Monday, July 25, 2011


Antonio Zulueta owns the Luciano Italian restaurants at Tyson’s Corner and in Fair Oaks Mall in Fairfax. Like many Filipino-American businessmen, he’s dismayed and worried by the failure to hammer out a deal to lift the debt ceiling and cut the budget deficit.

“They’re playing chicken; naghihintay sila hanggang deadline para sa deal,” he tells the Manila Mail. Treasury officials warn the US could default on its loan obligations unless the debt ceiling is raised by August 2.

The Republican-dominated House of Representatives has insisted that raising the debt ceiling should be accompanied by an equivalent reduction in the budget. But negotiations stopped twice because President Obama was pushing for a “grand deal” composed of $3 billion in budget cuts, including entitlement reforms, and $1 billion in tax revenues.

Zulueta echoed observations that the US can not afford to default on its loans. “Malaki ang epekto sa businessmen. Credit natin maapektuhan; senior citizens will not get their social security benefits; maho-hold lahat ng payments,” he averred.

“Ganun ang mangyayari so why are they playing around with the lives of the American people?” he asked.

The major credit rating agencies have also warned that unless the debt and deficit issues are resolved convincingly, they may downgrade the US's gold-standard AAA rating, raising the prospect for higher interest rates on everything from credit cards to bank loans. That could impact on the recovery of the housing market whose meltdown fueled the worst US recession in over half a century.

“There will be hard times ahead,” predicted Aljo Gonzalez who describes himself as an employee and part-time businessman. “Operating capital will be more expensive so I don’t think it’s not something to look forward to,” he added.

Retiree Johnny Roque of Fairfax, VA said a balanced approach to addressing the budget cuts issue was needed to mitigate the adverse effects on needed government services. “We have to remember that we had a recession and two wars. We have to pay for all of these,” he noted.

“It has to be a balanced approach meaning we have to cut the deficit and at the same time raise revenues. We still have to spend money,” he opined.

They agreed that there was more than enough blame to spread around Washington DC. “It’s politics, pure politics,” Zulueta said deprecatingly.

A CBS News poll two weeks ago showed 58 percent of respondents disapproved of Democrats and 71 percent disapproved of Republicans in Congress.

President Obama and House Speaker John Boehner have blamed each other over the failure to find a compromise for lifting the $14.3 trillion debt ceiling. The White House and Congress are moving towards a fall-back proposal from Senate Minority Leader Mitch McConnell that was quickly embraced by Senate Majority Leader Harry Reid.

Zulueta indicated that the White House and Congress can ill afford to play out the debt ceiling drama until the 11th hour. “The market is going crazy, everybody’s going crazy over what’s going to happen on Aug. 2,” he said.

Eileen Nadal, a purchasing manager and president of the La Salle Alumni Association, warned about the “trickle down” effect of any fall-out from a possible default or even a drawn-out stalemate on budget negotiations.

“If you don’t have enough funds for projects, there will be more unemployment; a lot of things won’t get done,” she explained, adding that may affect her employer which means she will eventually feel the pain as well.

“It will trickle down to the little people,” Nadal averred.

Another cautionary note, Zulueta said, is how the White House and Congress will craft a compromise. “We are so focused on a balanced budget and balanced approach, but to me the most important thing is jobs, jobs, jobs,” he declared.

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