The Obama administration finally got the wake-up call that banks are doing little to counter the housing crisis that is still destroying the American dream of home ownership.
The Federal Housing Administration today ordered banks to extend the mortgage-payment grace period for unemployed homeowners to 12 months for the FHA and Making Home Affordable Program guaranteed loans.
Housing and Urban Development Secretary Shaun Donovan said the FHA new policy was required since few lenders took it upon themselves to voluntarily offer 12-month forbearance periods to unemployed homeowners. Banks have provided a four-month grace period, which amounts to spit in a bucket in a lousy economy like this one.
"We have been disappointed that more services haven’t gone beyond the four months. The reason we took this step now is that in every case that they are doing this, that they go to that 12 months," Donovan said.
"Part of why we are doing this, is to set a single standard, is to try to push the broader market to extend their unemployment programs and forbearance programs," Donovan said.
Obama, who is finally beginning to take a hard look in the rear-view mirror, admitted yesterday during his Twitter Town Hall that his administration’s policies aimed at countering the housing crisis were "not enough."
"The continuing decline in the housing market is something that hasn’t bottomed out as quickly as we expected," Obama said.
"And so we’re going back to the drawing board," he added.
Some observers believe Obama is taking another crack at easing the housing crunch as part of a re-election strategy, while others think he may have finally realized that he has given Wall Street and the banks a big wet kiss, even as their greed has turned the American Dream into a nightmare.
Thursday, July 7, 2011
Obama Didn't Embrace Twitter, at First
President Obama's decision to hold a Twitter Town Hall was an about-face for the commander-in-chief who only months ago in private conversations with aides would scoff at the 140-character social media format for its lack of depth and sophistication, according to sources with knowledge of those conversations.
In particular, Obama would get miffed at the news media for picking up the Twitter comments made by ex-GOP vice presidential candidate Sarah Palin. "He complained that 'They hang on her every word and report it without even questioning her directly,'" one informed source said this morning, quoting the President.
Obama, who fashions himself to be an accomplished writer of high-minded ideas and observations, began to warm up to Twitter as he saw the success his own aides and other politicians in Washington were having with the Internet medium.
As of last month, 13% of Americans who go online use Twitter, a 5% increase from last November, according to a Pew Research Center study. Twitter last month reported that about 200 million Tweets now move each day.
It was those details and others -- as well as the ability to do an end-around on the mainstream media and speak directly to Americans -- that prompted Obama to join Twitter Co-founder Jack Dorsey yesterday in the East Room of the White House, where the President took questions from 18 Twitter users in front of a live audience.
Of course, Obama is no neophyte when it comes to social media, having already done YouTube and Facebook town halls.
Obama drew more than 169,000 "Tweeted" questions and comments during his first-ever Twitter town hall from the White House, but as expected only answered a handful of those inquiries during the hour-long session -- and of course the questions he addressed had been screened by aides.
The President took questions on the budget, taxes and education, and even turned around an inquiry by GOP Speaker John Boehner who asked "Where are the Jobs?" In his in-your-face response, Obama accused the House Speaker of not cooperating with White House job-creation efforts.
In particular, Obama would get miffed at the news media for picking up the Twitter comments made by ex-GOP vice presidential candidate Sarah Palin. "He complained that 'They hang on her every word and report it without even questioning her directly,'" one informed source said this morning, quoting the President.
Obama, who fashions himself to be an accomplished writer of high-minded ideas and observations, began to warm up to Twitter as he saw the success his own aides and other politicians in Washington were having with the Internet medium.
As of last month, 13% of Americans who go online use Twitter, a 5% increase from last November, according to a Pew Research Center study. Twitter last month reported that about 200 million Tweets now move each day.
It was those details and others -- as well as the ability to do an end-around on the mainstream media and speak directly to Americans -- that prompted Obama to join Twitter Co-founder Jack Dorsey yesterday in the East Room of the White House, where the President took questions from 18 Twitter users in front of a live audience.
Of course, Obama is no neophyte when it comes to social media, having already done YouTube and Facebook town halls.
Obama drew more than 169,000 "Tweeted" questions and comments during his first-ever Twitter town hall from the White House, but as expected only answered a handful of those inquiries during the hour-long session -- and of course the questions he addressed had been screened by aides.
The President took questions on the budget, taxes and education, and even turned around an inquiry by GOP Speaker John Boehner who asked "Where are the Jobs?" In his in-your-face response, Obama accused the House Speaker of not cooperating with White House job-creation efforts.
Social Security, Medicare on the Table in Debt Negotiations
Updated at 3:45 p.m. edt
For the first time, GOP House Speaker John Boehner is telling members of his party there is a 50-50 chance there could be a deal in the next few weeks on raising the debt limit.
"We had a conversation. It was productive," Boehner said after returning to the Capitol from the White House meeting.
Sources disclosed the shift in Boehner's position after President Obama sweetened the pot in the debt-ceiling negotiations, floating a new plan to slash about $4 trillion in spending over the next decade, instead of the roughly $2 trillion in cuts that have been on the table until now.
According to The Washington Post, the President is prepared to offer a chunk of the savings in reductions or alterations to Social Security, Medicare and Medicaid, if Republicans abandon their refusal to eliminate corporate tax loopholes.
The President told all eight leaders from both parties of the House and Senate when they met today that he does not want to tackle the debt problem by only making the middle class and poor Americans feel the pain. They are expected to meet again Sunday.
"Everybody acknowledges that there's going to be pain involved politically on all sides," Obama said after what he described as a productive meeting.
But now the plan may be something he has to sell his liberal backers on, since Democrats and the progressives have said they haves said hands off the entitlement programs.
"Let us be clear, Social Security has not contributed one nickel to our deficit or our national debt. Social Security is funded by the payroll tax, not the U.S. Treasury," Vermont Independent Sen. Bernie Sanders said. "I am especially disturbed that the President is considering cuts in Social Security after he campaigned against cuts in 2008."
Obama wants a deal by July 22nd -- 10 days before the Aug. 2 drop-dead date when the U.S. starts defaulting on its bills and likely sends the financial markets into chaos.
For the first time, GOP House Speaker John Boehner is telling members of his party there is a 50-50 chance there could be a deal in the next few weeks on raising the debt limit.
"We had a conversation. It was productive," Boehner said after returning to the Capitol from the White House meeting.
Sources disclosed the shift in Boehner's position after President Obama sweetened the pot in the debt-ceiling negotiations, floating a new plan to slash about $4 trillion in spending over the next decade, instead of the roughly $2 trillion in cuts that have been on the table until now.
According to The Washington Post, the President is prepared to offer a chunk of the savings in reductions or alterations to Social Security, Medicare and Medicaid, if Republicans abandon their refusal to eliminate corporate tax loopholes.
The President told all eight leaders from both parties of the House and Senate when they met today that he does not want to tackle the debt problem by only making the middle class and poor Americans feel the pain. They are expected to meet again Sunday.
"Everybody acknowledges that there's going to be pain involved politically on all sides," Obama said after what he described as a productive meeting.
But now the plan may be something he has to sell his liberal backers on, since Democrats and the progressives have said they haves said hands off the entitlement programs.
"Let us be clear, Social Security has not contributed one nickel to our deficit or our national debt. Social Security is funded by the payroll tax, not the U.S. Treasury," Vermont Independent Sen. Bernie Sanders said. "I am especially disturbed that the President is considering cuts in Social Security after he campaigned against cuts in 2008."
Obama wants a deal by July 22nd -- 10 days before the Aug. 2 drop-dead date when the U.S. starts defaulting on its bills and likely sends the financial markets into chaos.
Tuesday, July 5, 2011
So Far, No Movement on Looming Debt Crisis
Updated at 5:45 p.m. EDT
President Obama said today he wants "to do something big" to tackle the deficit and debt problem, not just agree to a quick fix like the stunt-like approach GOP. Sen John Cornyn pitched with his proposal to only do a "mini deal" for now.
"Now, I've heard reports that there may be some in Congress who want to do just enough to make sure that America avoids defaulting on our debt in the short term but then wants to kick the can down the road when it comes to solving the larger problem of our deficit," Obama said during an appearance in the White House briefing room.
"I don't share that view. I don't think the American people here sent us here to avoid tough problems. That's, in fact, what drives them nuts about Washington, when both parties simply take the path of least resistance, and I don't want to do that here. I believe that right now we've got a unique opportunity to do something big, to tackle our deficit in a way that forces our government to live within its means, that puts our economy on a stronger footing for the future and still allows us to invest in that future," Obama added.
Obama invited the leaders of Congress back to White House Thursday for another debt limit negotiation, saying lawmakers need to check their agendas at the door.
"Even as we continue discussions today and tomorrow, I have asked leaders of both parties and both houses of Congress to come here to the White House on Thursday, so we can build on the work that's already been done and drive towards a final agreement," Obama said. "It's my hope that everybody's going to leave their ultimatums at the door, that we'll all leave our political rhetoric at the door, and that we're going to do what's best for our economy and do what's best for our people."
Obama repeated his vision of "a balanced approach" that includes cutting "spending in domestic programs, in defense programs, in entitlement programs," as well as "spending in the tax code, spending on certain tax breaks and deductions for the wealthiest of Americans."
"This will require both parties to get out of our comfort zones, and both parties to agree on real compromise," Obama said. "I'm ready to do that. I believe there are enough people in each party that are willing to do that. And what I know is that we need to come together over the next two weeks to reach a deal that reduces the deficit and upholds the full faith and credit of the United States government and the credit of the American people."
---[
There was some talk over the weekend of a potential mini-deal on the looming debt crisis, but the White House says that is all it was: Talk. President Obama, as of now, wants a full deal and does not want a Band-Aid approach, rejecting the idea floated by Sen. John Cornyn (R-Tex.).
So the U.S. Senate is in session today with the hope of resolving the debt crisis ahead of a hard Aug. 2 deadline. Obama has set his own deadline of July 22 to allow the review of the final dead, once it is reached.
The federal debt stands at $14.3 trillion.
The GOP leadership also will have to sell any deal that includes new revenue to its rank and file members, especially the Tea Party faction which has taken up the cause of protecting the rich from tax increases and corporations from having to give up their tax loopholes.
At Obama's urging, Senate Democratic leader Harry Reid called the Senate into session, foregoing its usual Fourth of July holiday break.
If Republicans and Democrats do not raise the federal debt limit it would put the federal government in the position of defaulting on some of its bills and that would likely send the financial markets into a tailspin. There are fears that it could trigger another economic crisis on par with what we saw in 2008 at the end of the Bush administration.
Republicans want about $2 trillion in budget cuts, while Obama is looking for somewhere in the vicinity of $400 billion in tax loopholes wiped off the slate. For the first time, the White House reportedly has signaled that it would consider cuts to Medicare and Medicaid, if Republicans will bend on their refusal to allow the elimination of the corporate tax loopholes.
Obama has proposed eliminating tax breaks for the hugely profitable oil and gas industry, hedge fund managers and owners of corporate jets.
The debt fund debate comes as The New York Times reports that median pay for top executives at 200 large companies last year was $10.8 million. Those salaries work out to a 23% gain for the CEOs over 2009 levels, as compared to only a .5% hike in pay for rank and file workers. Given inflation, workers on the bottom rung actually lost money.
Philippe P. Dauman, the chief executive of Viacom, stands atop the list with an $84.5 million salary last year, after inking new long-term deal that includes one-time stock awards, the Times reported.
President Obama said today he wants "to do something big" to tackle the deficit and debt problem, not just agree to a quick fix like the stunt-like approach GOP. Sen John Cornyn pitched with his proposal to only do a "mini deal" for now.
"Now, I've heard reports that there may be some in Congress who want to do just enough to make sure that America avoids defaulting on our debt in the short term but then wants to kick the can down the road when it comes to solving the larger problem of our deficit," Obama said during an appearance in the White House briefing room.
"I don't share that view. I don't think the American people here sent us here to avoid tough problems. That's, in fact, what drives them nuts about Washington, when both parties simply take the path of least resistance, and I don't want to do that here. I believe that right now we've got a unique opportunity to do something big, to tackle our deficit in a way that forces our government to live within its means, that puts our economy on a stronger footing for the future and still allows us to invest in that future," Obama added.
Obama invited the leaders of Congress back to White House Thursday for another debt limit negotiation, saying lawmakers need to check their agendas at the door.
"Even as we continue discussions today and tomorrow, I have asked leaders of both parties and both houses of Congress to come here to the White House on Thursday, so we can build on the work that's already been done and drive towards a final agreement," Obama said. "It's my hope that everybody's going to leave their ultimatums at the door, that we'll all leave our political rhetoric at the door, and that we're going to do what's best for our economy and do what's best for our people."
Obama repeated his vision of "a balanced approach" that includes cutting "spending in domestic programs, in defense programs, in entitlement programs," as well as "spending in the tax code, spending on certain tax breaks and deductions for the wealthiest of Americans."
"This will require both parties to get out of our comfort zones, and both parties to agree on real compromise," Obama said. "I'm ready to do that. I believe there are enough people in each party that are willing to do that. And what I know is that we need to come together over the next two weeks to reach a deal that reduces the deficit and upholds the full faith and credit of the United States government and the credit of the American people."
---[
There was some talk over the weekend of a potential mini-deal on the looming debt crisis, but the White House says that is all it was: Talk. President Obama, as of now, wants a full deal and does not want a Band-Aid approach, rejecting the idea floated by Sen. John Cornyn (R-Tex.).
So the U.S. Senate is in session today with the hope of resolving the debt crisis ahead of a hard Aug. 2 deadline. Obama has set his own deadline of July 22 to allow the review of the final dead, once it is reached.
The federal debt stands at $14.3 trillion.
The GOP leadership also will have to sell any deal that includes new revenue to its rank and file members, especially the Tea Party faction which has taken up the cause of protecting the rich from tax increases and corporations from having to give up their tax loopholes.
At Obama's urging, Senate Democratic leader Harry Reid called the Senate into session, foregoing its usual Fourth of July holiday break.
If Republicans and Democrats do not raise the federal debt limit it would put the federal government in the position of defaulting on some of its bills and that would likely send the financial markets into a tailspin. There are fears that it could trigger another economic crisis on par with what we saw in 2008 at the end of the Bush administration.
Republicans want about $2 trillion in budget cuts, while Obama is looking for somewhere in the vicinity of $400 billion in tax loopholes wiped off the slate. For the first time, the White House reportedly has signaled that it would consider cuts to Medicare and Medicaid, if Republicans will bend on their refusal to allow the elimination of the corporate tax loopholes.
Obama has proposed eliminating tax breaks for the hugely profitable oil and gas industry, hedge fund managers and owners of corporate jets.
The debt fund debate comes as The New York Times reports that median pay for top executives at 200 large companies last year was $10.8 million. Those salaries work out to a 23% gain for the CEOs over 2009 levels, as compared to only a .5% hike in pay for rank and file workers. Given inflation, workers on the bottom rung actually lost money.
Philippe P. Dauman, the chief executive of Viacom, stands atop the list with an $84.5 million salary last year, after inking new long-term deal that includes one-time stock awards, the Times reported.
Rebels Scoff at Russian Proposal to Let Gadhafi Go Free
Talk of striking a deal that would allow Moammar Gadhafi to step down without fear of reprisal is back.
This time word comes from Russia, where President Dmitri Medvedev is working as a mediator in talks to try to come to a political solution to the crisis rather than Gadhafi's exit coming at the wrong end of a NATO missile.
Russian newspaper Kommersant is reporting that even France is ready to propose a peaceful exit for Gadhafi.
"The colonel is sending signals that he’s ready to leave power in exchange for a security guarantee," a high-placed source in the Russian government told Kommersant. "And such guarantees are ready to be offered to him."
So far there is no word whether this latest round of talks will bear fruit. Libyan rebel leader Mustafa Abdul-Jalil signaled he is not on board with the Russian concept for a negotiated solution to the revolution.
"There is absolutely no current or future possibility for Gadhafi to remain in Libya," Abdul-Jalil said in an email sent to the Associated Press."There is no escape clause for Gadhafi - he must be removed from power and face justice."
This time word comes from Russia, where President Dmitri Medvedev is working as a mediator in talks to try to come to a political solution to the crisis rather than Gadhafi's exit coming at the wrong end of a NATO missile.
Russian newspaper Kommersant is reporting that even France is ready to propose a peaceful exit for Gadhafi.
"The colonel is sending signals that he’s ready to leave power in exchange for a security guarantee," a high-placed source in the Russian government told Kommersant. "And such guarantees are ready to be offered to him."
So far there is no word whether this latest round of talks will bear fruit. Libyan rebel leader Mustafa Abdul-Jalil signaled he is not on board with the Russian concept for a negotiated solution to the revolution.
"There is absolutely no current or future possibility for Gadhafi to remain in Libya," Abdul-Jalil said in an email sent to the Associated Press."There is no escape clause for Gadhafi - he must be removed from power and face justice."
Saturday, July 2, 2011
Le Tour de France Preview: The Short of It Is...
The only way that Alberto Contador can be beat is if all the climbers attack from the earliest mountain stages.
If the climbers do not strike Contador from the start he will only get stronger as the race goes on and pick the spots when to launch his unforgiving attacks.
The monster climbs this year erupt on Stages 12 and 14 in the Pyrenees, with mountaintop finishes on Luz-Ardiden and the Plateau de Beille, respectively. Le Tourmalet in thrown in for good measure on the way to Luz-Ardiden.
The final week includes the heroic and crucial assents up Col du Télégraphe et Cul du Galibier en route the climb to L’Alpe d’Huez. It is an epic stage and it is made for Contador to shine.
The best time trialists among the GC challengers will have to be well-positioned coming out of the Alps if they are to have a chance in the 41km-long individual time trial in Grenoble the next day.
If the GC riders do not keep it close in the mountains, Contador, who has become one of the best in the race against the clock, will easily protect his lead in the ITT on the penultimate day.
When Contador controls the race he cannot be beat. The only way to defeat him is to throw him off his offense. And to do that it will take all the contenders for the general classification to take turns attacking him. Isolating Contador from his Team Saxo Bank domestiques alone will not do it.
So the likes of Levi Liepheimer, Andy Schleck, Chris Horner, Christian Vande Velde, Cadel Evans, David Millar and Tom Danielson all must strike, and strike repeatedly, or else they will face the same fate of the field in the Giro d'Italia two months ago, when Contador snatched the Maglia Rosa in the 9th stage and it never came off his back after that.
If the climbers do not strike Contador from the start he will only get stronger as the race goes on and pick the spots when to launch his unforgiving attacks.
The monster climbs this year erupt on Stages 12 and 14 in the Pyrenees, with mountaintop finishes on Luz-Ardiden and the Plateau de Beille, respectively. Le Tourmalet in thrown in for good measure on the way to Luz-Ardiden.
The final week includes the heroic and crucial assents up Col du Télégraphe et Cul du Galibier en route the climb to L’Alpe d’Huez. It is an epic stage and it is made for Contador to shine.
The best time trialists among the GC challengers will have to be well-positioned coming out of the Alps if they are to have a chance in the 41km-long individual time trial in Grenoble the next day.
If the GC riders do not keep it close in the mountains, Contador, who has become one of the best in the race against the clock, will easily protect his lead in the ITT on the penultimate day.
When Contador controls the race he cannot be beat. The only way to defeat him is to throw him off his offense. And to do that it will take all the contenders for the general classification to take turns attacking him. Isolating Contador from his Team Saxo Bank domestiques alone will not do it.
So the likes of Levi Liepheimer, Andy Schleck, Chris Horner, Christian Vande Velde, Cadel Evans, David Millar and Tom Danielson all must strike, and strike repeatedly, or else they will face the same fate of the field in the Giro d'Italia two months ago, when Contador snatched the Maglia Rosa in the 9th stage and it never came off his back after that.
Thursday, June 30, 2011
France Armed Western Army in Libya
The mystery of the rebel army that emerged in western Libya and successfully has made a push to within about 50 miles southwest of Tripoli appears to have been solved: France secretly armed the rebel force with airdrops in the Nafusa Mountains.
"Large amounts" of automatic weapons, rocket-propelled grenades and anti-tank missiles, along with food, medicine and other humanitarian supplies, were parachuted to the force earlier this month, according to multiple reports that cited the French newspaper Le Figaro.
"There were humanitarian drops because the humanitarian situation was worsening and at one point it seemed the security situation was threatening civilians who could not defend themselves," French armed forces spokesman Thierry Burkhard told Reuters.
"France therefore also sent equipment allowing them to defend themselves, comprising light weapons and munitions," he said, adding that the drop in early June had included medicine and food.
The newly formed rebel army out of western Libya is the only opposition force that is currently on the march. The main rebel army in eastern Libya remains hung up near Ajdabiya, while the rebel brigades that pushed Gadhafi loyalists out of Misurata have not had much success moving east toward Triploli.
Rebel Transitional National Council Chairman Mahmoud Jibril said at a news conference in Vienna today that arming the opposition force would help avoid casualties against the better-equipped forces still loyal to Moammar Gadhafi.
"Giving them weapons we will be able decide the battle more quickly, so that we can shed as little blood as possible. Because the less blood we shed the faster we can think of the future and the more we can protect the Libyan people," Jibril said.
But a rebel military commander claimed to not know anything of the French arms being airdropped.
"Whoever gave us these arms should come here and tell us where he put them," Col. Mokhtar Milad Fernana, commander of the rebel fighting forces, told The Los Angeles Times.
NATO Secretary General Anders Fogh Rasmussen indicated today in Vienna that France was acting alone and not as part of the air campaign. The alliance will determine whether France violated any NATO or United Nations rules by arming the rebels.
The French are not apologizing.
"Large amounts" of automatic weapons, rocket-propelled grenades and anti-tank missiles, along with food, medicine and other humanitarian supplies, were parachuted to the force earlier this month, according to multiple reports that cited the French newspaper Le Figaro.
"There were humanitarian drops because the humanitarian situation was worsening and at one point it seemed the security situation was threatening civilians who could not defend themselves," French armed forces spokesman Thierry Burkhard told Reuters.
"France therefore also sent equipment allowing them to defend themselves, comprising light weapons and munitions," he said, adding that the drop in early June had included medicine and food.
The newly formed rebel army out of western Libya is the only opposition force that is currently on the march. The main rebel army in eastern Libya remains hung up near Ajdabiya, while the rebel brigades that pushed Gadhafi loyalists out of Misurata have not had much success moving east toward Triploli.
Rebel Transitional National Council Chairman Mahmoud Jibril said at a news conference in Vienna today that arming the opposition force would help avoid casualties against the better-equipped forces still loyal to Moammar Gadhafi.
"Giving them weapons we will be able decide the battle more quickly, so that we can shed as little blood as possible. Because the less blood we shed the faster we can think of the future and the more we can protect the Libyan people," Jibril said.
But a rebel military commander claimed to not know anything of the French arms being airdropped.
"Whoever gave us these arms should come here and tell us where he put them," Col. Mokhtar Milad Fernana, commander of the rebel fighting forces, told The Los Angeles Times.
NATO Secretary General Anders Fogh Rasmussen indicated today in Vienna that France was acting alone and not as part of the air campaign. The alliance will determine whether France violated any NATO or United Nations rules by arming the rebels.
The French are not apologizing.
S&P, Moody's Will Lower U.S. Credit Rating Over Debt Limit
Standard & Poors would downgrade the AAA U.S. credit rating to a failing grade if Congress and the White House do not break an impasse and reach a deal on raising the federal debt ceiling in the next month.
"If the U.S. government misses a payment, it goes to D," John Chambers, chairman of S & P’s sovereign rating committee, told Reuters. "That would happen right after August 4, when the bills mature, because they don't have a grace period."
Rival credit-rating service Moody's said it will also lower its credit rating if the U.S. fails to raise its debt limit.
“We believe the debt ceiling will be raised and the government won’t default,” Chambers told Bloomberg. “Otherwise we wouldn’t have a AAA rating on the U.S. government. It’s evolving as we expected."
The warning from the Wall Street credit watchdogs came as President Obama said he wants a balanced set of budget cuts and corporate tax loopholes eliminated as part of the package aimed at beginning to reduce the $14.3 billion federal debt.
GOP House Speaker John Boehner quickly indicated he intends to protect the corporate tax breaks, even though the White House only intends to target hugely profitable industries that it says can afford to end the tax boondoggle.
Globally, the austerity movement moves to Britain, which faces a strike today over cuts to public pension plans. Workers of the world unite! "Remember when teachers, nurses, doctors & lollipop ladies crashed the stock market, wiped out banks, took billions in bonuses and paid no tax? Me neither. Support the strikes against the government," Tweeted British shop owner Bristol Green.
Greece, meanwhile, is quiet today after two days of violent clashes between protesters and police in Athens. Tear-gas clouds appear to have given way to clear skies after the Greek parliament approved a five-year package that will prevent Greece from defaulting on a loan payment next week to the International Monetary Fund and EU.
Greek authorities are cautious, however, since a plan on how to implement the $40 billion austerity program is expected to be approved in parliament today.
"If the U.S. government misses a payment, it goes to D," John Chambers, chairman of S & P’s sovereign rating committee, told Reuters. "That would happen right after August 4, when the bills mature, because they don't have a grace period."
Rival credit-rating service Moody's said it will also lower its credit rating if the U.S. fails to raise its debt limit.
“We believe the debt ceiling will be raised and the government won’t default,” Chambers told Bloomberg. “Otherwise we wouldn’t have a AAA rating on the U.S. government. It’s evolving as we expected."
The warning from the Wall Street credit watchdogs came as President Obama said he wants a balanced set of budget cuts and corporate tax loopholes eliminated as part of the package aimed at beginning to reduce the $14.3 billion federal debt.
GOP House Speaker John Boehner quickly indicated he intends to protect the corporate tax breaks, even though the White House only intends to target hugely profitable industries that it says can afford to end the tax boondoggle.
Globally, the austerity movement moves to Britain, which faces a strike today over cuts to public pension plans. Workers of the world unite! "Remember when teachers, nurses, doctors & lollipop ladies crashed the stock market, wiped out banks, took billions in bonuses and paid no tax? Me neither. Support the strikes against the government," Tweeted British shop owner Bristol Green.
Greece, meanwhile, is quiet today after two days of violent clashes between protesters and police in Athens. Tear-gas clouds appear to have given way to clear skies after the Greek parliament approved a five-year package that will prevent Greece from defaulting on a loan payment next week to the International Monetary Fund and EU.
Greek authorities are cautious, however, since a plan on how to implement the $40 billion austerity program is expected to be approved in parliament today.
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