Carl Icahn Billionaire
Gross Says Icahn Should Leave Apple Alone and Help People
By Alexis Leondis - Oct 24, 2013 3:31 PM CT
Bill Gross, manager of the world’s largest mutual fund, said fellow billionaire investor Carl Icahn should stop pushing Apple Inc. (AAPL) for additional share buybacks.
“Icahn should leave Apple alone and spend more time like Bill Gates,” Gross, who runs the $250 billion Pimco Total Return Fund (PTTRX) at Pacific Investment Management Co. in Newport Beach, California, wrote in a message on Twitter today. “If Icahn’s so smart, use it to help people not yourself.”
Icahn, who has taken stakes and agitated for stockholder friendly changes at companies from Dell Inc. (DELL) to Transocean Ltd. (RIG), said in a Bloomberg Television interview yesterday with Trish Regan that Apple should buy back $150 billion of shares and criticized the board for not acting to enhance value. In backing Apple’s management, Gross joins Warren Buffett, who has said that companies shouldn’t be run primarily to please shareholders who may then sell.
Icahn is ranked 34th on the Bloomberg Billionaires Index of the world’s richest people, with a net worth of $21 billion. In 2012, he pledged $200 million to the Mount Sinai School of Medicine, the biggest donation ever given to the New York City teaching hospital. He’s also endowed five charter schools in the city and has signed Buffett’s and Gates’s Giving Pledge, which encourages the world’s richest to give the majority of their wealth to charity.Gross’s Wealth
Gross’s personal wealth is estimated at $2 billion. The 69-year-old has endowed a foundation with $293 million in assets and raised money for Doctors Without Borders, a medical charity, by selling parts of his stamp collection. He gave $20 million to Cedars-Sinai Medical Center last year and $20 million to Mercy Ships, an international medical charity, in August.
Mark Porterfield, a spokesman for Pimco, confirmed the Twitter message was posted by Gross. He declined to comment on whether Gross has signed the giving pledge.
Gross’s Total Return Fund didn’t own any Apple bonds as of June 30, according to a regulatory filing. One of Pimco’s stock funds, EqS Pathfinder, had 23,059 shares of Apple as of June 30.Icahn’s Letter
In a letter to Apple Chief Executive Officer Tim Cook published today, Icahn said he increased his holding in the company to 4.7 million shares worth $2.5 billion from 3.4 million shares in August, and added that he intends to buy more of the stock that he said is undervalued.
Icahn, 77, didn’t immediately respond to a phone message left with his office.
While Apple co-founder Steve Jobs resisted calls to return cash to shareholders, Cook has shown a willingness to meet investor demands. In February, hedge-fund manager David Einhorn called for Apple to give more cash back and later sued to get the company to increase shareholder returns. The move was opposed by two of the best-known advocates for shareholder rights, the California Public Employees’ Retirement System and Institutional Shareholder Services.
In April, the Cupertino, California-based iPhone maker increased its payout and boosted its stock repurchase plan. Apple had $146.6 billion in cash and investments at the end of June.‘Hated’ Roosevelt
Buffett, in an interview on the CNBC television network broadcast this month, said he advised Apple a few years ago to use some of its cash to repurchase shares, though he doesn’t see a need for a larger share repurchase as demanded by Icahn.
“I do not think that companies should be run primarily to please Wall Street” and investors with a short-term perspective, Buffett said in the interview.
Investors who have weighed in on Apple include bond manager Jeffrey Gundlach, who runs the top performing DoubleLine Total Return Bond Fund. Last year, Gundlach told investors to bet against the shares before they started falling. During an interview on CNBC earlier this month, Gundlach said Apple was a “fairly safe” stock to own, yet doesn’t agree with people who say it’s a “no brainer” at $500 a share.
Apple gained 1.3 percent to $531.91 in New York. The stock is down 0.05 percent this year, compared with a 23 percent climb in the Standard & Poor’s 500 Index.
Icahn has clashed with other investors before. He engaged in a fight with Pershing Square Capital Management LP’s Bill Ackman over Herbalife Ltd. (HLF), a maker of nutritional supplements, and opposed Michael Dell’s leveraged buyout deal of Dell Inc.
“Bill Gross certainly has a right to his opinion,” Icahn said today in an interview on CNBC. “Theodore Roosevelt took on the whole establishment and was a very hated man.”
To contact the reporter on this story: Alexis Leondis in New York at firstname.lastname@example.org
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Abe Invokes Thatcherism as Reform Push Raises Disparity Risk
By Keiko Ujikane - Oct 21, 2013 2:39 AM CT
Japan’s Prime Minister Shinzo Abe evokes the late Margaret Thatcher as he repeats “there is no alternative” to his platform of economic change. One of the byproducts: prospects for a Thatcherite division of wealth.
Tomoko Kawamura, 33, a pharmaceutical-company worker in Tokyo, bought a Louis Garneau bicycle costing about 50,000 yen ($510) and a MacBook Air laptop with proceeds from stock investments this year. She owns a one-bedroom apartment in Tokyo’s well-heeled Meguro district. Eight hundred kilometers (500 miles) to the southwest in Ehime prefecture, Miyoko Yamazaki, 81, is struggling to cover the rising cost of gasoline for her regular hospital trips.
Pedestrians walk through a shopping street in Okayama, Japan. Around a quarter of households with more than one person in Japan don’t hold financial assets such as savings, life insurance, bonds and stocks, according to a Bank of Japan survey conducted last year. Photographer: Tomohiro Ohsumi/Bloomberg
Japan Should Focus on Medium-Term Growth, S&P Says5:26
Oct. 21 (Bloomberg) -- Takahira Ogawa, Singapore-based director of sovereign ratings at Standard & Poor’s, talks about the outlook for Japan's economic growth and the government policies. He speaks with Rishaad Salamat on Bloomberg Television's "On the Move." (Source: Bloomberg)
Fujitsu's Schulz on Japan Economy, Policy3:57
Oct. 21 (Bloomberg) -- Martin Schulz, a senior economist at Fujitsu Research Institute in Tokyo, talks about Japan's economy, government and central bank policies, and the yen. Exports in Japan increased less than expected in September, underscoring the challenge faced by Prime Minister Shinzo Abe in his effort to boost growth. Schulz speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
Enlarge image Commercial Buildings in Osaka
A man walks past commercial buildings in Osaka. Land prices as of July 1 in Japan’s three largest cities of Tokyo, Osaka and Nagoya rose for the first time in five years. Photographer: Tomohiro Ohsumi/Bloomberg
Office workers eat bento lunchboxes in Tokyo. Regular wages excluding overtime and bonuses fell 0.4 percent in August from a year earlier, extending the longest slide since 2010 to 15 months. Photographer: Robert Gilhooly/Bloomberg
“Prices are going up, making our lives tougher,” said Yamazaki, a retired taxi driver who doesn’t hold stocks or property. “I don’t really feel that the economy is booming.” In a restaurant on the 20th floor of a building with views over central Tokyo, Kawamura tells it differently: “I’m enjoying the benefits of Abenomics.”
The fortunes of Kawamura and Yamazaki exemplify the danger that Abenomics will impose social strains on an economy where the income gap between the richest 10 percent and the poorest is a less than a third that in the U.S. Pressure may rise for aid to the less fortunate, adding to the fiscal strain of a nation with the world’s largest debt burden.
“Abenomics, at least in its initial stage, is rewarding those who have assets, and the gap between the haves and the have-nots is widening,” said Soichi Okuda, chief economist at Sumitomo Shoji Research Institute, a think tank owned by Sumitomo Corp., Japan’s fourth-biggest trading house. “The fate of Abenomics, which aims to end deflation, will be determined by whether wages go up.”
Abe cited Thatcher in a speech in London in June, saying of his economic growth strategy: “There is no alternative,” a phrase the former U.K. prime minister used for her policies of monetarism, financial deregulation and restructuring of state industries in Britain in the 1980s.
Within seven years, Thatcherism had driven unemployment to a record of more than 3 million people and widened the gap between rich and poor. Yet her policies also reversed a sense of terminal decline, epitomized by the so-called winter of discontent in early 1979 when strikes by groups from teachers to rail workers plunged the country into crisis. Annual gross domestic product growth peaked at 6.6 percent in the first quarter of 1988.
While Thatcher gained power promising to quell inflation, Abe wants to stoke it. He’s trying to end a deflationary slump of more than 15 years through a mix of monetary and fiscal easing and measures to loosen industrial regulations to spark innovation. Even so, his policies may initially have a similar effect on wealth distribution.
“Abenomics could open up disparities in Japan,” said Seki Obata, an associate professor at Japan’s top-ranking Keio Business School in Yokohama. “Boosting stock and real-estate prices could widen the imbalance.”
Deepening disparities would mar a society that’s prided itself on homogeneity. Abe in June highlighted the observations a century and a half ago of Townsend Harris, citing the diary of the first U.S. ambassador to Japan: “They are all fat, well clad, and happy looking, but there is an equal absence of any appearance of wealth or of poverty -- a state of things that may perhaps constitute the real happiness of a people.”
Around a quarter of households with more than one person don’t hold financial assets, according to a Bank of Japan survey conducted last year.
Real disposable income for a typical family of four -- a company employee with annual earnings of 5 million yen, a full-time housewife and two children, will drop to 4.03 million yen in 2016, about 4 percent lower than now, according to Shungo Koreeda, a researcher at Daiwa Institute of Research Ltd. The calculation takes into account the plan to increase the sales tax to 8 percent in April from 5 percent, followed by a further increase to 10 percent in 2015.
The average income of Japan’s richest 10 percent is 4.5-times higher than that of the lowest decile, compared with 15.9-times in the U.S. and 13.8 times in the U.K., according to the United Nations’ 2008 Human Development Report.
Abenomics: Japan's Economic Therapy Explained
Japan’s Gini coefficient of 0.336 is lower than that for the U.K. and the U.S., which are 0.341 and 0.38, respectively, according to the Organization for Economic Cooperation and Development. The gauge of income inequality ranges from 0, for perfect equality, to 1, which implies one person holds all of a nation’s wealth.
As part of the reflationary push, BOJ Governor Haruhiko Kuroda committed to double the money circulating in the economy to help drive 2 percent inflation within about two years. Kuroda pledged again today to continue easing until the goal is achieved.
Boosting asset prices is one of the channels through which the central bank hopes to induce price rises. The Nikkei 225 Stock Average has risen about 40 percent this year, while the yen has weakened about 11 percent against the dollar -- helping exporters and pushing up import costs. Overseas shipments rose a less-than-estimated 11.5 percent in September, a government report showed today.
Consumer prices, excluding fresh food, increased 0.8 percent in August from a year earlier, the fastest pace since November 2008. Core prices are forecast to rise 2.78 percent in the fiscal year starting in April 2014, according to the median estimate of 41 economists surveyed by the Japan Center for Economic Research. The leap in the projections stems from the sales tax increase.
“The sales-tax will probably have a severe impact on low-income families with a lot of children and pensioners who don’t own a house or assets,” said Koreeda at Daiwa Institute. “It will be necessary to provide support for those people.”
For Yamazaki, who has to drive about 150 kilometers a month to see doctors, rising costs are already eating into her pension. Gasoline prices rose last month to the highest level since 2008, government data show.
Mos Food Services Inc., said last month it would raise the price of hamburgers at its Mos Burger restaurants for the first time in five years. Yakult Honsha Co., a maker of fermented milk products, said on Sept. 10 it would replace one of its drinks with a new version that costs 14 percent more -- its first price increase in 22 years. Sake-maker Nihon Sakari Co. announced in August the first price increase for its version of the national tipple in 19 years.
For property owners in the major cities, as in Thatcher’s Britain, the gains are boosting wealth. Land prices as of July 1 in Japan’s three largest cities of Tokyo, Osaka and Nagoya rose for the first time in five years.
“Looking at the office building market in central Tokyo, I feel that Abenomics is taking off and the economy is picking up,” said Sachiko Wakabayashi, 23, who works for a real estate agent in Tokyo.
The BOJ today raised its assessment of all nine of the nation’s regional economies.
In rural areas, land prices will keep falling as the population dwindles, said Takashi Ishizawa, chief real estate analyst at Mizuho Securities Co. in Tokyo. Prices will continue to rise in the larger cities where rents will also begin to climb next year, he said.
Salaries have yet to catch up. Regular wages excluding overtime and bonuses fell 0.6 percent in August from a year earlier, extending the longest slide since 2010 to 15 months.
It isn’t just pensioners feeling the pinch. Since graduating from university in 2011, 26-year-old Manabu Yokoyama hasn’t been able to find a permanent position.
“They say that the economy is improving under Abenomics, but I’m not feeling any benefit,” said Yokoyama at a Hello Work job center in central Tokyo. Since leaving college he’s only found part-time work at a fruit-processing factory and other places.
Kawamura has also seen her pay trimmed, but the stocks she bought in department-store operator Marui Group Co. and CMIC Holdings Co., a medical research service provider, made up for it by more than doubling in a year.
“Profits from stock investment are sort of making up for the decline in my bonus,” Kawamura said. “About 80 or 90 percent of my money is in bank savings, but I want to increase my investment in stocks.”
To contact the reporter on this story: Keiko Ujikane in Tokyo at firstname.lastname@example.org
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後ろの下院議員が共和党代表のジョン・べーナー。上院の合意を受けたべーナーは、「上院案を否定することはない」と明言した。これにて、１６日間続いたシャットダウンは、１月１５日の再協議まで普通に戻る。国債上限は、２月７日を期限として、再協議する。ああ、良かった、良かったというしかない。伊勢 ルイジアナCongress to Vote on Fiscal Deal as Boehner Concedes Loss
By Richard Rubin, Kathleen Hunter & Roxana Tiron - Oct 16, 2013 2:44 PM CT
Congress is poised to end the 16-day government shutdown and raise the U.S. debt limit after the bipartisan leaders of the U.S. Senate reached an agreement to end the nation’s fiscal impasse.
The Senate and House plan to vote on the deal later today, and the White House press secretary said President Barack Obama supports the deal.
“We fought the good fight,” House Speaker John Boehner, a Republican, said today on WLW, a radio station in his home state of Ohio. “We just didn’t win.”
Boehner said in a statement that Republicans won’t block the Senate compromise.
The agreement concludes a four-week fiscal standoff that began with Republicans demanding defunding of Obama’s 2010 health-care law and objecting to raising the debt limit and funding the government without attaching policy conditions. They achieved almost none of those goals in this agreement.
“This is far less than many of us had hoped for, frankly, but it’s far better than what some had sought,” said Mitch McConnell, the Senate minority leader, who said the measure retains Republican-preferred spending levels.
The framework negotiated by Majority Leader Harry Reid and McConnell would fund the government at those Republican-backed levels through Jan. 15, 2014, and suspend the debt limit until Feb. 7, setting up another round of confrontations then.
“This agreement achieves what is necessary,” said Jay Carney, the White House press secretary.House Republicans
The Senate accord was unveiled a day after Fitch Ratings put the U.S. AAA credit grade on ratings watch negative, citing the government’s inability to raise the debt ceiling in a timely manner, according to a statement after markets in New York closed.
U.S. stocks rallied, sending the Standard & Poor’s 500 Index toward a record. The benchmark index rose 1.1 percent to 1,717.58 at 2:41 p.m. in New York after sliding 0.7 percent yesterday.
Rates on Treasury bills maturing in the next six weeks fell amid optimism lawmakers worked to resolve the fiscal impasse. Rates on $120 billion of bills maturing tomorrow dropped to 0.03 percent after rising as high as 0.36 percent yesterday.
One-month rates fell 21 basis points, or 0.21 percentage point, to 0.14 percent at 2:46 p.m. in New York after touching 0.45 percent, the highest since October 2008, according to data compiled by Bloomberg. The benchmark 10-year yield fell five basis points to 2.68 percent, according to Bloomberg Bond Trader data.Economic ‘Stability’
“The compromise we reached will provide our economy with the stability it desperately needs,” Reid said.
The partial shutdown has closed national parks, slowed clinical drug trials and led to the furlough of thousands of federal workers. The Senate proposal would provide back pay for furloughed workers, said a Democratic aide speaking on condition of anonymity to discuss the plan.
The U.S. Chamber of Commerce, the country’s largest business group, supports the agreement. Several small-government groups, including the Club for Growth, are urging lawmakers to vote against the accord.
The Senate probably will vote before the House, said a House aide speaking on condition of anonymity because the plans aren’t set.Republicans Meet
House Republicans met for about 30 minutes and members, including Boehner, didn’t speak to reporters as they left the session.
Under the Senate agreement, House Republicans would get almost none of their priorities.
“If there is a silver lining in this cloud, it’s that hopefully this debacle means that the power of those that favor confrontation has peaked,” Senator Charles Schumer, a New York Democrat, said in a statement.
Republicans persisted after the partial government shutdown started Oct. 1 and saw their approval ratings drop in polls. Hardliners resisted plans that didn’t make major changes to the Patient Protection and Affordable Care Act.
Obama has described those requests for health-law changes as unacceptable ransom demands and insisted that Republicans relent.
Senator Kelly Ayotte, a New Hampshire Republican, questioned some other Republicans’ approach to the health law.‘Cannot Succeed’
“If they’re saying the defunding issue is going to come up again in three months, then they’ve learned nothing from this,” she said. “If we learned nothing else from this exercise, I hope we learned that we shouldn’t get behind a strategy that cannot succeed.”
Senator Ted Cruz, a Texas Republican who spoke against the health law for 21 hours last month, said he will continue to fight to make “Washington respond to the very real harms that Obamacare is causing.” He said he wouldn’t delay a Senate vote.
Some House Republicans said they wouldn’t vote for the Senate agreement.
“The Senate plan is not what I support,” Representative Jim Jordan of Ohio told reporters today. “My preference is that we address the underlying problem, which is we have a $17 trillion debt and we deal with the deficit problem and we treat people fairly under Obamacare.”
The Senate agreement trades the pressing and already-missed deadlines for new ones over the next four months. The Treasury Department would be allowed to use so-called extraordinary measures to delay default for about another month beyond Feb. 7, said a Senate Democratic aide who spoke on condition of anonymity to discuss the plan.Health Law
The accord includes a Republican-backed provision to tighten income-verification requirements for people receiving health-insurance subsidies, said two Senate Democratic aides who spoke on condition of anonymity to discuss the plan. The agreement won’t include a health-law provision backed by Democrats and labor unions that would delay a reinsurance fee on group health plans, the aides said.
Carney said the income-verification provision wasn’t a ransom.
Unless Congress acts, U.S. borrowing authority will lapse at the end of tomorrow, leaving the Treasury Department with only $30 billion in cash and incoming revenues to make promised payments. Without action, the U.S. will begin missing payments between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
Boehner tried several times over the past month to construct a debt-limit bill that House Republicans could support, and he hasn’t brought any proposals to a vote. Republicans didn’t have enough support for the measure yesterday, said a leadership aide who spoke on condition of anonymity to discuss vote counting.
Unlike previous stopgap spending measures, the final House bill wouldn’t have made big changes to the 2010 health-care law, and it contains no cuts to entitlement programs that Republicans sought to add to a debt-limit increase or spending bill.
To contact the reporters on this story: Richard Rubin in Washington at firstname.lastname@example.org; Kathleen Hunter in Washington at email@example.com; Roxana Tiron in Washington at firstname.lastname@example.org
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Gross Buying Bonds Tops Boehner’s Default Warning
Why the Market Is Not Afraid of a U.S. Default
U.S. financial conditions held at about the highest levels since before the worst financial crisis since the Great Depression as debt investors brushed off House Speaker John Boehner’s warning that America is on a “path” to defaulting on its debts.
While the Bloomberg U.S. Financial Conditions Index (BFCIUS) fell 0.08 to 1.2, that’s above the average of 1.11 this year and compares with the high in 2007 of 1.266. The gauge measures stress in the markets by combining everything from money-market rates to yields on government and corporate bonds to volatility in equities. During the debt-ceiling debate of August 2011, the index fell as low as negative 1.631.
Investors should buy three-, four- and five-year Treasuries and inflation-protected securities, Bill Gross, co-chief investment officer of Pacific Investment Management Co., said on Bloomberg Television on Oct. 1.
Pimco's Gross on U.S. Shutdown, Debt Ceiling
Oct. 1 (Bloomberg) -- Bill Gross, co-chief investment officer at Pacific Investment Management Co., talks about the impact of the U.S. government shutdown on the nation's economy and risks to U.S. Treasuries should the federal government default on its debt.
Pacific Investment Management Co. Co-Chief Investment Officer Bill Gross and BlackRock Inc. (BLK) Chairman and Chief Executive Officer Laurence D. Fink, who oversee $5.76 trillion, dismiss the possibility of a default. Boehner said that may happen if President Barack Obama doesn’t negotiate over the budget. The government stopped providing nonessential services last week after lawmakers couldn’t agree on a spending package.
“Despite the rhetoric, handwringing, name calling and finger pointing, the market believes a deal will ultimately be struck,” said Adrian Miller, director of fixed-income strategies at GMP Securities LLC in New York. “The markets are on edge, are defensive and increasingly concerned, but there is still hope that we will avoid a default.”
Treasury Secretary Jacob J. Lew said Congress needs to increase the $16.7 trillion borrowing limit by Oct. 17 or the nation risks defaulting on its payments.
Investors should buy three-, four- and five-year Treasuries and inflation-protected securities, Gross said on Bloomberg Television on Oct. 1. The government shutdown will end “very rapidly,” BlackRock’s Fink said Oct. 3 at an event hosted by the UCLA Anderson School of Management in Beverly Hills, California.
The yield on the benchmark 10-year U.S. Treasury note fell two basis points, or 0.02 percentage point, to 2.63 percent at 5 p.m.in New York, according to Bloomberg Bond Trader prices. The yield is down from the high this year of 3 percent on Sept. 6 and compares with the average of 3.53 percent over the past decade.
The U.S. two-year interest-rate swap spread, a measure of debt-market stress, fell 0.14 basis point to 12.86 basis points. The gauge typically narrows when investors favor assets such as corporate bonds and widens when they seek the perceived safety of government securities. The measure has dropped from this year’s high of 19.55 in June on a closing basis.
A gauge of U.S. company credit risk fell. The Markit CDX North American Investment Grade Index, a credit-default swaps benchmark that investors use to hedge against losses or to speculate on creditworthiness, climbed three basis points to a mid-price of 82.8 basis points, according to prices compiled by Bloomberg. The index, which typically climbs as investor confidence in credit deteriorates and falls as it improves, has ranged over the past three months from as high as 86.5 on July 5 to as low as 69.76 on Sept. 18.
The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major currencies, fell 0.2 percent to 1,008.13, the sixth decline in seven days. The index is has traded in a range of 1,008.4 and 1,054.48 the past three months. The greenback lost 0.8 percent to 96.71 yen, after touching 96.67, its weakest level since Aug. 12. The Japanese currency added 0.6 percent to 131.32 per euro.
The Standard & Poor’s 500 fell 0.9 percent to 1,676.12 in New York. The Dow Jones Industrial Average declined 136.34 points, or 0.9 percent, to 14,936.24.
Boehner Debt Limit Option Said to Be Democratic Votes
By Heidi Przybyla, Roxana Tiron & Richard Rubin - Oct 3, 2013 2:22 PM CT
U.S. House Speaker John Boehner has been telling fellow Republicans that he won’t allow the U.S. to default on its debt, even if that requires Democratic votes, according to two Republican congressional aides.
Boehner has been meeting with Republicans privately as he and other party leaders seek to come up with a plan to end the partial U.S. government shutdown and raise the debt limit. Party leaders are trying to package other Republican priorities with a debt-ceiling increase for a vote as soon as next week.
Enlarge image Boehner Options for Debt Limit Said to Include Democratic Votes
House Speaker John Boehner, a Republican from Ohio, speaks to the media after a meeting with U.S. President Barack Obama at the White House in Washington, D.C., on Oct. 2, 2013. Photographer: Andrew Harrer/Bloomberg
“Speaker Boehner has always said that the United States will not default on its debt, but if we’re going to raise the debt limit, we need to deal with the drivers of our debt and deficits,” Michael Steel, a spokesman for Boehner, said in a statement today.
“That’s why we need a bill with cuts and reforms to get our economy moving again.”
Republicans have a 232-200 majority in the U.S. House, meaning that the party can lose 15 votes from party members on any measure without seeking Democratic support.
Last month, Boehner outlined a debt-limit increase strategy that also included lighter regulations, cuts in entitlement programs and approval of TransCanada Corp. (TRP)’s Keystone XL pipeline.
The outline included means-testing Medicare, reducing the changes to malpractice law and eliminating social services block grants. Also being considered was a proposal to eliminate a requirement that gives regulators authority to seize and dismantle financial firms if their failure could damage the stability of the U.S. financial system.
Some Republican lawmakers, such as Representatives Paul Broun of Georgia and Mo Brooks of Alabama, said the plan didn’t do enough to cut spending, and Boehner shelved it in favor of focusing on a bill to fund the government and curb the Affordable Care Act.
Inside the party, every move Boehner makes to satisfy spending hard-liners risks losing the support of Republicans such as Peter King of New York and Charlie Dent of Pennsylvania, who support a stopgap spending bill without conditions.
On several fiscal issues, including the 2011 debt-limit increase and the lapse of tax cuts at the end of 2012, Boehner united Republicans around partisan bills to set a party position and then allowed a bipartisan vote on final deals reached by senators of both parties and President Barack Obama.
In both cases, the first version that passed the House received fewer than 20 Democratic votes and the final versions were backed by at least half of the Democrats.
The U.S. Treasury Department says the government will run out of borrowing authority Oct. 17. It will then have a cash balance that will run out between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
The Treasury Department issued a report today saying that the effects of failing to raise the debt ceiling would be catastrophic and could start a deep recession.
“The speaker’s said over and over again there’s no intention to default,” Representative James Lankford, an Oklahoma Republican, told reporters. “I don’t think there’s energy in the Republican conference to have any kind of default.”
Obama says he won’t negotiate about attaching policy conditions to the debt limit.
“The American people are not pawns in some political game,” he said today in Rockville, Maryland. “You don’t get to demand some ransom in exchange for keeping the government running. You don’t get to demand ransom in exchange for keeping the economy running.”
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