March 4 (Bloomberg) -- Blackstone Group LP’s head of restructuring and reorganization said across-the-board spending cuts by the federal government will hamper corporate growth and increase investment uncertainty, giving his unit more opportunities to advise struggling companies.
“To my business it probably means there is going to be some future opportunity,” Tim Coleman said today in an interview on Bloomberg Television’s “Market Makers” with Erik Schatzker and Stephanie Ruhle. Coleman said 750,000 jobs could be lost if sequestration, the U.S. federal spending cuts that went into effect March 1, continues without a resolution between congressional Democrats and Republicans.
President Barack Obama and the Democrats say they want a “balanced” approach including higher tax revenue as well as spending cuts. Republicans say they won’t agree to higher tax revenue after Congress voted Jan. 1 to raise tax rates on top incomes. The two sides have yet to reach a deal.
“If you are concerned about where the economy is going and what’s going to happen in our world, you’re not going to go buy a new company or build a new plant,” said Coleman. “You’ll cut your capital-expenditures budget. We’ve been very busy over the past year because not every company is able to grow beyond its balance sheet.”
--Editors: Sree Vidya Bhaktavatsalam, Christian Baumgaertel