Suspect arrested for threatening Dutch stores

AMSTERDAM — The mayor of the Dutch city of Haarlem says a suspect has been arrested in connection with a threat issued from a Twitter account that led to the closure of several stores and a school in the city center.

Mayor Bernt Schneiders said Wednesday the man was being interrogated at police headquarters and a "certain trail" led from him to the Twitter account — now suspended — where the threat was originally made.

Haarlem police said in a statement they were taking the threat seriously and ordered the closure of several stores, posting guards in body armor outside. Sniffer dogs swept the buildings for bombs, but didn't find any. Students at a nearby high school were told to stay home.

The Tweets made late Tuesday said there would be a "bloodbath" at the department store V&D that would begin late Wednesday morning and end in suicide. Whoever placed the Tweets cited having been fired as the motive.

Schneiders confirmed that the person arrested had "had a labor conflict not so long ago."

"It does appear that this is some kind of revenge," he told local television RTV Nieuws.

Two V&D stores and a "La Place" restaurant were closed.

In April 2011, six people were killed by a psychologically troubled loner in a mall shooting in the Dutch city of Alphen aan den Rijn.

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French budget tries to turn page but growth weak

PARIS — The French government has declared the economic crisis over and is promising its new budget will bring growth and jobs. But experts are criticizing the proposals, saying they could derail the nascent recovery.

In a budget unveiled Wednesday, the government said it would cut the deficit by nearly 18 billion euros ($24 billion), 14.8 billion euros of which will come from spending cuts, the rest from taxes. The bill budgets 379.9 billion euros in spending for 2014.

The government has promised the measures will re-energize the economy by reducing the money spent on retirement and health benefits and by offering companies a tax credit if they hire. But taxpayers are grumbling about even the modest tax increase, and economists are split on the merits of cutting spending now, when the recovery is still weak.

"Purchasing power is our preoccupation," Finance Minister Pierre Moscovici told French television on the eve of the budget unveiling, calling it a budget for growth and employment.

Much of the criticism of the budget, however, was that it is in fact likely to hurt household spending.

Though the government argues the budget provides relief for lower income households, economists note that the tax credit meant to boost hiring at companies is being paid for largely by a hike to the sales tax. That directly takes money out of the pockets of shoppers of all incomes.

In terms of reducing the deficit, the budget is part of Paris' belated effort to fall in line with the rest of Europe's focus on cutting state spending. When counting items not included in the budget, France's public spending accounts for a stunning 57 percent of the country's 2 trillion-euro ($2.7 trillion) gross domestic product.

The slow approach is typical of Francois Hollande's tenure. The French president is famous for trying not to be famous. His most notable domestic policy so far, the creation of a 75 percent tax for millionaires, was rejected by a court and amended and reduced to the point that it lost much of its shock value. It was written into the new budget as a 50 percent tax paid by employers on all remuneration above 1 million euros.

The delays in reforms have drawn a critical eye from the European Commission, the executive arm of the European Union, and Germany, which led the push for austerity in Europe. While the Commission has softened its stance somewhat — notably giving France more time to reduce its deficit — the re-election of German Chancellor Angela Merkel this weekend was an endorsement of her tough line.

But the new budget is also coming under fire in some quarters for cutting too much since lower spending will hurt growth in the short term, just as the country is emerging from recession and with unemployment at 11 percent.

The economy grew 0.5 percent in the second quarter after contracting for two quarters. The figure, which could be revised as early as Friday, was stronger than expected, but experts warn it may have overstated the country's economic health.

Eric Heyer, an economist with the French Observatory for Economic Forecasts, says the economy remains in trouble and so spending cuts are still not advisable.

He estimates that spending cuts and tax increases — both in France and around Europe — will shave 1.3 percent off France's economic growth next year. Still, the observatory's forecast is among the most positive at a 1.3 percent increase in GDP. The consensus is somewhere just below 1 percent; the French government built its budget around a 0.9 percent estimate.

Heyer cautions that a return to growth doesn't mean France is rebounding.

"We can't talk about a recovery as long as economic growth is around 1 percent," he said. "Since today, we produce less than five years ago, we are still in recession. That's the real definition of a recession."

"The real rebound will be when we have a production level well above 2007 and when the economy has started to create jobs again. That's not in the government's scenario."

Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics in Washington, notes France has escaped the financial crisis without the explosions of unemployment and deep recessions seen in Southern Europe. But that also means it no longer has the motivation to make the real, deep reforms it also avoided.

"There's never going to be a hard landing. ... It's going to be a gradual underperformance," not only compared with Germany but also with traditionally weaker countries like Spain and Italy, he said.

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Review: New Surface tablets make typing easy

NEW YORK — Is Microsoft's Surface a tablet or a laptop?

I'm not quite sure, but it is a lot easier to type on than an iPad.

The software company unveiled updates to its Surface tablet computers Monday at an event in New York, where I had a short amount of time to try them out.

It almost seems unfair to categorize the new Surface 2 and Surface Pro 2 as tablets. Although they have touch-screen keyboards like regular tablets, they work best when attached to an optional cover with a keyboard on the inside.

The better one I tried was the Type Cover 2. In addition to coming in four fun colors — pink, purple, blue and black — that cover has backlighting, silent keys and a typing feel similar to that of a laptop keyboard. At $130, it is just $10 more than a Touch Cover 2, which doesn't have movable keys like real keyboards.

The slick wireless mouse designed for the tablets is helpful, too, as is the docking station created to go with the Pro version of Surface.

The result is something that looks more like a laptop than an iPad or Android tablet. And that's what Microsoft wants, calling its tablets the most productive on the market. The Surface 2 model even comes with a version of Microsoft Office, including the Outlook email and calendar program for the first time.

The Surface 2 starts at $449 and runs a lightweight version of Windows called RT, meaning it works only with apps designed specifically for it. The Surface Pro 2 starts at $899 and runs a full version of Windows, so it works with programs designed for traditional desktops and laptops. Both come with 200 gigabytes of online storage through Microsoft's SkyDrive for two years.

With the Surface, Microsoft is trying to create a seamless transition between home, work and the field. Microsoft doesn't want this device to just replace your tablet and laptop, but your office PC as well. It's a great idea, and I'll be interested to see if it can actually work in practicality.

Like a laptop, both the Surface 2 and the Surface Pro 2 balanced well and didn't slide around on my lap when attached to keyboards. I felt very comfortable typing and had a clear view of the screen.

A setup like this would be very helpful for all those events I've had to cover, including Monday's, where I wasn't able to sit at a table and had to balance my tablet or laptop on my lap while I typed. For the new versions, Microsoft improved the built-in kickstand used to hold the tablet up like a laptop screen. It is sturdier and works in two positions, one for sitting on your lap and another for placing on a table. The kickstand on older Surfaces had just one position, for the table.

My only complaint is that the keyboard was just a little bit too big for my lap and didn't have quite enough space to lay flat. But at 5 foot, 2 inches, I'm small. If you're taller, you shouldn't have a problem.

Although the tablets are focused on productivity, they also have some fun elements. Besides the usual games and apps available in Microsoft's app store, the Surface Pro 2 can be used to play PC and Xbox games such as the popular "World of Warcraft" and "Halo" series. Although you don't quite get the same visual experience as you do with a big screen, gamers will like portability. It's a big step up from playing "Angry Birds" or "Fruit Ninja." (Yes, those games are available in Microsoft's app store, too.)

Both Surface models felt a little bulky and heavy to me. That said, the Surface 2 weighs about the same as the latest version of the full-size iPad at about 1.5 pounds, while the Surface Pro 2 weighs in at 2 pounds.

At the same time, the Surface tablets feel a little more rugged than an iPad. Microsoft touts them as nearly indestructible, pointing to their heavy-duty glass and magnesium-alloy casing. It claims you could hit it with a sledge hammer or run it over with a car. I can't wait to hand one to my less-than-gentle 3-year-old daughter and see what damage she's able to inflict on it.

According to Microsoft, both tablets feature significant improvements in speed, cameras and battery life. I didn't have enough time with the devices to test those out, and I'm looking forward to spending more time with it. And it'll be interesting to see how well the Pro version works as a desktop when attached to a docking station, which will sell for about $200 when it comes out early next year.

Based on an early look, though, Microsoft seems to have learned from its mistakes and refreshed the Surface lineup with devices that feel better on the lap.

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Lawsuit in Binghamton shooting rampage dismissed

BINGHAMTON, N.Y. — A federal judge has dismissed a $3.75 million lawsuit filed against sporting goods retailer Gander Mountain by the husband of a woman killed in a shooting rampage at a Binghamton civic organization four years ago.

Samir Muhammad Al-Salihi's lawsuit filed in April 2011 alleged that the St. Paul, Minn.-based company's employees were negligent in selling Jiverly Wong semi-automatic pistols and ammunition. Al-Salihi's wife was among the 13 people who Wong killed at the American Civic Association in April 2009 before committing suicide.

The lawsuit alleged that Wong exhibited signs of being mentally unstable while purchasing the firearms, and that Gander Mountain should have been on notice that he was likely to use the guns to harm himself or others.

U.S. District Judge Norman Mordue dismissed the complaint in a 30-page decision issued Friday, according to the Press & Sun-Bulletin of Binghamton.

"There is simply no evidence demonstrating that ... Gander Mountain knew or should have known that Wong posed an unreasonable risk of harm to himself or others," Mordue wrote.

According to court documents, Wong purchased two firearms at Gander Mountain's former Johnson City store that were later found at the scene of his shooting rampage.

Arguments in the lawsuit hinged on evidence of Wong's behavior in front of Gander Mountain employees. Four current and former workers were subjected to depositions, and Gander Mountain provided a videotape of Wong's presence in the store.

Mordue drew heavily from the employees' statements.

"He was a quiet man who frequently visited the store, was always by himself, and never caused trouble while on the premises," Mordue wrote.

Kelly Fischer, the Binghamton-based attorney representing Al-Salihi, could not immediately be reached for comment.

Al-Salihi's lawsuit against Gander Mountain had been the sole civil lawsuit stemming from the shooting.

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3 things small businesses must do for health care

NEW YORK — A critical date is approaching for small business owners: Starting Oct. 1, they must make decisions about employee health insurance under the Affordable Care Act.

All companies have obligations under the ACA, no matter how many workers they have or whether they plan to provide insurance. They must provide information about insurance to employees. They need to think about what kind of insurance to provide, and whether to get it through a broker or to use the state or federal exchanges known as SHOP, or the Small Business Health Insurance Options Program.

Many owners are still in the dark. Tim Finnell, an employee benefits broker and consultant in Memphis, sees that when he holds seminars for small business owners. One last week drew 200 people.

"The average person doesn't know what's going on," says Finnell, president of Group Benefits LLC.

Many owners also have incorrect information, says Matt Thomas, president of Worksmart Systems, an Indianapolis-based company that provides human resources services. Many believe that the Obama administration's decision to give companies a reprieve from paperwork requirements until 2015 means they don't have to comply with the rest of the ACA. That's not true.

Here are three things that small businesses should be doing now:

GET UP TO SPEED

Owners need a basic understanding of the ACA, know what's required and get familiar with the insurance plans in their states.

"They need to understand the exchanges, the difference between individual exchanges and the SHOP," says Lisa Keith, president of Princeton HR Solutions in Princeton, N.J. "They need to understand minimum value (the government's definition of affordable insurance).

There are online resources, including the federal government's ACA website, http://business.usa.gov/healthcare, and the Small Business Administration's, www.sba.gov/healthcare .

States also have websites but not all are fully functional yet. All are supposed to be operating on Oct. 1.

Owners should learn about the tax impact of the ACA. For example, there are tax credits available to some companies that buy insurance through the exchanges.

The education process shouldn't stop Jan. 1. Owners should keep up with changes to the law that may continue into next year, says Bill Norwalk, a tax accountant at Sensiba San Filippo LLP in Pleasanton, Calif.

GET HELP

The ACA is complex and has spawned thousands of pages of regulations. Owners should get help from a professional, whether it's an insurance broker, benefits consultant or an attorney who specializes in health care law.

"There's absolutely no way that an employer of any size, with the continuing moving parts, can know all of it," says Nancy Thompson, a vice president with CBIZ Benefits & Insurance Services in Columbia, Md. "Employers need to be with someone that is strategically working with clients to help them navigate it."

The law has many details and nuances, says Vince Ashton, CEO of HealthPass New York, a private health insurance exchange for small businesses. For example, one benefit that insurance plans must offer is children's dental insurance. But most medical plans won't include it, and owners should buy a separate policy, Ashton says.

His recommendation: Talk to a broker.

"They're going to know what the different (insurance) carriers are doing, how they're changing their plans, what benefits are changing, how benefits are changing," Ashton says.

Sandi Webster, owner of a marketing consultancy in Newark, N.J., doesn't have the time to navigate the ACA.

"We have to marshal outside forces to help us figure it out," says Webster, owner of Consultants 2 Go.

COMMUNICATE WITH WORKERS

The ACA requires employers to give workers information about health insurance options. But owners should also keep staffers in the loop about the company's plans.

By Oct. 1, employers must give each worker what's called a Notice to Employees of Coverage Options. They must do so whether or not they offer health insurance, and whether or not they will be required to provide insurance under the law. The notice gives workers information about exchanges and current and future health benefits provided by their employers. It also lists the dependents of each worker who is covered.

The Department of Labor has a model for the notice at its website, www.dol.gov/ebsa/healthreform . Health insurance brokers and benefits consultants can help owners create their own notices.

Owners who plan to cover employees also must give them a Summary of Benefits Coverage by the start date for their policies.

Employees will have questions. Owners might want to bring in an expert to talk to workers.

"We're having our brokers come in and sit with everyone and make sure they fully understand where everyone's going," says Brent Brandow, owner of Parkway SleepHealth Centers, a Cary, N.C., company that diagnoses and treats sleep disorders.

Owners should be prepared to explain, and perhaps defend, their decisions to not provide insurance, particularly for part-time workers. Employers subject to the law don't have to provide coverage for anyone working fewer than 30 hours a week.

They may need to say that the business can't afford to cover everyone, says Rob Wilson, CEO of Employco, a Chicago-based provider of human resources services.

"You need to have an open dialogue about the state of the company."

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USPS seeks 3-cent increase for first-class mail

WASHINGTON — The financially ailing Postal Service is seeking a 3-cent increase in the cost of mailing a letter — and that would raise the price of a first-class stamp to 49 cents.

The chairman of the postal Board of Governors, Mickey Barnett, cites the "precarious financial condition" of the agency and the uncertain prospects for postal overhaul legislation in Congress.

The agency expects to lose $6 billion this year.

Wednesday's request for the increase in stamp prices must be approved by the independent Postal Regulatory Commission.

The Postal Service said it would ask for adjustment to bulk mail rates in a filing with the commission Thursday. No details were immediately provided.

Media and marketing businesses say a big increase in rates could hurt them and lower postal volume and revenues.

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Despite Cruz, Senate heads toward Obamacare vote

WASHINGTON — Freshman Sen. Ted Cruz' all-night talkathon to dismantle President Barack Obama's health care law surpassed the 21-hour mark Wednesday with a harsh reality looming — a test vote the tea party conservative was sure to lose.

As Cruz' speaking time was nearing its end, he offered to skip the initial vote and shorten debate on the underlying stopgap spending bill that's required to avert a government shutdown after midnight on Monday. The Senate's top Democrat said the vote would go ahead as planned.

Since Tuesday afternoon, Cruz — with occasional remarks by Sen. Mike Lee, R-Utah, and other GOP conservatives — has controlled the Senate floor and railed against Obamacare. At 10:41 a.m. EDT Wednesday, Cruz and his allies reached the 20-hour mark, the fourth-longest Senate speech since precise record-keeping began in 1900.

That exceeded March's 12-hour, 52-minute speech by Sen. Rand Paul, R-Ky., like Cruz a tea party lawmaker and potential 2016 presidential contender, and filibusters by such Senate icons as Huey Long of Louisiana and Robert Byrd of West Virginia.

With no food or restroom breaks, his tie finally loosened, Cruz kept pushing on to a predetermined adjournment of the Senate at noon. Cruz was helped by eight of his conservative allies who gave him brief respites by asking lengthy questions as permitted under Senate rules, though he was required to remain on his feet.

Cruz said he has learned that defying party leaders is "survivable," adding, "Ultimately, it is liberating" and that his long evening involved "sometimes some pain, sometimes fatigue."

But he added, "You know what? There's far more pain in rolling over. ... Far more pain in not standing up for principle."

Republican leaders and several rank-and-file GOP lawmakers had opposed Cruz's time-consuming effort with the end of the fiscal year looming. They fear that Speaker John Boehner and House Republicans won't have enough time to respond to the Senate's eventual action.

Two financial deadlines loom — keeping the government operating after Oct. 1 and raising the nation's borrowing authority. In a letter to Congress on Wednesday, Treasury Secretary Jacob Lew said the government will have exhausted its borrowing authority by Oct. 17, leaving the United States with just $30 billion cash on hand to pay its bills.

That's a slightly worse financial position than Treasury predicted last month and it adds to the pressure on Congress to increase the government's borrowing cap to avert a first-ever U.S. default on its obligations.

Determined to pressure the Democrats, Republicans have raised the possibility of adding a one-year delay to the individual mandate of the health care law to any legislation to raise the borrowing authority.

Paul, who has questioned Cruz's tactics, gave the admittedly tired Texan a respite Wednesday morning by joining the debate and criticizing Obamacare. But in a reflection of the limited GOP support for Cruz' effort, no members of the Senate leadership came to the Texan's aid. Cruz did, however, get help through the wee hours of the morning from Lee.

Senate Majority Leader Harry Reid, D-Nev., downplayed the significance of Cruz's speech after arriving at the Capitol Wednesday morning.

"He raised some money with the tea party folks," Reid said. "That's what it's all about."

The House-passed measure is required to prevent a government shutdown after midnight Monday and contains a tea party-backed provision to "defund" implementation of what's come to be known as "Obamacare". Cruz is opposed to moving ahead on it under debate terms choreographed by Democrats to defeat the Obamacare provision.

The mechanics of advancing the bill were overshadowed by Cruz's speech, which included a reading of Dr. Seuss' "Green Eggs and Ham" to his daughters back home in Texas.

"When Americans tried it, they discovered they did not like green eggs and ham and they did not like Obamacare either," Cruz said. "They did not like Obamacare in a box, with a fox, in a house or with a mouse. It is not working."

Senate rules are working against Cruz, who also has angered many GOP colleagues who complain privately that the freshman has set impossible expectations at the expense of other Republicans. Some of Cruz's leading allies include organizations like the Senate Conservatives Fund and the Club for Growth that frequently donate money to conservatives challenging more moderate Republicans in primaries.

At issue is a temporary spending bill required to keep the government fully open after the Oct. 1 start of the new budget year. Hard-charging conservatives like Cruz see the measure as an opportunity to use a must-pass measure to try to derail Obama's signature health care law.

Under pressure from Cruz and tea party activists, House GOP leaders added the anti-Obamacare language to the funding measure despite fears it could spark a partial government shutdown that could hurt Republicans in the run-up to midterm elections next year — just as GOP-driven government shutdowns in 1995-96 help revive the political fortunes of President Bill Clinton.

"I just don't believe anybody benefits from shutting the government down, and certainly Republicans don't," said Sen. Orrin Hatch, R-Utah. "We learned that in 1995."

Cruz took the floor at 2:41 p.m. Tuesday, vowing to speak until he's "no longer able to stand." Wearing black athletic shoes, he filled the time in a largely empty chamber, criticizing the law and comparing the fight to the battle against the Nazis. He talked about the Revolutionary War, the Washington ruling class and his Cuban-born father who worked as a cook.

Missing from the debate were top Republicans like Senate Minority Leader Mitch McConnell of Kentucky and Cruz's home-state GOP colleague John Cornyn, who say that on a second vote later this week, they will support ending Cruz's effort to derail the funding bill. That vote is crucial because it would allow top Reid of Nevada to kill the Obamacare provision on a simple majority, instead of the 60 votes often needed for victory.

Democrats control the chamber with 54 votes.

"I think we'd all be hard-pressed to explain why we were opposed to a bill that we're in favor of," McConnell told reporters Tuesday. "And invoking cloture on a bill that defunds Obamacare ... strikes me as a no-brainer."

The overnight debate included some diversions.

Lee discussed a childhood accident in which his foot was run over by a car driven by his father and spoke of his longing to be a pirate. Cruz recalled his first Christmas dinner with his future wife's vegetarian parents, which he described as "just like any other Christmas dinner except the entree never comes."

As the sun rose, Cruz was helped by another tea party favorite and possible rival for the 2016 GOP presidential nomination: Sen. Marco Rubio. The Florida lawmaker spoke for over an hour about the damage he said Obamacare is doing to the economy, as Cruz — who must remain in the chamber and standing to retain control of the debate — strolled in a nearby aisle and occasionally leaned against desks.

Despite his tenacity, it seemed Cruz would not surpass the longest Senate speech on record, a 24-hour, 18-minute filibuster by South Carolina Sen. Strom Thurmond against the civil rights act in 1957.

__

Associated Press reporters Alan Fram and Donna Cassata contributed to this report.

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J.C. Penney shares plunge to new lows

J.C. Penney Co. shares are trading at their lowest level in nearly 13 years, as the department stores operator's woes appear to be worsening.

The retailer has struggled for some time with weak sales, a bungled turnaround effort, management changes and board resignations. A number of large shareholders have sold off their stake in the company.

Wednesday's free fall comes as a New York State Supreme Court Judge summoned lawyers for Martha Stewart, J.C. Penney and Macy's Inc. to a hearing, almost two months after the three made closing arguments in a lengthy battle over J.C. Penney's controversial partnership with the homemaking maven.

It also follows recent reports that the retailer is looking to raise more money, possibly through a combination of debt and equity. J.C. Penney's reported search for more capital comes after it arranged a $2.25 billion loan this past spring with Goldman Sachs.

Daphne Avila, a spokeswoman for Plano, Texas-based J.C. Penney, said she is unable to comment on stock performance or unconfirmed reports based on market speculation. She had no updates on the court's activity Wednesday morning.

There is speculation that the judge wanted a hearing to determine whether some media reports were accurate that J.C. Penny is planning to dump Martha Stewart designed home furnishings line, even before waiting for the judge's ruling on the case.

Macy's, which has a long-standing contract with Martha Stewart, sued Penney and Martha Stewart for signing a 10-year contract with the domestic diva in late 2011.

The J.C. Penney deal was signed by its former CEO Ron Johnson as part of an overall plan to reinvent the retailer. But his new merchandising and pricing plan failed, leading to massive losses. Johnson was replaced by his predecessor Mike Ullman in April.

Ullman has been unraveling many of the changes made by Johnson in an attempt to turn around the business.

"The stock is getting destroyed because of the realities that are happening every day at Penney," said Belus Capital Advisors analyst Brian Sozzi.

He believes that reports that Penney is dumping Martha Stewart shows how it's trying to quickly get rid of poor-selling merchandise. He also believes that Penney finished off a weak back-to-school season and is looking for more financing.

J.C. Penney shares fell $1.44, or 12, to $10.46 by in midday trading. The stock dropped as low as $9.93 earlier in the session, a level it last traded at in the fall of 2000.

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IHS study puts iPhone 5S production costs at $191

NEW YORK — While the iPhone 5S includes a handful of new features that set it apart from Apple's previous model, the actual cost to make the phone hasn't changed very much, according to a new study.

An IHS Inc. teardown of the new smartphone found that the components that make up a 16-gigabyte iPhone 5S cost $190.70. Manufacturing costs add another $8, bringing the total production cost to $198.70.

In comparison, the iPhone 5, which hit the market a year ago, cost $197 to make.

Andrew Rassweiler, IHS' senior director for cost benchmarking services, noted that the 5S includes features new to the smartphone world, such as a 64-bit apps processor and a fingerprint identification sensor, without a significant jump in costs.

The research firm also dissected a 16-gigabyte iPhone 5C, a cheaper version of the 5S, and put its total production cost at $173.45, including $7 in manufacturing costs.

Rassweiler said the 5C is basically an iPhone 5 wrapped in plastic, noting that it has basically the same features, but benefits from typical component price drops, along with its cheaper plastic enclosure.

The 5C has a starting sticker price of $549, but will sell for $99 with a two-year wireless contract. It's Apple's least-expensive iPhone ever and is an effort to boost sales in China and other areas where people don't have as much money to spend on new gadgets as they do in the U.S. and Europe. But critics have said that the phone is still too expensive to sell well in emerging markets.

IHS said that while it costs substantially less to produce an iPhone 5C than it did an iPhone 5, those costs are still on the high side.

It added that in order to merit the low-end smartphone pricing of $400 that many industry observers had expected, while maintaining typical Apple profit margins, the company would need to reduce its 5C production costs to about $130.

Monday Apple reported that it sold 9 million of the two new models since their launch on Friday — its strongest iPhone launch ever — and that demand was exceeding supply.

In midday trading, shares of the Cupertino, Calif., company slipped $5.98 to $483.12.

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US borrowing authority to be exhausted by Oct. 17

WASHINGTON — Treasury Secretary Jacob Lew said Wednesday the government will have exhausted its borrowing authority by Oct. 17, leaving the United States just $30 billion cash on hand to pay its bills.

That's a slightly worse financial position than Treasury predicted last month and adds to the pressure on Congress to increase the government's borrowing cap soon to avert a first-ever U.S. default on its obligations.

In a letter to top congressional leaders, Lew warned that a repeat of the debt brinksmanship of 2011 could inflict great harm on the economy and that "if the government should ultimately become unable to pay all of its bills, the results could be catastrophic."

The government reached its $16.7 trillion debt limit in May. Since then, it has been using "extraordinary measures" such as suspending U.S. investments in federal employee trust funds to create about $300 billion in additional borrowing room.

But on the 17th the government will be left with only its cash cushion and daily receipts to pay its bills. Lew warned that before long it would not be able to meet all of its obligations. Economists and financial market experts warn that the stock market could plummet and that investors would demand higher returns on Treasury notes, which could raise interest rates and harm the economy.

It's generally assumed that Treasury would make sure that the government wouldn't default on Treasury notes held by investors, including foreign countries like China, If it did default on such debt obligations it could be a catastrophe for the economy.

A House-passed stopgap spending measure pending before the Senate contains a GOP-backed provision that would give Social Security recipients and bondholders priority in receiving payments from the government.

Lew again rejected the idea.

"The United States should never have to choose, for example, whether to pay Social Security to seniors, pay benefits to our veterans, or make payments to state and local jurisdictions and health care providers under Medicare and Medicaid," Mr. Lew said. "There is no way of knowing the damage any prioritization plan would have on our economy and financial markets. It would represent an irresponsible retreat from a core American value: We are a nation that honors all of its commitments."

Lew again warned that President Barack Obama would not negotiate with Republicans over the debt limit.

"The president remains willing to negotiate over the future direction of fiscal policy, but he will not negotiate over whether the United States will pay its bills for past commitments," Lew wrote. Extending borrowing authority does not increase government spending; it simply allows the Treasury to pay for expenditures Congress has already approved."

Republicans want to add budget cuts and other legislation like a one-year delay of "Obamacare." House leaders hope to bring a debt limit increase to the floor by the end of this week but they haven't released any details yet.

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