BlackRock Inc.’s Laurence D. Fink and Pacific Investment Management Co.’s Bill Gross said yesterday the budget standoff will be resolved without a debt default. The two fund company executives, whose firms oversee more than $5.8 trillion in combined assets, spoke at an event hosted by the UCLA Anderson School of Management, of which they’re both alumni, at the Beverly Hilton hotel in California, and streamed on CNBC.com.
The effects of the shutdown continued to ripple through the government and the country yesterday.
The Bureau of Labor Statistics said it wouldn’t release today’s report on unemployment, repeating what it did in the 1996 shutdown. U.S. efforts to enforce sanctions on Iran are being hurt because of Treasury Department furloughs, Under Secretary of State for Political Affairs Wendy Sherman said.
Other government services continued uninterrupted, including Social Security benefits, mail delivery and and air traffic control.
The Treasury Department yesterday released a report about the consequences of reaching the debt ceiling, saying it could have catastrophic results that last decades such as higher interest rates and slower economic growth.
The U.S. will run out of borrowing authority Oct. 17 and will have $30 billion in cash after that. The country would be unable to pay all of its bills, including benefits, salaries and interest, sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
Savings from the partial shutdown would only delay that date by no more than “a couple of days,” according to the Bipartisan Policy Center in Washington.
House Republicans continued their strategy of passing piecemeal bills to fund parts of the government. The House has now passed five measures with bipartisan votes.
Republicans released text for 10 more proposals, including bills that would fund infant nutrition, the Food and Drug Administration, intelligence agencies, weather monitoring and Head Start preschool programs. They said they may also consider a bill to give retroactive pay to furloughed federal employees.
A bipartisan group of House members suggested repealing a medical-device tax, offsetting lost revenue with a pension funding provision and reviving last year’s funding levels until March 2014.
Senate Democrats and Obama continued to reject those ideas, saying they pit agencies and interests against each other. Giving in now would only embolden Republicans to seek more concessions, said Senator Charles Schumer, a New York Democrat.
“The hope is maybe once the Tea Party has realized it’s not getting its way on shutting down the government, that they won’t try the same stunt on debt ceiling,” Schumer said. “If they do, by the way, the heat on them will be much, much greater than it is now. They know that.”
Instead, Obama said, the “only way out” is for Boehner to let the bipartisan House majority vote on a bill to reopen the government that wouldn’t affect the Affordable Care Act.