Fitch puts US debt rating on watch for downgrade

WASHINGTON—Rating agency Fitch on Tuesday put the United States on warning for a downgrade after Congress failed to reach a deal on raising the country’s debt ceiling.

Fitch placed the United States’s top-grade AAA rating on a “negative watch,” citing the possibility the Treasury could default on its obligations after October 17 if the ceiling is not raised.

“The US authorities have not raised the federal debt ceiling in a timely manner,” Fitch said.

“Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a US default.”

The Fitch move came after a day of politicking in Congress revealed Republicans and Democrats remained far apart over a deal to fund the government and increase the $16.7 trillion debt ceiling.

US Treasury Secretary Jacob Lew has repeatedly warned that as of October 17 the government will not have any more room to borrow under the ceiling to cover the federal deficit, and that the Treasury’s cash level will be a small $30 billion.

After that, the risk steadily rises that the Treasury will default on its obligations, including possibly its debt.

“The Treasury may be unable to prioritize debt service, and it is unclear whether it even has the legal authority to do so,” noted Fitch.

Even if it can, the US government would risk missing payments to suppliers and employees, as well as social security payments to citizens, “all of which would damage the perception of US sovereign creditworthiness and the economy,” the agency said.

In addition, it said, “the prolonged negotiations over raising the debt ceiling… risks undermining confidence in the role of the US dollar as the preeminent global reserve currency.”

Fitch said that if the US was forced into default, it would reduce the US sovereign credit grade to “restricted default” based on the belief that Washington would quickly move to make good on the debt.

But it would cut the rating on the specific debt affected by missed payments to B+ from AAA, the highest rating it could give defaulted securities, in expectation that the default would be “cured.”

Still, Fitch said that if and when the political gridlock is overcome and the ceiling is raised, allowing the Treasury to balance its finances, it would review the rating based on how the problem was solved “and the perceived risk of a similar episode occurring in the future.”

The proposals in Congress Tuesday left open the prospect for a new crisis in January and February.

A Treasury spokesperson said in reaction: “The announcement reflects the urgency with which Congress should act to remove the threat of default hanging over the economy.”

source: business.inquirer.net

Obama addresses military as gov’t shuts down

WASHINGTON — President Barack Obama is telling members of the military he’ll work to get Congress to re-open the government as soon as possible.

Obama is addressing troops in a video message after Congress missed a midnight deadline to avert a partial government shutdown.

Obama says troops in uniform will remain on duty as usual. He says he’s signed a law ensuring troops get paid on time. He says ongoing operations in Afghanistan and elsewhere will continue and the U.S. will ensure those in harm’s way have what they need.

But Obama says Defense Department civilians may be furloughed. He says that compounds the damage from spending cuts that have already affected the military.

Hundreds of thousands of government workers will be off the job Monday, but some essential services will continue.

source: newsinfo.inquirer.net

Senator delivers talkathon against Obamacare

WASHINGTON — A conservative senator delivered an old-style speaking marathon over President Barack Obama’s health care law on Tuesday, even though fellow Republicans urged him to back down for fear of a possible government shutdown in a week.

Texas Sen. Ted Cruz vowed to speak until he’s “no longer able to stand,” and filled the time in a largely empty chamber, criticizing the law and comparing the fight to the battle against the Nazis. He talked about the Revolutionary War, the Washington ruling class, his Cuban-born father who worked as a cook and even recited Dr. Seuss’ “Green Eggs and Ham.”

“I rise today in opposition to Obamacare,” Cruz said at 2:41 p.m. EDT (2:41 a.m. Wednesday in Manila), and he cast the 3-year-old law as a job killer and a “liberal train wreck.” Nine hours later he was showing no signs of letting up.

Egged on by conservative groups, the potential 2016 presidential candidate and favorite of the ultraconservative tea party movement excoriated Republicans and Democrats in his criticism of Obama’s signature domestic achievement and Congress’ unwillingness to gut the law. Cruz supports the House-passed bill that would avert a government shutdown and defund Obamacare, as do many Republicans. The bill would keep the government operating until Dec. 15.

However, they lack the votes to stop Senate Majority Leader Harry Reid from moving ahead on the measure, stripping the health care defunding provision and sending the spending bill back to the House. That didn’t stop Cruz’ quixotic filibuster. During his talkathon, eight Republican senators joined Cruz on the Senate floor, including Sen. Rand Paul of Kentucky and Sen. Marco Rubio of Florida, both of whom have been mentioned as possible presidential candidates. Cruz yielded to them for questions but did not give up his time controlling the debate.

“It is my hope, my fervent hope, that the voices of dissension within the Republican conference will stop firing at each other and start firing” at the target of the health care law, Cruz said, a clear acknowledgment of the opposition he faced.

The issue has roiled the Republican Party, exacerbating the divide between tea party conservatives and Republican incumbents who repeatedly have voted against the health care law but now find themselves on the defensive. Republican senators said defunding Obamacare simply won’t happen with a Democratic president and Democrats controlling the Senate.

Democrats calculate that the public will blame Republicans for any interruption in government services or benefits, as it did in 1995-96 in the last shutdown confrontation that resembles the current one.

Both parties are using the health care reform issue to try to gain an edge in the 2014 elections when control of both houses of Congress will be at stake.

Senate Minority Leader Mitch McConnell and the No. 2 Senate Republican, John Cornyn of Texas, opposed Cruz’ tactic, and numerous Republicans stood with their leadership rather than Cruz.

Delaying tactics could push a final vote into the weekend, just days before the new fiscal year begins on Oct. 1. That would give Speaker John Boehner and House Republicans little time to come up with a new temporary spending bill needed to avert a partial government shutdown.

McConnell told reporters that if the House doesn’t get a Senate-passed bill until Monday, lawmakers there would be in a tough spot.

Sen. Dick Durbin, the Senate’s No. 2 Democrat, said Democrats favor a spending bill that would keep the government running until Nov. 15, which would force Congress to work sooner on a more sweeping piece of legislation — known as an omnibus spending bill — that he hopes would reverse some automatic spending cuts known as sequestration.

Despite Cruz’ effort, Reid set a test vote for Wednesday on a motion to move the measure ahead.

Outside conservative groups that have been targeting Republican incumbents implored their members to call lawmakers and demand that they stand with Cruz and his attack on Obamacare.

“This is the ultimate betrayal,” the Senate Conservatives Fund said of McConnell and Cornyn — two lawmakers up for re-election next year — in an email Tuesday morning.

source: newsinfo.inquirer.net

Protests lead to weakening support for Protect IP, SOPA

An unprecedented online protest against a Hollywood-backed copyright bill may be working: some of its previous supporters in the U.S. Congress are backing down.

The protest, which included a Wikipedia blackout and home page alerts at Google.com and Amazon.com, has prompted some senators contacted by CNET today to abandon their earlier enthusiasm for Protect IP and the Stop Online Piracy Act, or SOPA. A Senate floor vote on Protect IP is scheduled for January 24.

"I'm withdrawing my co-sponsorship for the Protect IP Act," said Sen. Roy Blunt, a Missouri Republican.

Sen. John Boozman, an Arkansas Republican, "will be withdrawing his name as a co-sponsor" of Protect IP, a spokesman told CNET today. Fellow Protect IP co-sponsor Sen. James Risch, an Idaho Republican, said today that he wants "more time to re-examine the legislation before going to a vote" and has asked staff for a detailed briefing, a spokesman said.

And Sen. Orrin Hatch, the Utah Republican who has long been a close ally of Hollywood on copyright and is up for re-election this year, said on Twitter that "I will not only vote against moving the bill forward next week but also remove my co-sponsorship of the bill." Hatch's volte face is notable because of his enthusiasm for similar measures in the past: once proposed that copyright holders should be allowed to remotely destroy the computers of music pirates and tried to outlaw peer-to-peer networks through his Induce Act.

In the House of Representatives, where the similar Stop Online Piracy Act, or SOPA, will be voted on in a committee next month, support also appears to be weakening.




Rep. John Carter, a Texas Republican who is listed as a SOPA sponsor, "reserves judgment on the final bill," a spokesman told CNET today. "He's certainly not saying pass the bill as-is -- there are legitimate concerns in this bill." SOPA sponsor Tim Griffin, an Arkansas Republican, now says: "I will not support a bill unless my constituents are comfortable with it."

Wikipedia's English-language pages went completely black last night with a splash page saying "the U.S. Congress is considering legislation that could fatally damage the free and open Internet" and suggesting that readers contact members of Congress. The blackout is intended to coincide with next week's Senate floor vote on Protect IP and a committee vote scheduled on the House version, called the Stop Online Piracy Act, or SOPA. (See CNET's FAQ on the topic.)

The home pages of Craigslist and Google feature exhortations to contact members of Congress and urge them to vote against the Stop Online Piracy Act and the Senate version called Protect IP. Amazon.com and Yahoo's Flickr have also joined in. (Craiglist's snarky note: "Corporate paymasters, KEEP THOSE CLAMMY HANDS OFF THE INTERNET!")

New York senators Chuck Schumer and Kirsten Gillibrand, both Democrats who are Protect IP sponsors, sent CNET a joint statement saying: "While the threat to tens of thousands of New York jobs due to online piracy is real and must be addressed, it must be done in a way that allows the Internet and our tech companies to continue to flourish." They said they believe "both sides can come together on a solution that satisfies their respective concerns."

A spokeswoman for Protect IP sponsor Sen. Ben Cardin, a Maryland Democrat, said the volume of phone calls today has been "significant." Cardin, who previously said he couldn't vote for the measure in its most recent form, is remaining a co-sponsor "so that he can actively participate in fixing flaws in the current bill," she said.

Even some members of Congress who are remaining as sponsors are now doing so with markedly less enthusiasm.

"I'm hearing from South Dakotans on both sides of the issue," said Sen. Tim Johnson, a Democrat. "I've cosponsored the bill and plan to support cloture so we can continue the debate in a reasonable fashion. I will also be reaching out to Chairman Leahy and asking him to refine the bill and work with stakeholders to ensure their concerns are heard as we move forward."

Sen. Jeff Bingaman, a New Mexico Democrat, will remain a cosponsor. He'll vote to override a promised filibuster from Sen. Ron Wyden, an Oregon Democrat, so "the bill can be debated and improved."

Rep. Debbie Wasserman Schultz, a Florida Democrat, said through her press secretary that she's "open to the final version changing and thinks everyone should come to the table and find a compromise." But she remains committed to being a SOPA co-sponsor.

A spokesman for SOPA sponsor Rep. Lee Terry, a Nebraska Republican, told the Omaha World-Herald that SOPA isn't the solution. And Rep. Ben Quayle, an Arizona Republican yesterday had his name removed from the official SOPA sponsor list.

Among the other Web sites that, in one way or another, have joined the blackout: Metafilter, the Consumer Electronics Association, BoingBoing, OpenDNS, WordPress, the Electronic Frontier Foundation, and the Internet's most popular dinosaur comic strip. Some physical protests are also planned.







SOPA, of course, represents the latest effort from the Motion Picture Association of America, the Recording Industry Association of America, and their allies to counter what they view as rampant piracy on the Internet, especially offshore Web sites. It would allow the Justice Department to obtain an order to be served on search engines, Internet service providers, and other companies, forcing them to make a suspected piratical Web site effectively vanish. It's opposed (PDF) by many Internet companies, users, and civil liberties groups.

Sen. Blunt, who withdrew his support today, also said: "Upon passage of this bill through committee, Senate Judiciary Republicans strongly stated that there were substantive issues in this legislation that had to be addressed before it moved forward. I agree with that sentiment. But unfortunately, Senate Leader Harry Reid is pushing forward with legislation that is deeply flawed and still needs much work."

Sen. Boozman added in a Facebook post that: "We should not rush to pass this bill, rather we should be working to find another solution so that the epidemic of online piracy is addressed in a manner that ensures innovation and free speech is protected."

In one early sign that the blackouts and protests would have an effect, the MPAA yesterday characterized them as "stunts." The group's chairman, Chris Dodd, took a thinly veiled swipe at Wikipedia by denouncing the protests as "an irresponsible response and a disservice to people who rely on [the sites] for information and [who] use their services." News Corp. chairman Rupert Murdoch took to Twitter to offer similar thoughts.


source: http://news.cnet.com/8301-31921_3-57361237-281/protests-lead-to-weakening-support-for-protect-ip-sopa/?tag=mncol;4n