Debt ceiling no place for stand on spending: Nasdaq's Greifeld

NEW YORK Tue Jan 8, 2013 9:21pm EST

Robert Greifeld, CEO of the Nasdaq-OMX Stock Market, attends a news conference for the Campaign to Fix the Debt at the Nasdaq Market site in New York January 8, 2013. REUTERS/Brendan McDermid

Robert Greifeld, CEO of the Nasdaq-OMX Stock Market, attends a news conference for the Campaign to Fix the Debt at the Nasdaq Market site in New York January 8, 2013.

Credit: Reuters/Brendan McDermid

NEW YORK (Reuters) - The U.S. borrowing limit should not be used as leverage by members of Congress to force the Obama administration to cut spending as there will be other opportunities to make a stand, said Robert Greifeld, chief executive of Nasdaq OMX Group.

The debt ceiling, which could be hit as early as mid-February, has been dragged into a high-stakes fiscal battle snarling Washington, with Republicans refusing to raise it unless Democrats agree to deep spending cuts to tame the ballooning national debt. Neither side is giving much ground.

"The full faith and credit of the U.S. government is an important concept that we should not violate, because these are debts that have been incurred and are coming due, so it is just not right," Greifeld said in an interview on Tuesday.

A failure by Washington to reach a deal to increase the $16.4 trillion legal limit on the nation's debt raises the threat of a U.S. default, another credit downgrade and a panic in the financial markets.

Greifeld is one of more than 100 CEOs who are part of a group called "Campaign to Fix the Debt." The group has been pushing Congress to work together to create a long-term plan to get the federal deficit under control through both increased taxes and spending cuts.

TRIPLE FISCAL FIASCO

Fix the Debt mounted a media blitz in the two months leading up to the so-called fiscal cliff - a package of automatic tax increases and indiscriminate spending cuts scheduled to start at the beginning of the year that threatened to push the nation back into recession, until averted by last-minute legislation.

During the media campaign, the business leaders lined up to say it was okay to raise taxes on the wealthy, but that spending cuts in programs such as Medicare and Social Security were needed as well to put the United States on a more sound fiscal footing.

But the 11th-hour bill, which included tax hikes on household incomes over $450,000, pushed forward the decision on spending cuts, known as the "sequester," by two months, setting up another, possibly more damaging scenario.

In late February-early March, the delay in the sequester ends, the federal government hits its borrowing limit, and authorization for the federal budget runs out.

Erskine Bowles, a former chief of staff to Bill Clinton who along with former Republican senator Alan Simpson founded Fix the Debt, called it "a triple fiscal fiasco."

"If you think you saw uncertainty and concern when we were facing the fiscal cliff, man, you haven't seen anything yet," Bowles told reporters at a press conference at Nasdaq's MarketSite in New York.

SEVERELY DISAPPOINTED

Raising the debt ceiling periodically has not traditionally been a major issue, as government must account for the deficits resulting from its tax and spending decisions.

But last August was an exception. Congress attempted to make spending cuts a condition of raising the debt ceiling, causing volatility in the markets as the United States was pushed to the brink of default and its credit rating was cut.

Greifeld said he and other CEOs were "severely disappointed" that meaningful spending cuts were not addressed in the fiscal cliff negotiations, but that they are hopeful a more balanced approach will be taken in the near future. There will also be other opportunities to force the issue.

"The sequester - we kind of stand out there as the place to make a stand. The debt ceiling is not the place to do it," he said.

(Reporting by John McCrank; Editing by Lisa Shumaker)

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Comments (2)
boonteetan wrote:
China is getting more reluctant to purchase shaky US securities especially when US national debt has overshot the threatening $16 trillion mark. Even slowing down the purchase would be deemed too risky, chances are Beijing would want to minimize it as much as possible. (btt1943, vzc1943)

Jan 08, 2013 9:34pm EST  --  Report as abuse
fugedaboudit wrote:
Grefield and his ilk really get it. This is not the time and place for negotiation. The money has been spent and we have to pony up, no ifs or buts. The problem lies with the House Republicons who claim that they are trying to be fiscally conservative. They didn’t pay for a decade plus of trillion dollar tax cuts while we waged 2 trillion dollars worth of war on the govt. credit card. They are perfectly happy to have the taxpayers give tens of billions of dollars per year to subsidize big oil and agribusiness while saying that we need to get a handle on “entitlements”. That’s code speak for screw the little people, we like the ones who pad our coffers for campaign contributions. And don’t forget that when we leave office, we’ll have a soft place to land as a K Street lobbyist and/or board member for a blue-chip corporation. Pity the poor Repubs who are decimating their ranks with their petty infighting between the teabaggers and those who would be reasonable otherwise. They call Obama a bully because he no longer is trying to reason with the unreasonable. The House legislates, appropriates and spends. All they have to do is raise the debt limit and then pass a bill that reduces spending one or two percent across the board beginning Oct 1 and that will go a long way towards reducing our deficit. Also, as a side note, raise the cap on Fica to about 200,000 and SS will be solvent forever. Just sayin…

Jan 09, 2013 12:30am EST  --  Report as abuse
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