Americans say Obama government can't fix US economy: Poll

WASHINGTON: Barely one in four Americans feels confident that the Obama government can fix America's economic problems with a large majority agreeing that the policymaking process in Washington is unstable and ineffective, according to a new poll.

As many as 46 percent of registered voters say they plan to vote against President Barack Obama next year, versus 21 percent who say they will definitely vote for the president and 33 percent who say they will consider giving him another term, a Washington Post poll released on Wednesday said.

The poll underscores the damage caused to Obama and both Republicans and Democrats by the long standoff over the debt ceiling and the weakened economy, the influential US daily said.

The results could have significant implications for both parties, although the anger appears directed evenly between the two parties, as record numbers of Americans now say they are interested in new congressional representation when they vote in November 2012, it said.

Only 26 percent of respondents in the poll said they were confident that leaders in Washington could actually solve the economic problems facing the country.

Fifty-two percent of respondents to the Post poll said they believe Standard & Poor's decision to downgrade its rating on the US debt was a fair assessment, with 71 percent saying they thought S&P's assessment of the American political system as "less stable, less effective and less predictable" was fair.

Among those who believe that Washington is focused on the wrong issues, 30 percent blame Obama and Democrats, 30 percent blame Republicans and 32 percent blame both sides equally.

Confidence in Obama to make the right decisions for the country's economic future is down 10 points to 33 percent since January. Confidence in Congressional Republicans, which was at 35 percent in January, has dropped to 18 percent.

Obama's overall job ratings sit at 44 percent approval and 46 percent disapproval in the new poll, both numerically down from three weeks ago, when he was at 47 and 48 percent, respectively.

However, the poll found despite growing disillusionment with the political situation, 77 percent of Americans agree with this statement: "Whatever its faults, the United States still has the best system of government in the world." That number is unmoved from October 2010.

Continue Reading →

New York to Open Gay-Marriage Era as Lottery Winners Celebrate

July 22, 2011, 4:54 PM EDT
More From Businessweek

    New York Bomb-Plotter’s Father Guilty of Obstructing Justice
    MTR Hires New York Transport Boss Walder as Chief Executive
    Florida Space Workers Face Few Prospects After Shuttle’s End
    Hamptons Home Prices Climb as Luxury Properties Lure Buyers
    Space Shuttle Atlantis Lands Safely, Ending 30-Year Program

Story Tools

    add to Business Exchange
    E-mail
    Print

By Esmé E. Deprez

July 22 (Bloomberg) -- Two grooms and two brides now adorn mugs, rubber duckies and snow globes in the souvenir shop of the City Clerk’s office in Manhattan as New York state prepares to allow same-sex couples to marry.

The city received 823 lottery entries from couples for 764 spots available for marriage at clerks’ offices July 24, said Marc LaVorgna, a spokesman for Mayor Michael Bloomberg. To accommodate all of the couples who applied, the city increased the number of slots in Manhattan to 459 from 400, he said.

Jo-Ann Shain and Mary Jo Kennedy of Brooklyn, who have been together 29 years, entered the 48-hour lottery after it was announced on July 19.

“At first we thought maybe it will be crazy, that it’ll be a zoo,” Shain, a 58-year old freelance medical editor, said in a telephone interview. “Then it occurred to us that we’ve waited so long, have fought so hard, it would be crazy not to be there on such a historic day.”

Shain said the couple plans to be married by a friend, who is a judge, outside the Manhattan clerk’s office as their 22- year old daughter, Aliya, looks on.

With 19.4 million residents, New York is the sixth and most populous U.S. state to grant same-sex couples the right to wed, a move championed by Governor Andrew Cuomo and approved by the Legislature in Albany on June 24, the last day of its session. The victory for gay-rights advocates, which made headlines around the world, more than doubled the number of Americans free to marry either gender to 35 million.

Record Day

The couples to be wed July 24 will mark the city’s most in one day, Bloomberg said this week. The previous record was set on Valentine’s Day in 2003, when 621 couples tied the knot.

As of yesterday, 3,145 couples had preregistered for marriage licenses, said Mark Botnick, a spokesman for the mayor. Of that, about 2,200 are estimated to be same-sex couples, he said.

Clerks’ offices in all five boroughs, which are normally closed on Sunday, will open from 8:30 a.m. to 4:30 p.m. at an additional estimated cost of $70,000, Botnick said. About 60 judges have volunteered to perform ceremonies, he said. The offices will remain open for two extra hours next week to handle the expected flood.

Three-Step Process

The Albany clerk’s office will provide licenses beginning at 12:01 a.m. on Sunday to 10 couples, according to the Empire State Pride Agenda. Clerks in Binghamton, Brighton, Brookhaven, Buffalo, Greenburgh, Ithaca, Niagara, North Hempstead, Oneonta, Rochester, Syracuse and Woodstock will also hold Sunday office hours, the Manhattan-based gay advocacy organization said.

All couples -- gay or straight -- face a three-step process to get married. They must obtain from a clerk a $35 marriage license, for which they can apply online or on site. Judges will be on hand to grant judicial waivers eliminating the state’s 24- hour waiting period. Couples may then have a clerk perform a civil marriage for $25 or hold a religious ceremony at another location.

Same-sex marriages in New York will be recognized in Connecticut, Iowa, Massachusetts, New Hampshire, Vermont and Washington, D.C., where the practice is legal, as well as in Maryland and Rhode Island, according to the mayor’s office.

Debate began at a U.S. Senate Judiciary Committee meeting on July 20 on the proposed Respect for Marriage Act, which would let the federal government extend benefits such as Social Security and health-insurance coverage to same-sex married couples. It would end the 1996 Defense of Marriage Act, which bans recognition of those unions. The proposal wouldn’t require states to legalize same-sex marriages.

Rabbi to Preside

Rabbi Sharon Kleinbaum of the Congregation Beth Simchat Torah in Manhattan’s Greenwich Village will marry people outside the Manhattan clerk’s office starting at 8:30 a.m. July 24. About 80 couples have signed up, with the final count depending on how many win the lottery, said Gabriel Blau, a congregation spokesman.

When Kleinbaum went to lobby for the marriage law’s passage in Albany, people pushed her and spat at her and said, “You are not a Jew,” Blau said.

Bloomberg plans to perform a marriage for John Feinblatt, his chief policy adviser, and Jonathan Mintz, the city’s commissioner for consumer affairs, at Gracie Mansion on July 24. The couple is the sole exception to the lottery.

The mayor is the founder and majority owner of Bloomberg News parent company Bloomberg LP.

--With assistance from Sarah Frier in New York and Victoria Pelham in Washington. Editors: Mark Schoifet, Stephen Merelman

To contact the reporter on this story: Esmé E. Deprez in New York at edeprez@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


http://www.businessweek.com/news/2011-07-22/new-york-to-open-gay-marriage-era-as-lottery-winners-celebrate.html

Continue Reading →

Britain’s Second-Quarter Economic Growth Probably Eased to 0.2%

July 23, 2011, 6:32 AM EDT
More From Businessweek

    German July Ifo Business Confidence Falls More Than Forecast
    U.K. Retail Sales Rise as Stores Cut Prices to Lure Shoppers
    U.K. Consumer Confidence Falls as Outlook for Economy Darkens
    Gilts Drop After Bank of England Minutes as Haven Appeal Wanes
    Billionaire Lebedev Interested in Remaking News of the World

Story Tools

    add to Business Exchange
    E-mail
    Print

By Fergal O’Brien and Mark Evans

July 23 (Bloomberg) -- Britain’s second-quarter economic growth probably slowed as weak consumer spending continued to restrain the recovery, economists said.

Gross domestic product rose 0.2 percent compared with a 0.5 percent increase in the first quarter, according to the median of 32 forecasts in a Bloomberg News survey. The Office for National Statistics will publish the data at 9:30 a.m. on July 26 in London.

Output was hit in the second quarter by supply disruptions stemming from the earthquake in Japan, while plants shut down and workers booked vacations to take advantage of consecutive four-day weekends in April to mark Easter and the royal wedding. Bank of England policy makers left their benchmark interest rate at a record low this month and warned that the current economic weakness may persist “for longer than previously thought.”

“The economy is likely to have eked out marginal growth at best in the second quarter, and there is a very real danger that it could have contracted modestly,” said Howard Archer, an economist at IHS Global Insight in London, who forecasts 0.1 percent growth. “Activity clearly took a significant hit in April from the extra public holiday, but the softness of the economy runs deeper than this.”

Manufacturing growth slowed in June, while expansion among services companies remained “below trend,” Markit Economics Ltd. said in reports this month. Consumer confidence fell as Britons grew more pessimistic about the outlook for the economy, Nationwide Building Society said on July 21.

Demand is being hit by government spending cuts while high inflation is eroding household incomes at the fastest pace since the 1970s. The economy has effectively stagnated since September, with the first quarter’s growth leaving the level of GDP no higher than it was in the third quarter of last year.

Four of the economists surveyed forecast a contraction in the second quarter, with Hetal Mehta at Daiwa Capital Markets Europe Ltd. projecting a 0.3 percent drop in GDP. At the other end of the range is Azad Zangana at Schroders Plc, with a forecast for growth of 0.4 percent.

--Editors: Andrew Atkinson, Eddie Buckle

To contact the reporters on this story: Fergal O’Brien in London at fobrien@bloomberg.net; Mark Evans in London at mevans8@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

Continue Reading →

Man Charged in Deadliest Norway Attacks Since World War II

July 23, 2011, 6:10 AM EDT
More From Businessweek

    Oslo Bombing Kills Seven, Gunman Leaves More Dead in Dual Attack
    Norway Police Confirms Seven Dead From Explosion in Oslo
    Democrats Balk at Possible Debt-Limit Deal as Deadline Looms
    Merkel, Sarkozy to Outline Joint Greek Position at Summit
    Obama Open to Short-Term Debt Increase Tied to Major Deal

Story Tools

    add to Business Exchange
    E-mail
    Print

By Josiane Kremer and Stephen Treloar

(Adds Clinton comment in 13th paragraph.)

July 23 (Bloomberg) -- Twin attacks in Norway, the deadliest since World War II, left 91 people dead after a gunman killed 84 people at a youth camp on an island near Oslo and a bomb explosion in the center of the capital killed seven people.

A 32-year-old Norwegian man was arrested on the island of Utoeya, about 40 kilometers (25 miles) from Oslo, and authorities have begun interrogating the suspect, police said at a press briefing today. The same person is likely behind the bombing and the shootings on the island, they said. The suspect’s name is Anders Behring Breivik, local media reported. Police declined to confirm the suspect’s name.

The man has been charged on two counts of “dangerous crime to society,” which means he could be sentenced to 21 years in prison, Norway’s toughest punishment, Roger Andresen, deputy Oslo police chief, told reporters today. The man is a Christian fundamentalist with right-wing tendencies, Andresen said.

The blast in central Oslo shattered windows at the office of Prime Minister Jens Stoltenberg. Hundreds of youths were attending the camp organized by the youth wing of Stoltenberg’s Labor Party.

“Not since World War II has our country experienced a greater tragedy,” Stoltenberg said in a speech today. “For me, Utoeya was the paradise island of my youth that was transformed into hell.”

“The search may take a while as the island has a number of buildings and forested areas,” Anders Frydenberg, a spokesman for Oslo police, said by telephone today. He declined to say whether police believe the shooting was carried out by a single gunman or multiple people and declined to comment on the motives for the attack.

Man in Custody

“The police are not going to confirm his name,” Frydenberg said. “We have a man in custody and are asking him questions about shooting episodes at the island. We are still talking to him.”

Police “see a connection between the attack in Oslo center and the attack on the island because both attacks are at political sites in Norway,” he said. “The bomb blast in Oslo center was toward government buildings, which are being ruled by the Labor party. The youth camp was a Labor party youth camp. That’s the connection between the two attacks.”

Stoltenberg, called the attack on his office “cowardly” and said it wouldn’t interrupt government functioning. Stoltenberg was due to appear today at the youth gathering on Utoeya, Sponheim said. The suspected shooter, who wore a police uniform, wasn’t a police officer, he said.

‘A Lot Unclear’

Swedish Prime Minister Fredrik Reinfeldt said he contacted Stoltenberg to convey his condolences. “From a Swedish perspective, we’re following the ongoing development,” he said. “There is still a lot that is unclear about what has happened.”

Neighboring Sweden had a brush with what police treated as a possible terrorist attack in December when a suicide bomber injured two people in central Stockholm.

Danish Prime Minister Lars Loekke Rasmussen sent a statement conveying his “deepest sympathy and solidarity” with the Norwegian people. U.K. Foreign Secretary William Hague described the bombing in a press release as “horrific.” China, Australia and New Zealand condemned the attack and expressed their condolences.

‘Peaceful People’

U.S. Secretary of State Hillary Clinton broke away from her prepared remarks at an entrepreneurship event in Bali, Indonesia, to express sympathy.

“This tragedy strikes right at the heart and soul of a peaceful people,” the top U.S. Diplomat said. “Norway is well known for its efforts to resolve conflict and bring people together.”

Before the explosion, a car drove into the government quarter, the police said in a statement. No government ministers were hurt, Stoltenberg told broadcaster NRK.

Eirik Borg, a back office worker at stockbrokerage Fearnley Fonds based near the scene, said he saw smoke billowing from the government quarter after hearing the blast.

‘Hard Impact’

“We felt the impact very hard throughout the building,” Borg said in a phone interview. “All the windows were breaking and we actually thought lightning hit our roof. From our terrace, we saw white smoke.”

The bombing initially sent Norway’s currency and stocks lower. The krone weakened as much as 1 percent against the dollar and was trading 0.4 percent lower at 8:30 p.m. local time yesterday. Against the euro, the krone was little changed at 7.7851 after losing as much as 0.4 percent. The benchmark OBX stock index fell as much as 0.4 percent before closing little changed.

“Large sections of the center of Oslo have been evacuated and the police are urging people to stay away from the center of the city and limit their use of mobile phones,” police said in a statement. Sponheim said police don’t expect further blasts.

The country’s Ministry of Petroleum suffered “massive damage” as a consequence of the blast, spokesman Haakon Smith- Isaksen said by phone. Norway is the world’s seventh-largest oil exporter.

“There was a huge explosion, the windows just blew out,” Smith-Isaken said. “There is much debris, people are injured.”

--With assistance from Frances Schwartzkopff in Copenhagen, Kati Pohjanpalo and Diana ben-Aaron in Helsinki, Ola Kinnander, Johan Carlstrom, Adam Ewing, Kim McLaughlin and Toby Alder in Stockholm. Editors: Chad Thomas, Marianne Stigset

To contact the reporters on this story: Josiane Kremer in Oslo at jkremer4@bloomberg.net; Stephen Treloar in Oslo at streloar1@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

Continue Reading →

Obama Deal With Boehner Upset by Last-Minute ‘Gang of Six’ Plan

July 23, 2011, 1:45 AM EDT
More From Businessweek

    Boehner Says Debt Deal ‘Not Close’ Amid Internal Strife
    Camp Predicts Debt Ceiling Increase, Urges Tax-Code Overhaul
    Obama Spokesman Says No Deal Yet With Republicans on Budget
    Capital Gains Tax Break Threatened by Bipartisan Senate Plan
    Obama Open to Short-Term Debt Increase Tied to Major Deal

Story Tools

    add to Business Exchange
    E-mail
    Print

By Julie Hirschfeld Davis

July 23 (Bloomberg) -- President Barack Obama, running out of time to strike a deal to raise the U.S. debt ceiling, had some bad news for House Speaker John Boehner on July 20.

The tax overhaul they had been discussing to raise $800 billion in revenue over a decade had to be bigger, Obama told Boehner and House Majority Leader Eric Cantor during an evening meeting in the Oval Office. Obama’s new offer: $1.2 trillion.

A new proposal by the “Gang of Six,” a bipartisan group of senators who were calling for $3.7 trillion in budget savings over 10 years to slash the deficit, had changed the dynamics of the accord that Obama and Boehner had been negotiating in closed-door talks for weeks, the president told the speaker.

The group, praised by both senior Republicans and Democrats for its mix of spending cuts and tax increases, proposed a bigger revenue target than Obama and Boehner were considering, according to officials on Capitol Hill and at the White House who gave their accounts of the talks on condition of anonymity.

And Obama, who had called for months for the sort of grand bargain the gang was offering, was going to have a hard time selling a deal that stopped short of that.

The turnabout ultimately led Boehner to walk out of the talks, he said last night, unraveling the progress that had been made toward a sweeping compromise to slice $3.5 trillion from the nation’s debt and raise the $14.3 trillion debt ceiling before a default threatened Aug. 2.

Back to Beginning

The breakdown sent both sides back to the beginning with little room left to reach a deal to boost the nation’s borrowing authority in time to head off the default. Congressional leaders from both parties are to meet today at the White House in an effort to reach an accord.

“It’s the president who walked away from his agreement and demanded more money at the last minute,” Boehner, of Ohio, told reporters at an evening news conference on Capitol Hill, hours after calling Obama to tell him he was abandoning their negotiations. “Dealing with the White House is like dealing with a bowl of jello.”

It was the final breakdown in the private negotiations between Obama and Boehner over a politically challenging debt- reduction agreement both were eager to reach.

“We had very intense negotiations,” Obama said last night. “I’ve been left at the altar now a couple of times.”

The courtship began June 18, when Obama, 49, invited Boehner, 61, for a round of golf at Andrews Air Force Base. The two teamed up against Vice President Joe Biden, who was spearheading bipartisan talks on the deficit with congressional leaders, and Ohio Governor John Kasich, a friend of Boehner’s.

Bonding Session

More bonding session than policy debate, the president and the speaker beat Kasich and Biden, winning $2 each. Still, the golf date proved a turning point, spurring Obama and Boehner to begin one-on-one talks on a broad compromise. Four days later, Boehner was at the White House meeting privately with Obama to sketch out what the deal could look like.

The following day, Cantor, a Virginia Republican who has cultivated a close relationship with Tea Party-backed lawmakers leading the call for spending cuts, abandoned the bipartisan Biden-led talks after a half-dozen meetings. He said Democrats’ insistence on raising taxes made an agreement impossible. The group had been making slow but steady progress, identifying more than $1 trillion in spending cuts the two parties could agree on.

The following week, Obama held a news conference in which he accused Republicans of siding with corporate-jet owners over children and the elderly in the negotiations, and compared Congress’s work ethic unfavorably with that of his pre-teen daughters.

Dire Consequences

“The yellow light is flashing,” Obama said during the June 30 news conference, warning of dire consequences if Congress didn’t raise the borrowing limit before Aug. 2. Standard & Poor’s said it would downgrade U.S. debt to junk status in the event of a default, and the Senate canceled its July 4 recess to continue talking.

The following Sunday, July 3, Boehner and Obama met secretly at the White House to continue their talks. Enough progress was made that Obama appeared at a White House briefing on July 5 to say the nation had “a unique opportunity to do something big to tackle our deficit,” and announce he was summoning congressional leaders from both parties for talks at the White House July 7.

At the roughly 90-minute meeting, Obama polled congressional leaders about what kind of deal they were seeking -- a limited one of between $2 trillion and $2.5 trillion over a decade, a medium-size agreement yielding about $3 trillion, or a big deal to cut $4 trillion off the debt.

Obama and Boehner both wanted to go big.

‘No Imminent Deal’

Still, Boehner -- cognizant of intense opposition among Republicans to any agreement that raised taxes -- cautioned that there was “no imminent deal about to happen,” saying there remained “serious disagreements.”

“We are this far apart,” Boehner told reporters, spreading his arms to indicate the gulf between himself and the president. Yet behind the scenes, his staff and Obama’s were beginning to exchange paper on the contours of a compromise to bridge that divide.

The White House was willing to consider major changes to Medicare, Medicaid and Social Security, including benefit cuts, that had previously been considered off-limits. Boehner was willing to discuss a tax overhaul that would raise revenue, until then dismissed by the Republicans as a tax increase.

Boehner’s aides, including Chief of Staff Barry Jackson and Policy Director Brett Loper, were haggling with Obama’s budget director Jack Lew and legislative liaison Rob Nabors on the details. Resistance was brewing in both parties to such a deal.

Pelosi Displeased

Meeting at the White House with Obama on July 8, House Minority Leader Nancy Pelosi of California vented her displeasure about the prospect of including Social Security and Medicare cuts in any deal, and told him such a package wouldn’t garner support among congressional Democrats.

On Capitol Hill, Boehner and other House leaders held a press conference to reiterate their opposition to tax increases. Still, negotiations continued into Saturday morning July 9, when a round of negotiating among Boehner’s and Obama’s aides yielded little progress in breaking remaining stalemates over details of the tax rewrite and entitlement cuts.

Later that day, Boehner phoned the president at Camp David to tell him he was pulling the plug on a broad deal and would seek a more limited measure.

“Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt-reduction agreement without tax hikes,” Boehner said in a statement after the call.

No Stopgap Deal

Obama was still pressing for a broad agreement. He called a news conference on July 11 in which he ruled out the idea of signing a stopgap debt-limit boost and argued that the time was ripe for a major compromise to reduce the debt, whatever the political difficulties.

“We might as well do it now -- pull off the Band-Aid, eat our peas,” he said.

That didn’t stop Republican resistance. Senate Republican Leader Mitch McConnell of Kentucky proposed a fallback plan on July 12 -- a “last choice” option, he called it -- that would allow Obama to unilaterally raise the debt ceiling $2.4 trillion in installments, requiring that the president lay out the same amount of spending cuts and giving Republicans several opportunities to vote “no.”

At the close of a White House meeting July 13, Cantor pressed Obama about a shorter-term debt measure, prompting a testy response from the usually low-key president.

More Than Reagan

Leaning back from the table, Obama told Cantor that he’d been personally negotiating the details of the debt deal for weeks -- more than Ronald Reagan or George W. Bush would have done -- because he wanted to reach a deal that was important for the country. If Republicans sent him legislation he couldn’t accept, he’d veto it and take it to the American people, Obama said before closing the meeting.

Republicans announced they would move forward the next week with legislation that would slash spending, cap future expenditures, and condition a $2.4 trillion debt-ceiling increase on passage of a balanced budget constitutional amendment. Behind the scenes, though, Boehner and Cantor began serious talks with Obama’s staff on a major compromise.

The House Republicans invited Obama’s chief of staff Bill Daley and Treasury Secretary Timothy Geithner to Boehner’s Capitol office suite on July 15 for a quiet meeting on a framework for a tax overhaul, according to House Republican leadership aides.

Cutting Medicare

Over coffee and bagels at the White House July 17, with Obama popping in periodically to check their progress, the four negotiators, now joined by Lew, moved toward a deal to slash discretionary spending by $1.2 trillion over a decade and set a process for overhauling entitlements and the tax code within six to eight months to save trillions more.

The White House would agree to cut $250 billion from Medicare and trim Social Security benefits through a change in the way their annual increase is calculated. Republicans would agree to a tax rewrite that would raise no more than $800 billion while lowering rates, a number blessed by Geithner, the Republican aides said.

The two sides remained divided over key details, including an enforcement mechanism to ensure the entitlement and tax targets were met. The White House rejected the Republicans’ idea that future borrowing authority be conditioned on achieving the goals, and Republicans opposed Obama’s insistence on raising taxes on high earners while keeping them at the same level for the middle class in the event the promised debt savings didn’t materialize, the aides said.

‘Grand Bargain’

On July 19, as Boehner’s staff awaited a counterproposal from Obama’s aides, Democratic Senator Mark Warner of Virginia and Republican Senator Saxby Chambliss of Georgia, co-leaders of the Gang of Six, stood before about 50 senators in an ornate room on the first floor of the Capitol and pitched their long- awaited “grand bargain.” Obama made a surprise appearance in the White House briefing room to commend the outline, and Treasuries rallied on expectations of a long-term debt-reduction deal.

The president’s team told Boehner’s that their bottom line had changed based on the framework, a message Obama delivered to the speaker in person the next day at the White House, the Republican aides said. An administration official said the senators’ plan had changed the political dynamics in the push for a deal, making it harder to attract Democratic support for a proposal with a smaller revenue increase.

Obama Rebuffed

Still, Obama had no inkling Boehner was abandoning the talks until he began having trouble getting the speaker on the phone and Jackson stopped returning e-mails beginning the evening of July 21. Boehner’s office informed the president on July 22 at about 3:30 p.m. that the speaker would call Obama in two hours. Obama said he wanted to talk to Boehner right then and was rebuffed, administration officials told reporters.

The call came in as scheduled, not long after House Republican leadership aides finished briefing reporters about Boehner’s decision.

“Up until sometime early today when I couldn’t get a phone call returned, my expectation was that Speaker Boehner was going to be willing to go to his caucus and ask them to do the tough thing, but the right thing. I think it has proven difficult for Speaker Boehner,” Obama said at the White House.

“In the end,” Boehner wrote in a letter to Republican lawmakers detailing his decision, “we couldn’t connect.”

--With assistance from Mike Dorning, Kate Andersen Brower and Laura Litvan. Editors: Robin Meszoly, Mark McQuillan

To contact the reporter on this story: Julie Hirschfeld Davis in Washington at Jdavis159@bloomberg.net.

To contact the editor responsible for this story: Mark Silva at msilva@bloomberg.net

Continue Reading →

Clinton Warns S. China Sea Spats Threaten Asia Peace, Trade

July 23, 2011, 1:12 AM EDT
More From Businessweek

    U.S. Won’t Support Nuclear Talks Until North Korea Makes Changes
    North, South Korea Agree to Retry Stalled Nuclear Talks
    China-Based Spies Said to Be Behind Hacking of IMF Computers
    China, Asean Guidelines in Disputed Sea Shift ‘Status Quo’
    China Links Fast Nuclear Reactor to Grid After 40-Year Research

Story Tools

    add to Business Exchange
    E-mail
    Print

By Daniel Ten Kate and Nicole Gaouette

(Adds comments from State Department official in sixth paragraph.)

July 23 (Bloomberg) -- U.S. Secretary of State Hillary Clinton warned today that escalating tensions in the South China Sea risk disrupting trade flows and called on Asian countries to clarify territorial claims.

“The United States is concerned that recent incidents in the South China Sea threaten the peace and stability on which the remarkable progress of the Asia-Pacific region has been built,” Clinton told a regional security forum in Bali, Indonesia. “These incidents endanger the safety of life at sea, escalate tensions, undermine freedom of navigation, and pose risks to lawful unimpeded commerce.”

Clinton commended China and the 10-member Association of Southeast Asian Nations for agreeing to guidelines for joint activities in the waters last week and urged them to accelerate a legally binding code of conduct. She called on countries to “exercise self-restraint” and avoid occupying uninhabited islands in the disputed waters.

The U.S.’s alliance with the Philippines and naval power in the Asia-Pacific has led to tensions with China, which claims most of the South China Sea as its own. The Philippines and Vietnam have pushed ahead with oil and gas exploration over objections from China, which has used patrol boats to disrupt hydrocarbon survey activities in disputed waters.

‘Clarify Claims’

Clinton called on the countries “to clarify their claims in the South China Sea in terms consistent with customary international law, including as reflected in the Law of the Sea Convention,” Clinton said, according to prepared remarks that were given to reporters. “Consistent with international law, claims to maritime space in the South China Sea should be derived solely from legitimate claims to land features.”

Clinton is asking states to lay out their claims very clearly and unambiguously and to explain the legal basis for them, said a State Department official present for meetings on the South China Sea. That will force countries to look carefully at their approach, especially given that almost all claims to the waters are exaggerated, the official said, speaking on condition of anonymity.

The U.S. has not ratified the United Nations Law of the Sea Convention.

‘Nine-Dash Map’

China last week rejected an attempt by the Philippines to have the UN’s International Tribunal for the Law of the Sea decide on the territorial dispute. The Philippines plans to ask another UN arbitration panel to demarcate disputed areas of the sea “to prove our claim,” Foreign Secretary Albert F. del Rosario said on July 20.

Along with the Philippines, Vietnam and Indonesia have released statements to the UN saying China’s “nine-dash map” of the waters has no basis in international law.

China says its claims “are supported by abundant historical and legal evidence,” according to an April submission to the UN. It said the Philippines “started to invade and occupy” its islands in the 1970s.

Chinese ships cut survey cables of Vietnam Oil & Gas Group vessels twice in the past few months and in March chased away a boat working for U.K.-based Forum Energy Plc that was surveying the area. A Chinese frigate fired warning shots at Philippine trawlers on Feb. 25.

China’s actions in the waters provoked protests in Hanoi over the past month and prompted a group of Filipino lawmakers to travel last week to the disputed Spratly Islands, which are also claimed by Malaysia, Taiwan, Brunei, Vietnam and China. All those countries except Brunei have troops stationed in the area.

“We believe that it’s important to respect the sovereignty and territorial integrity of China,” Liu Weimin, spokesman for Foreign Minister Yang Jiechi, told reporters yesterday after his meeting with Clinton. “I sense that the U.S. side understands the sensitivities of these issues.”

--Editor: Ben Richardson, Jim McDonald

To contact the reporters on this story: Daniel Ten Kate in Bali at dtenkate@bloomberg.net; Nicole Gaouette in Bali at ngaouette@bloomberg.net

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net

Continue Reading →