TREASURY
Congress to get debt-limit extension
Treasury Secretary Timothy F. Geithner is giving Congress a little more breathing room to negotiate a deal that would raise the nation’s borrowing limit.
In a new letter to congressional leaders, Mr. Geithner said Monday that he can delay an unprecedented default on the debt until Aug. 2, using a series of bookkeeping maneuvers to keep the government running. That’s a significant extension from the July 8 deadline Mr. Geithner previously cited.
The U.S. government will reach its $14.3 trillion borrowing limit on May 16. After that time Mr. Geithner can take such steps as removing investments from government employee and retiree pension funds to keep from going over the limit.
Republicans have said they will not vote to raise the debt limit until an agreement is reached with the White House on further spending cuts.
The debt subject to limit stood at $14.24 trillion as of last Friday, $58.1 billion below the current limit. With Congress back from a two-week recession, negotiations are expected to begin in earnest this week on the debt limit.
Mr. Geithner said he will begin making moves on Friday to delay a default.
OIL
Prices settle lower due to bin Laden, dollar
NEW YORK | Oil settled slightly lower Monday after volatile trading driven by uncertainty about extremist retaliation for the death of Osama bin Laden and the strength of the dollar.
Benchmark crude for June delivery fell 41 cents to settle at $113.52 a barrel on the New York Mercantile Exchange. In London, Brent crude lost 77 cents to settle at $125.12 a barrel on the ICE Futures exchange.
Bin Laden was killed Sunday by U.S. forces in Pakistan. Oil fell below $111 a barrel early Monday morning shortly after President Obama announced bin Laden’s death. By midmorning it was on the rise again, reaching $114.83 before it reversed course. Analysts say traders are concerned that bin Laden’s death may lead to retaliation from his followers that could affect oil supplies.
Oil also followed the dollar’s ups and downs. Oil rose as the dollar retreated from an early rally on news of bin Laden’s death. Later, as the dollar came back from its low, crude fell. Oil is priced in dollars. A weaker dollar makes crude more attractive to buyers with foreign currency, and the price tends to rise. The opposite often happens when the dollar strengthens.
AUTO
Production of new Honda Civic, others cut
DETROIT | Honda Motor Co. warned U.S. dealers Monday that it will run short of popular models such as the Civic compact later this summer because of parts shortages caused by Japan’s earthquake.
It said normal production may not return until the end of the year.
Honda will significantly cut production of the new 2012 Civic, the sixth-most-popular car in the U.S., through the summer, if not longer.
In addition, the 2012 version of the CR-V small SUV will be delayed by at least a month this fall. To make up for shortages, Honda will keep making the 2011 version.
SWITZERLAND
More than $400 million possibly Gadhafi’s funds
GENEVA | The Swiss government said it has identified assets worth more than $416 million that may belong to Libyan leader Moammar Gadhafi or his entourage.
Swiss Foreign Minister Micheline Calmy-Rey revealed the figure Monday at a diplomatic meeting in Tunis, the Tunisian capital.
She also said Switzerland has linked some $474 million to former Egyptian President Hosni Mubarak and $69 million to Tunisia’s deposed autocrat Zine El Abidine Ben Ali.
Switzerland ordered banks and other financial institutions to freeze assets possibly belonging to the three men and key supporters to prevent the funds from being secretly withdrawn.
The Swiss government said Tunisia and Egypt have already started legal proceedings to claim the assets.
AIRLINES
Southwest completes purchase of AirTran
DALLAS | Southwest Airlines Co. closed its $1 billion purchase of AirTran on Monday, securing its spot as one of the biggest domestic airlines.
For travelers, nothing much changes right away. They’ll continue to deal with whichever airline sold their ticket. And policies such as checked-bag fees are not changing right away. AirTran charges for checked baggage, while Southwest allows two bags for free.
Integrating the two airlines will take years. Southwest plans to begin painting AirTran airplanes in Southwest colors next year. It expects to get a single operating certificate from the Federal Aviation Administration in the first quarter of 2012.
“It will take several years to fully transition AirTran into Southwest Airlines to become one airline,” Southwest stated.
Buying AirTran Holdings Inc. gives Southwest its first presence in Atlanta, as well as at Ronald Reagan Washington National Airport.
From wire dispatches and staff reports
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