Charles and David Koch, the reticent billionaires who bankroll Republican causes and candidates, have distanced themselves from their favoured party’s financial brinkmanship as corporate America reacts with growing horror to the imminent prospect of a US debt default.
Money from Koch sources has supported many conservatives in Congress who have led the charge to shut down the government and breach an imminent debt limit if Barack Obama does not abandon his healthcare reforms.
But the brothers’ privately held chemical conglomerate, Koch Industries, issued a rare public statement on Wednesday to deny allegations that the pair supported the high-risk strategy, and urged Congress to focus instead on balancing the budget.
“Koch believes that Obamacare will increase deficits, lead to an overall lowering of the standard of healthcare in America, and raise taxes,” spokesman Philip Ellender said in a letter to US senators. “However, Koch has not taken a position on the legislative tactic of tieing the continuing resolution to defunding Obamacare – nor have we lobbied on legislative provisions defunding Obamacare.”
The letter appears to have been prompted by mentions of the company’s role during a debate in the Senate.
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Michael Needham, CEO of the powerful group Heritage Action, said that he opposed conditioning a crucial vote to increase the government’s borrowing authority on the group’s main goal: defunding Obamacare.
Under questioning at a breakfast with reporters, hosted by the Christian Science Monitor, Needham, a product of the Stanford Business School, conceded that failure to raise the debt ceiling would indeed disrupt the global economy.
“I’m sure the markets will react negatively,” he said, even if, as he suggested was possible, the Treasury could “prioritize” interest payments to foreign bondholders.
Rather than try to hold the debt ceiling vote hostage to the defunding of Obamacare, he said, the better “tactical” course for Heritage and other key foes of the administration is to continue to focus on annual spending — and on allowing the full opening of government only if Obamacare is dismantled.
“No, we should raise the debt limit,” he said, though he added that he would oppose an increase that extends until after the 2014 election, which is Obama’s preferred outcome.