investors, said Cristina Panait, an emerging-market strategist at Los Angeles-based Payden & Rygel, which manages more than $50 billion. “Currency performance is a big portion of returns.”
The real rallied 11.2 percent last month, the ruble gained 6.9 percent and the rupee rose 6.4 percent against the dollar. The yuan appreciated 21 percent between July 2005, when the government allowed it to trade more freely, and July 2008. China has prevented the currency from strengthening since then as the economy slowed.
The Chinese government today sold 28.27 billion yuan ($4.13 billion) of yuan-denominated bonds maturing in 2019.
Political and financial leaders in the BRIC countries say they want to take a larger role in the world financial system as their foreign reserves swell and the U.S. economy endures its worst crisis since the 1930s. The Dollar Index, which measures the U.S. currency against those of six trading partners, has dropped 9.4 percent from a three-year high in March.
The BRICs account for 15 percent of the world economy and hold $2.8 trillion in foreign-currency reserves, or about 42 percent of the total, according to data compiled by Bloomberg.
Last week, Russia and Brazil announced plans to buy $20 billion of bonds from the International Monetary Fund, after China said it was considering purchasing $50 billion of the securities. The purchases would both support the IMF, established to help nations rebuild from the ruins of World War II, and diversify some of their holdings.
The BRIC leaders, among the biggest holders of U.S. assets, alternate between critiques of the dollar and support. Premier Wen Jiabao called in March for the U.S. “to guarantee the safety of China’s assets” and central bank Governor Zhou Xiaochuan the same month proposed a new global currency to reduce reliance on the dollar.
Treasury Secretary Timothy Geithner said on June 2 Chinese leaders hadn’t expressed concern about the safety of U.S. debt during meetings in Beijing and said they “expect the dollar to be the principal reserve currency for a long period of time.”
Medvedev said earlier this month that the dollar wasn’t in a “spectacular position.” On June 13, Finance Minister Alexei Kudrin reassured investors of the country’s confidence in the greenback by saying it was “still early to speak of other reserve currencies.”
In May, China and Brazil began studying a proposal to move away from the dollar to settle trade and use yuan and reais instead. Brazilian Finance Minister Guido Mantega said on June 10 the government’s decision to switch reserves into IMF bonds wasn’t aimed at weakening the dollar.
The leaders of the BRIC nations didn’t discuss the possibility of buying each other’s bonds during the summit in Yekaterinburg yesterday, Brazilian President Luiz Inacio Lula da Silva told reporters today in Astana, the capital of Kazakhstan.
Medvedev and Hu are meeting today in Moscow.
China trimmed its holdings of U.S. Treasuries by $4.4 billion to $763.5 billion in April, Russia’s slipped by $1.4 billion to $137 billion and Brazil’s by $600 million to $126 billion. In May, the BRIC nations spent more than $60 billion buying foreign currencies, mainly dollars, to stop their currencies from gaining, according to central bank data and strategist estimates.
While the ballooning budget deficit is keeping the U.S. reliant on foreign financing, the world’s biggest economy is almost double the size of Brazil, Russia, India and China combined, based on 2008 figures compiled by Bloomberg. America’s market sustains the world’s biggest developing nations, with China increasing sales to the U.S. to $337.7 billion last year from $321.4 billion in 2007.
The dollar accounted for 64 percent of central bank reserves worldwide at year-end, up from 62.8 percent in June 2008, according to the IMF. The currency has underpinned exchange rates since the 1971 collapse of the Bretton Woods system, which linked their value to gold.
Statements about changing the global foreign exchange system are “just a political gesture,” said Pablo Cisilino, who manages $10 billion in emerging-market debt at Stone Harbor Investment Partners in New York. “At the end of the day, there is only one reserve currency on the planet.”
Calif. Aid Request Spurned By U.S.
Officials Push State To Repair Budget
By David Cho, Brady Dennis and Karl Vick
Washington Post Staff Writers
Tuesday, June 16, 2009
The Obama administration has turned back pleas for emergency aid from one of the biggest remaining threats to the economy -- the state of California.
Top state officials have gone hat in hand to the administration, armed with dire warnings of a fast-approaching "fiscal meltdown" caused by a budget shortfall. Concern has grown inside the White House in recent weeks as California's fiscal condition has worsened, leading to high-level administration meetings. But federal officials are worried that a bailout of California would set off a cascade of demands from other states.
With an economy larger than Canada's or Brazil's, the state is too big to fail, California officials urge.
"This matters for the U.S., not just for California," said U.S. Rep. Zoe Lofgren, who chairs the state's Democratic congressional delegation. "I can't speak for the president, but when you've got the 8th biggest economy in the world sitting as one of your 50 states, it's hard to see how the country recovers if that state does not."
The administration is worried that California will enact massive cuts to close its deficit, estimated at $24 billion for the fiscal year that begins July 1, aggravating the state's recession and further dragging down the national economy.
After a series of meetings, Treasury Secretary Timothy F. Geithner, top White House economists Lawrence Summers and Christina Romer, and other senior officials have decided that California could hold on a little longer and should get its budget in order rather than rely on a federal bailout.
These policymakers continue to watch the situation closely and do not rule out helping the state if its condition significantly deteriorates, a senior administration official said. But in that case, federal help would carry conditions to protect taxpayers and make similar requests for aid unattractive to other states, the official said. The official did not detail those conditions.
California is among several states that have asked for a bailout from the Treasury Department. A few have gotten some traction, notably Michigan, whose economy is among the country's weakest and is struggling to deal with the fallout from the bankruptcies of General Motors and Chrysler. To stave off mass layoffs, Treasury officials are considering helping the state's auto suppliers stay afloat and convert their businesses to support other industries.
California Controller John Chiang, a Democrat, warned last week that the state was "less than 50 days away from a meltdown of state government."
While its fiscal crisis is severe, experts say the state is unlikely to default on what it owes, even if it runs out of cash. It can raise money through taxes and other means to assure repayment of its debt. Most likely are massive cuts in public services.
"After June 15th, every day of inaction jeopardizes our state's solvency and our ability to pay schools and teachers and to keep hospitals and ERs open," Gov. Arnold Schwarzenegger (R) said Friday.
Problems unique to California have made it hard for the state to find a way out of its crisis.
The state entered the downturn burdened with an inflexible budgeting apparatus, constrained by a state ballot initiative approved by voters in 1978 that severely limited property taxes in California. The signature example of "ballot box budgeting" left the Golden State inordinately reliant on the personal income tax, which accounts for half of revenue to Sacramento.
California's budget is also heavily dependent on taxes paid on capital gains and stock options, which have been clobbered during the meltdown of financial markets. State budget analysts made their annual estimate of revenue a month before the crisis spiked in the fall and have been backpedaling ever since.
"Those revenue projections turned out to be wildly optimistic, but nobody was predicting the October collapse of the financial markets," said Michael Cohen, deputy analyst in the Legislative Analyst's Office.
Consider capital gains -- income from sales of stocks or other assets. In California, that income dropped to $52 billion in 2008 from $130 billion a year earlier. It is estimated to be $36 billion this year.
By February, the shortfall was projected at $42 billion over two years. Lawmakers stared at the figure for weeks, stymied by the state constitution's requirement that the budget pass with two-thirds of the legislative vote and their own profound partisanship. The deadlock broke when a moderate Republican defied his caucus's pledge against any tax hike, but it didn't end there.
In April, budget analysts revised revenue projections downward by another $12 billion. And in May, voters overwhelmingly rejected the portions of the February deal that legally had to be put before them, taking $6 billion off the table.
To close an annual gap now put at $24 billion, Schwarzenegger and leaders of the legislature's Democratic majority have put aside talk of tax increases to concentrate on cuts. Most dramatically, Schwarzenegger would eliminate the state's basic welfare program, which serves 1.3 million.
Facing gridlock and few options other than severe cuts, California began to look to Washington for help. State Treasurer Bill Lockyer sent a letter to Geithner in mid-May, urging him to consider helping cash-strapped municipalities.
"A fiscal meltdown by California or any other large state or municipality would surely destabilize the U.S., if not worldwide, financial markets," Lockyer wrote. If the state were to default, it could shake bond markets and undermine investor confidence in a still-fragile financial system.
Tom Dresslar, a spokesman for Lockyer, said California will not default on its general obligation debts. But by late July, the state conceivably could run out of money to operate, as revenue continues to deteriorate while costs keep mounting. "The problem is getting worse, certainly not getting better," he said.
In testimony before Congress, Geithner did not rule out aiding California. But he was far from enthusiastic about such a proposal, instead suggesting that Congress was better positioned to help the states -- and that states should balance their budgets.
"A lot of the burden," Geithner said, "is going to be on them to lay out a path that gets their deficits down to the point where they're going to be able to fund themselves comfortably."
Most members of California's congressional delegation have also been ambivalent about whether to press for federal help.
State officials are "not expecting any help from the federal government," Dresslar said. "At this point, we're on our own."
オバマの財政出動である“ＳＴＩＭＬＵＳ・ＰＬＡＮ は賭博性が高い”と警告が出ている。それも、ホワイトハウスのスタッフたちからだ。来年１１月の中間選挙で、共和党に負けるかも知れないと、、日本の知識階級は知っているべき「流れの変化」なのです。オバマの発言に弱気が見え隠れする。この＄７８７０億ドルの景気刺激策を大半撤回する可能性が高い。英文ですが、読んで下さい。伊勢平次郎 メリーランドにて、
Obama's Spending Plans May Pose Political Risks
Concern Mounts in White House as 2010 Elections Loom
By Scott Wilson
Washington Post Staff Writer
Sunday, June 14, 2009
After enjoying months of towering poll numbers, legislative victories and well-received foreign policy initiatives, the White House has become increasingly concerned that President Obama's spending plans, which would require $9 trillion in government borrowing over the next decade, could become a political liability that defines the 2010 midterm elections.
Trims to Medicare, Medicaid Are Proposed to Help Fund Reform
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The concern was reflected in the aggressive response from administration officials to criticism that money from Obama's stimulus plan is arriving too slowly to help the languishing economy, as well as in the president's public endorsement of "pay as you go" legislation, which would require Congress to make room for new non-discretionary spending with equivalent cuts to other parts of the budget. Yesterday, Obama also outlined billions of dollars in savings that would be used to pay for his health-care reform proposal.
But there is evidence of growing public concern over his fiscal policies. As he traveled Thursday in Green Bay, Wis., Obama was greeted by demonstrators holding signs that said, "No socialism" and "Taxed Enough Yet?"
Republican leaders, who have been searching for a way to dent the president's popularity, are training their attacks on his economic policies as they look ahead to the 2010 midterm congressional elections. Their argument that Obama is spending recklessly, however, is complicated by the fact that the previous GOP administration's tax cuts, borrowing to finance wars in Iraq and Afghanistan, and expansion of entitlement benefits remain the chief drivers behind the rising debt.
"The reckless fiscal policies of the past have left us in a very deep hole," Obama said last week. "And digging our way out of it will take time, patience and some tough choices."
But even some leaders in his own party are calling on the president to soon begin making those difficult choices, despite a fragile economy that remains in recession.
After inheriting a $1.3 trillion annual budget deficit upon taking office, Obama pushed through $787 billion in short-term spending and tax cuts designed to make up for retreating private-sector demand and to spark the economy. He also won approval for a 10-year budget that aspires to sharply reduce the deficit in its first years and takes on the rising cost of health care, which his advisers say is the single biggest cause of increasing public expenditures.
But Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, said, "The second five years is where we're on a completely unsustainable course."
"People know we have an overall situation here that doesn't add up," he said.
Results from a Gallup survey released last week show that although more than six in 10 Americans approve of Obama's overall job performance, fewer than half say they approve of how he is handling the deficit and controlling federal spending. The poll also shows a decline from the previous month in the percentage of Americans who approve of Obama's handling of the economy, although a majority still does.
During a town hall forum in New Mexico last month, Obama acknowledged that the "long-term deficit and debt that we have accumulated is unsustainable." The statement followed several fiscal reform initiatives, including changes in defense procurement policy, that advisers say will save tens of billions of dollars a year.
Other measures have held a whiff of desperation. In April, he publicly instructed his Cabinet secretaries to find $100 million in savings, a fraction of the more than $3 trillion annual budget.
"Everything that the White House does concerning this deep recession contains an element of gambling because no one has been here before," said Robert B. Reich, labor secretary under President Bill Clinton and a professor of public policy at the University of California at Berkeley. "There's no formula that can be applied, and that's why the president's popularity and credibility are vitally important."
Trims to Medicare, Medicaid Are Proposed to Help Fund Reform
Obama's Spending Plans May Pose Political Risks
Spending in Perspective
Special Report: Health-Care Reform 2009
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Reich noted, "Very soon we'll be in the gravitational pull of the midterm elections, and it seems clear that Republicans want to challenge Obama on the economy and will run on tax cuts, deficit reduction, and a much more scaled-down and privatized health-care plan."
"If they can get their act together and come up with something that is halfway respectable, and if the public begins to lose patience by Election Day, Democrats could have some real problems," he said. "And those problems, of course, could possibly extend through 2012."
Those concerns about spending and deficits are not confined by U.S. borders. Treasury Secretary Timothy F. Geithner traveled to China this month to assure leaders there that "we will cut our deficit and we will eliminate our extraordinary government support that we have put in place to overcome the crisis." Traveling in Germany this month, Obama responded to Chancellor Angela Merkel's concerns that U.S. spending could lead to global inflation and undermine the stability of U.S. debt.
Analysts say Obama's spending plans reflect not only the depth of the economic crisis but also a fiscal philosophy that differs from that of the last Democratic administration.
Clinton, a former governor, took office during a far milder recession and was unable to pass a much smaller stimulus package than Obama's. Clinton ended his tenure with budget surpluses after reducing federal spending as a share of the gross domestic product -- fiscal discipline that did not survive the Bush administration.
"President Clinton believed in the public sector, but he thought that his responsibility to the long-term fiscal condition of the country ruled out a significant expansion of the government in the economy as a whole," said William A. Galston, a former Clinton policy adviser who is a senior fellow at the Brookings Institution. "What is unmistakably clear is that the trajectory of the Obama administration -- whether it's four years or eight years in office -- will be the reverse."
The administration is responding to public concerns over the nation's fiscal health and the political threat it may pose. Rahm Emanuel, Obama's chief of staff, said that a quick economic recovery would have the single biggest effect on the grim budget forecasts and that the administration's top priority will be "getting America's fiscal house in order" once Congress finishes work on health-care and energy reform legislation.
"There's two parts to fiscal reform: cutting and cost controls," Emanuel said. "At the end of the day, you're going to have to look at tax reform as part of the long-term fiscal health of the country. But if you change Medicare, Medicaid and other big drivers of costs, you're going to get enormous savings."
The cost of extending health insurance to the 47 million uncovered Americans is estimated to be as high as $1.2 trillion over the next decade, and administration officials say they are not sure how much the overhaul will save the federal budget over the long term.
In Obama's radio address yesterday, he outlined $313 billion in savings and spending cuts over the next 10 years to help pay for the initiative, including adjusting Medicare payments to reflect efficiencies in the health-care system, reducing hospital subsidies for treating uninsured patients as coverage expands to more people, and lowering drug reimbursements for those eligible for both Medicare and Medicaid. In total, Obama said, the administration has identified $948 billion of the projected costs, although those estimates will probably be challenged by congressional auditors.
Peter Orszag, director of the Office of Management and Budget, told reporters last week: "We've never changed our health-care system towards a best-practices one. So quantifying exactly what their impact is is very difficult. But what I want to be very clear about is -- at worst, this will be deficit-neutral."
Some Democratic champions of health-care reform, including Galston, say slowing the growth of medical costs could cut entitlement spending, reduce the need for borrowing and lead to significant long-term savings.
"The problem is that very few health-care experts believe that the measures proposed so far have any reasonable chance of achieving those savings," Galston said.
Obama and his advisers hope that by the 2010 elections, the stimulus spending, the bank rescues and other measures will have pushed the economy into recovery.
But some economists warn that any short-term economic improvement will probably resemble the "jobless recovery" of the early 1990s, given the loss of jobs in the manufacturing, construction, retail and other sectors. Democrats were trounced in midterm elections two years after Clinton took office, partly because the economic recovery then underway had not significantly reduced unemployment.
Chris Edwards, director of tax policy studies at the conservative Cato Institute, said the large federal deficits of the 1980s and early 1990s rallied public support for legislation that constrained government spending -- a sentiment Obama appealed to last week in urging Congress to enact the "pay as you go" rules into law. Ross Perot, for example, built a potent third-party campaign in 1992 on the issue of deficit reduction.
"There's a potential there that the seemingly out-of-control fiscal situation in Washington could galvanize the public," Edwards said. "The question is whether the Republicans will be smart enough to take advantage of this."
と警報を鳴らした。英文だが、たいへん重要なことです。読んでください。伊勢平次郎 ルイジアナBernanke Warns Deficits Threaten Financial Stability
June 3 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said large U.S. budget deficits threaten financial stability and the government can’t continue indefinitely to borrow at the current rate to finance the shortfall.
“Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth,” Bernanke said in testimony to lawmakers today. “Maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance.”
Bernanke’s comments signal that the central bank sees risks of a relapse into financial turmoil even as credit markets show signs of stability. He said the Fed won’t finance government spending over the long term, while warning that the financial industry remains under stress and the credit crunch continues to limit spending.
The Fed chief said in his remarks to the House Budget Committee that deficit concerns are already influencing the prices of long-term Treasuries.
Yields on 10-year notes have climbed about 1 percentage point since the Fed announced plans in March to buy $300 billion of long-term government bonds. The notes yielded 3.54 percent at 5 p.m. in New York, down from 3.61 percent late yesterday, as Bernanke’s warnings on the need to reduce the deficit supported the market.
Rise in Yields
“In recent weeks, yields on longer-term Treasury securities and fixed-rate mortgages have risen,” Bernanke said. “These increases appear to reflect concerns about large federal deficits but also other causes, including greater optimism about the economic outlook, a reversal of flight-to-quality flows and technical factors related to the hedging of mortgage holdings.”
The budget deficit this year is projected to reach $1.85 trillion, equivalent to 13 percent of the nation’s economy, according to the nonpartisan Congressional Budget Office.
“Either cuts in spending or increases in taxes will be necessary to stabilize the fiscal situation,” Bernanke said in response to a question. “The Federal Reserve will not monetize the debt.”
Bernanke also addressed banks’ efforts to bolster common equity in the aftermath of regulators’ stress tests on the 19 largest U.S. lenders. He said the 10 firms that were found to have a total capital shortfall of $75 billion have now sold or announced plans to boost common equity by $48 billion.
“We expect further announcements shortly” as the banks submit plans due by June 8, Bernanke said.
This year’s projected budget deficit, four times the size of last year’s shortfall, has been driven up mostly by costs associated with the financial crisis.
“Bernanke knows that fiscal financing problems are already complicating monetary policy and are in danger of undermining Fed credibility,” said Alan Ruskin, chief international strategist at RBS Securities Inc. in Stamford, Connecticut. “He knows that there is only so much quantitative-easing financing that can be done.”
A fiscal stimulus of almost $800 billion, the government’s financial rescue effort, takeovers of Fannie Mae and Freddie Mac and increased costs of running safety-net programs such as unemployment insurance have added billions to spending.
President Barack Obama has pledged to halve the deficit by the end of his term. Even if successful, his administration anticipates the government will still run what would be, by historical standards, large deficits for the foreseeable future. Bernanke said the debt-to-gross domestic product ratio is set to reach the highest since the 1950s.
“It is fine to have this budget deficit now,” said Alan Blinder, a Princeton University economics professor and former Fed vice chairman. “It will also be a long hard slog to get the budget deficit down to a manageable level.”
House Majority Leader Steny Hoyer told reporters that Bernanke “is absolutely right, we need to be very concerned about incurring additional indebtedness.” The House plans to pass legislation before its July 4 recess to cut spending in one category before increasing it in another, he said. In addition, “we need to address entitlements.”
Treasury Secretary Timothy Geithner, in an interview with Bloomberg Television May 21, said the administration’s goal is to cut the budget shortfall to 3 percent of GDP or smaller.
Rising government spending, forecasts for a record fiscal deficit and an unprecedented expansion of central bank credit have also fueled investor concerns that inflation will rise. Bernanke said inflation “will remain low” as the economy operates with slack resource use.
Wisconsin Representative Paul Ryan, the ranking Republican on the committee, said in opening remarks that the Treasury’s debt issuance and the Fed’s monetary stimulus, including purchases of government bonds, “can be a dangerous policy mix” and risks “runaway inflation” in the longer term.
Ryan said he’s concerned about “substantial” political pressure on the Fed to delay plans to tighten credit should unemployment remain high.
“The Fed’s political independence is critical and essential for safeguarding its commitment to price stability,” Ryan said. “We policy makers should realize that our most challenging policy period is going to be ahead of us.”
In Europe, German Chancellor Angela Merkel said yesterday she views “with great skepticism what authority the Fed has and the leeway the Bank of England has created for itself,” to purchase a range of assets in their efforts to end the crisis. She urged central banks to return to a “policy of reason.”
Asked by a lawmaker about Merkel’s comments, Bernanke said, “I respectfully disagree with her views.”
“I am comfortable with the policy actions that the Federal Reserve has taken,” he said. “We are comfortable that we can exit from those policies at the appropriate time without inflationary consequences.”
The central bank is buying as much as $1.75 trillion of housing debt and Treasuries this year to lower borrowing costs across the economy after reducing the benchmark interest rate almost to zero in December. Fed officials hold their next policy meeting June 23-24 in Washington.
Bernanke said during the hearing he wouldn’t support any measure that would have the Fed’s 12 regional Fed bank presidents nominated by the White House and confirmed by the Senate. Fed bank presidents are currently appointed by the regional bank boards with the approval of the Board of Governors. （解説）