White House Recap August 6-12, 2011: The Obama Presidency’s Weekly Recap — Standard & Poor’s US Credit Rating Downgrade & Celebrating Ramadan at the White House

WHITE HOUSE RECAP

WHITE HOUSE RECAP: AUGUST 5-12, 2011

President Barack Obama delivers a statement
White House Photo, Samantha Appleton, 8/8/11

Weekly Wrap Up: Common Sense Solutions

Source: WH, 8-12-11

Download Video: mp4 (100MB) | mp3 (10MB)

Common Sense Solutions: On Monday, August 8th, President Obama addressed our nation’s credit downgrade and said that our nation’s problems are “eminently solvable.” He laid out steps Congress can take right now to jumpstart the economy. “Specifically, we should extend the payroll tax cut as soon as possible, so that workers have more money in their paychecks next year and businesses have more customers next year,” said the President. Watch the remarks.

Crisis in Africa: Right now, thousands of families are starving as a result of a famine caused by the worst drought in the Horn of Africa in 60 years. This week, Dr. Jill Biden led a delegation including former Senator Bill Frist and USAID Director Rajiv Shah to the Dadaab Refugee Camp in Kenya where they witnessed the suffering first hand. If you are as touched by their plight as Dr. Biden and her team, there are many ways you can help,

New Fuel Rules: On Tuesday, President Obama announced historic new fuel efficiency standards for work trucks, buses and other heavy-duty vehicles. These new standards will save American businesses approximately $50 billion over the life of the program, while reducing oil consumption by a projected 530 million barrels and greenhouse gas (GHG) pollution by approximately 270 million metric tons. Transportation Secretary Ray LaHood calls the new standards a “significant win.” On Thursday, the President travelled to Holland, MI where he visited an advanced battery plant making the batteries that will be needed to power these vehicles of the future and talked about his goal to see more products that are made in America sold around the world.

Celebrating Ramadan: The ninth month of the Islamic calendar marks Ramadan, a holy month of prayer and fasting for Muslims around the world. On Thursday night, the President marked this occasion at an Iftar dinner with Muslim-American members of Congress and diplomatic corps, as well as Muslim-American families. According to the CIA World Fact Book, there are approximately 1.8 million Muslims in the United States. Watch President Obama’s speech.

Bright Ideas: Thomas Edison would be amazed. The conventional light bulb now has some serious competition. Philips Lighting North America has invented a revolutionary 10-watt light emitting diode (LED) bulb. Phillips is the first winner of the Energy Department’s Bright Tomorrow Lighting Prize(L Prize). The L Prize challenged the lighting industry to develop high performance, energy-saving replacements for conventional light bulbs that will save American consumers and businesses money.

Special Education: On Friday, the Department of Education announced more than $5 million in grants to 19 Parent Training and Information (PTI) Centers in 13 states and Puerto Rico. These centers will help parents understand their child’s disability early on and offer information on special education services and opportunities. For the full list of Education Department-funded special education parent information and training centers, visit www.parentcenternetwork.org

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Full Text US Economy in Crisis August 8, 2011: President Barack Obama’s Remarks to the Nation on S&P’s (Standard & Poor’s) Downgrade of the US Credit Rating from AAA to AA+ & Repercussions on the Economy

POLITICAL SPEECHES & DOCUMENTS

OBAMA PRESIDENCY & THE 112TH CONGRESS:

White House Photo, Samantha Appleton, 8/8/11

QUOTES

Remarks by the President

State Dining Room

1:52 P.M. EDT

THE PRESIDENT:  Good afternoon, everybody.  On Friday, we learned that the United States received a downgrade by one of the credit rating agencies — not so much because they doubt our ability to pay our debt if we make good decisions, but because after witnessing a month of wrangling over raising the debt ceiling, they doubted our political system’s ability to act.  The markets, on the other hand, continue to believe our credit status is AAA.  In fact, Warren Buffett, who knows a thing or two about good investments, said, “If there were a quadruple-A rating, I’d give the United States that.”  I, and most of the world’s investors, agree.

That doesn’t mean we don’t have a problem.  The fact is, we didn’t need a rating agency to tell us that we need a balanced, long-term approach to deficit reduction.  That was true last week.  That was true last year.  That was true the day I took office.  And we didn’t need a rating agency to tell us that the gridlock in Washington over the last several months has not been constructive, to say the least.  We knew from the outset that a prolonged debate over the debt ceiling — a debate where the threat of default was used as a bargaining chip — could do enormous damage to our economy and the world’s.  That threat, coming after a string of economic disruptions in Europe, Japan and the Middle East, has now roiled the markets and dampened consumer confidence and slowed the pace of recovery.

So all of this is a legitimate source of concern.  But here’s the good news:  Our problems are eminently solvable.*  And we know what we have to do to solve them.  With respect to debt, our problem is not confidence in our credit — the markets continue to reaffirm our credit as among the world’s safest.  Our challenge is the need to tackle our deficits over the long term.

Last week, we reached an agreement that will make historic cuts to defense and domestic spending.  But there’s not much further we can cut in either of those categories.  What we need to do now is combine those spending cuts with two additional steps:  tax reform that will ask those who can afford it to pay their fair share and modest adjustments to health care programs like Medicare.

Making these reforms doesn’t require any radical steps.  What it does require is common sense and compromise.  There are plenty of good ideas about how to achieve long-term deficit reduction that doesn’t hamper economic growth right now.  Republicans and Democrats on the bipartisan fiscal commission that I set up put forth good proposals.  Republicans and Democrats in the Senate’s Gang of Six came up with some good proposals.  John Boehner and I came up with some good proposals when we came close to agreeing on a grand bargain.

So it’s not a lack of plans or policies that’s the problem here.  It’s a lack of political will in Washington.  It’s the insistence on drawing lines in the sand, a refusal to put what’s best for the country ahead of self-interest or party or ideology.  And that’s what we need to change.

I realize that after what we just went through, there’s some skepticism that Republicans and Democrats on the so-called super committee, this joint committee that’s been set up, will be able to reach a compromise, but my hope is that Friday’s news will give us a renewed sense of urgency.  I intend to present my own recommendations over the coming weeks on how we should proceed.  And that committee will have this administration’s full cooperation.  And I assure you, we will stay on it until we get the job done.

Of course, as worrisome as the issues of debt and deficits may be, the most immediate concern of most Americans, and of concern to the marketplace as well, is the issue of jobs and the slow pace of recovery coming out of the worst recession in our lifetimes.

And the good news here is that by coming together to deal with the long-term debt challenge, we would have more room to implement key proposals that can get the economy to grow faster.  Specifically, we should extend the payroll tax cut as soon as possible, so that workers have more money in their paychecks next year and businesses have more customers next year.

We should continue to make sure that if you’re one of the millions of Americans who’s out there looking for a job, you can get the unemployment insurance that your tax dollars contributed to.  That will also put money in people’s pockets and more customers in stores.

In fact, if Congress fails to extend the payroll tax cut and the unemployment insurance benefits that I’ve called for, it could mean 1 million fewer jobs and half a percent less growth.  This is something we can do immediately, something we can do as soon as Congress gets back.

We should also help companies that want to repair our roads and bridges and airports, so that thousands of construction workers who’ve been without a job for the last few years can get a paycheck again.  That will also help to spur economic growth.

These aren’t Democratic proposals.  These aren’t big government proposals.  These are all ideas that traditionally Republicans have agreed to, have agreed to countless times in the past.  There’s no reason we shouldn’t act on them now.  None.

I know we’re going through a tough time right now.  We’ve been going through a tough time for the last two and a half years.  And I know a lot of people are worried about the future.  But here’s what I also know:  There will always be economic factors that we can’t control –- earthquakes, spikes in oil prices, slowdowns in other parts of the world.  But how we respond to those tests — that’s entirely up to us.

Markets will rise and fall, but this is the United States of America.  No matter what some agency may say, we’ve always been and always will be a AAA country.  For all of the challenges we face, we continue to have the best universities, some of the most productive workers, the most innovative companies, the most adventurous entrepreneurs on Earth.  What sets us apart is that we’ve always not just had the capacity, but also the will to act — the determination to shape our future; the willingness in our democracy to work out our differences in a sensible way and to move forward, not just for this generation but for the next generation.

And we’re going to need to summon that spirit today.  The American people have been through so much over the last few years, dealing with the worst recession, the biggest financial crisis since the 1930s, and they’ve done it with grace.  And they’re working so hard to raise their families, and all they ask is that we work just as hard, here in this town, to make their lives a little easier.  That’s not too much to ask.  And ultimately, the reason I am so hopeful about our future — the reason I have faith in these United States of America — is because of the American people.  It’s because of their perseverance, and their courage, and their willingness to shoulder the burdens we face -– together, as one nation.

One last thing.  There is no one who embodies the qualities I mentioned more than the men and women of the United States Armed Forces.  And this weekend, we lost 30 of them when their helicopter crashed during a mission in Afghanistan.  And their loss is a stark reminder of the risks that our men and women in uniform take every single day on behalf of their county.  Day after day, night after night, they carry out missions like this in the face of enemy fire and grave danger.  And in this mission –- as in so many others -– they were also joined by Afghan troops, seven of whom lost their lives as well.

So I’ve spoken to our generals in the field, as well as President Karzai.  And I know that our troops will continue the hard work of transitioning to a stronger Afghan government and ensuring that Afghanistan is not a safe haven for terrorists.  We will press on.  And we will succeed.

But now is also a time to reflect on those we lost, and the sacrifices of all who serve, as well as their families.  These men and women put their lives on the line for the values that bind us together as a nation.  They come from different places, and their backgrounds and beliefs reflect the rich diversity of America.

But no matter what differences they might have as individuals, they serve this nation as a team.  They meet their responsibilities together.  And some of them — like the 30 Americans who were lost this weekend –- give their lives for their country.  Our responsibility is to ensure that their legacy is an America that reflects their courage, their commitment, and their sense of common purpose.

Thank you very much.

END  2:03 P.M. EDT

 

President Obama on Common Sense Steps to Grow the Economy

Souce: WH, 8-8-11
Download Video: mp4 (100MB) | mp3 (10MB)

This afternoon, while speaking to the press from the State Dining Room, President Obama addressed the news from Friday that the United States received a downgrade by one of the credit rating agencies:

The fact is, we didn’t need a rating agency to tell us that we need a balanced, long-term approach to deficit reduction.  That was true last week.  That was true last year.  That was true the day I took office.  And we didn’t need a rating agency to tell us that the gridlock in Washington over the last several months has not been constructive, to say the least.  We knew from the outset that a prolonged debate over the debt ceiling — a debate where the threat of default was used as a bargaining chip — could do enormous damage to our economy and the world’s.  That threat, coming after a string of economic disruptions in Europe, Japan and the Middle East, has now roiled the markets and dampened consumer confidence and slowed the pace of recovery.

The President discussed the need to tackle our deficits over the long term through tax reform that asks those who can afford it to pay their fair share and modest adjustments to health care programs like Medicare. Though the issues of debt and deficits have dominated much of the recent conversation in Washington, the most immediate concern of most Americans is job creation and growing our economy. That is why President Obama laid out some common sense steps that can be taken right away to spur economic growth such as extending the payroll tax cut and unemployment insurance:

Specifically, we should extend the payroll tax cut as soon as possible, so that workers have more money in their paychecks next year and businesses have more customers next year.

We should continue to make sure that if you’re one of the millions of Americans who’s out there looking for a job, you can get the unemployment insurance that your tax dollars contributed to.  That will also put money in people’s pockets and more customers in stores.

In fact, if Congress fails to extend the payroll tax cut and the unemployment insurance benefits that I’ve called for, it could mean 1 million fewer jobs and half a percent less growth.  This is something we can do immediately, something we can do as soon as Congress gets back.

President Obama Delivers a Statement to the Press

President Barack Obama delivers a statement to the press in the State Dining Room of the White House, Aug. 8, 2011. (Official White House Photo by Chuck Kennedy)

Despite the economic hardship and challenges we face as a nation, the President is hopeful about our future:

No matter what some agency may say, we’ve always been and always will be a AAA country.  For all of the challenges we face, we continue to have the best universities, some of the most productive workers, the most innovative companies, the most adventurous entrepreneurs on Earth.  What sets us apart is that we’ve always not just had the capacity, but also the will to act — the determination to shape our future; the willingness in our democracy to work out our differences in a sensible way and to move forward, not just for this generation but for the next generation.

As the President said, there is no one who embodies these qualities of excellence more than our men and women in uniform. The President reflected on the 30 Americans who were lost in Afghanistan this weekend:

[N]ow is also a time to reflect on those we lost, and the sacrifices of all who serve, as well as their families.  These men and women put their lives on the line for the values that bind us together as a nation.  They come from different places, and their backgrounds and beliefs reflect the rich diversity of America.

But no matter what differences they might have as individuals, they serve this nation as a team.  They meet their responsibilities together.  And some of them — like the 30 Americans who were lost this weekend –- give their lives for their country.  Our responsibility is to ensure that their legacy is an America that reflects their courage, their commitment, and their sense of common purpose.

President Obama: Our Problems Are Eminently Solvable

Source: WH, 8-8-11

The President today outlined a series of steps Congress can take to quickly add momentum to our nation’s economic growth. Click on the links below to find out more about how each of these proposals can help propel our economy forward:

  • Extend the payroll tax cut so that middle class families have more money in their paychecks next year.  If you’ve got more money in your paycheck, you’re more likely to spend it, and that means businesses of all sizes will have more customers.  They’ll be in a better position to hire.

We also need to make sure that millions of workers who are still pounding the pavement looking for jobs to support their families are not denied needed unemployment benefits.

If Congress fails to extend the payroll tax and unemployment insurance it could mean one million fewer jobs and half a percent less growth.

  • Pass a bipartisan infrastructure bill. There are over a million construction workers out of work after the housing boom went bust, just as a lot of America needs rebuilding.  We can connect the two by helping private companies rebuild our roads and bridges and railways.
  • Pass the patent reform bill to give our entrepreneurs the chance to get their job-creating ideas to market faster by streamlining the patent process.
  • Pass the trade agreements that will help businesses sell more American-made goods and services to Asia and South America, supporting tens of thousands of jobs here at home.

Trade Adjustment Assistance Fact Sheet
South Korea Free Trade Agreement
Colombia Free Trade Agreement
Panama Free Trade Agreement

Political Buzz US Economy in Crisis August 7, 2011: Asian Markets Sink — Reactions to S&P, Standand & Poor’s Downgrade of US Credit Rating from AAA to AA+

POLITICAL BUZZ

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

OBAMA PRESIDENCY & THE 112TH CONGRESS:

THE HEADLINES….

 

G7 says committed to ensure liquidity, support markets: The Group of Seven nations is committed to taking coordinated action to ensure liquidity and to support financial market functioning, financial stability and economic growth, G7 finance ministers and central bank governors said in a statement…. – Reuters, 8-7-11

“These actions, together with continuing fiscal discipline efforts will enable long-term fiscal sustainability. No change in fundamentals warrants the recent financial tensions faced by Spain and Italy. We welcome the additional policy measures announced by Italy and Spain to strengthen fiscal discipline and underpin the recovery in economic activity and job creation.” — G7 Statement

“It takes awhile. Our concerns are centered on the political side and on the fiscal side. It would take a stabilization of the debt as a share of the economy and eventual decline, and it would take, I think, more ability to reach consensus in Washington than what we’re observing now.” — John B. Chambers, the managing director of Standard & Poor’s

“Raising taxes is what ‘balanced plan’ means, that is plain to every American by now. The administration wants to raise taxes so they can permanently implant a larger level of spending. They have increased domestic discretionary spending 24 percent in two years. This is unthinkable. So we’ve got a problem — we’ve got to bring that spending down, not increase the burden on the private sector.” — Senator Jeff Sessions of Alabama, the top Republican on the Senate Budget Committee

“One has to find understandable their pessimism about our inability to come together on the most important issue facing our country, which is how do we create jobs. We need a balanced approach and the extremism, the Tea Party obstructionism here in Washington, is keeping us from restoring that balanced approach America has always used of investing in the future, investing in job creation, and also being fiscally responsible at the same time.” — Gov. Martin O’Malley of Maryland, the chairman of the Democratic Governors Association on the ABC program “This Week”

“Republicans are having to respond to this very, very strident group that is pulling them away and believes that compromise is a dirty word. That is a prescription for failure.” — David Axelrod, Obama’s longtime political adviser on the CBS program “Face the Nation”

“The Tea Party hasn’t destroyed Washington — Washington was destroyed before the Tea Party got there. The hope is that the Tea Party and middle-of-the-road people can find common ground to turn this country around before we become Greece. I hope we can.”
“People are not creating jobs in this country because they think Howard Dean is going to raise their taxes. If you want to create jobs, don’t raise anyone’s taxes. Try to lower spending like the Tea Party and other people up here want.” — Senator Lindsey Graham, Republican of South Carolina

“I think the Standard & Poor’s downgrade is a good thing because I think it underlines the fact that you cannot get out of this without raising revenues. You cannot get out of this without raising revenues. It is impossible, and the vast majority of the American people want us to raise revenues — particularly on all those gazillionaires the Republican tax cuts mostly benefit.” — Howard Dean, the former Vermont governor and former chairman of the Democratic National Committee

“Clearly, I’m not very surprised by this downgrade. We more or less saw this coming because we’re on the wrong fiscal path. We’ll find out tomorrow what kind of spike in rates we’re going to get. But, obviously, not only does it hurt the federal government in its ability to close the deficits, but it hurts people. You know, car loans, home loans, all these things are going to go up. And so, it’s because Washington has not gotten its fiscal house in order. To me, this is more vindications of our action.” — Representative Paul D. Ryan of Wisconsin, the Republican chairman of the House Budget Committee on “Fox News Sunday”

“I think it’s really — it’ll sound strange for me to say it — an outrageous move. The government can pay its debts. It’s legally obligated to do so. It’s got the wherewithal to do it. In a larger sense about the economy, I think the U.S. economy is in a perilous state. This recovery has been the worst from a severe recession since the Great Depression, but I am surprised S.& P. would play politics. The U.S. government can pay the interest and principle on the bonds.” — Steve Forbes, the chief executive of the company that publishes Forbes magazine and a former Republican presidential candidate on the CNN program “State of the Nation”

Candidates Give Obama an F for AA+ Rating: The Republican presidential candidates on Saturday seized on the first-ever downgrade of the nation’s credit rating as a new line of criticism against President Obama, suggesting that ultimate responsibility rested in the Oval Office even though the rating agency, Standard & Poor’s, cited the overall political gridlock in Washington as a major cause for its decision…. – NYT, 8-6-11

“It happened on your watch, Mr. President. You were AWOL. You were missing in action…. I’m calling on the president of the United States to come back to the White House, address the American people before the markets open on Monday and give us his positive plan for putting the ratings back up to the AAA rating…. Last night, we had our day of reckoning. Eventually it hits the fan…. “The responsibility is of those in Washington, D.C., who put the deal together. But the real problem in all of this is that President Obama has failed to give leadership on this issue.” Michele Bachmann, the Minnesota representative and Tea Party caucus leader

“What we should be talking about is downgrading Barack Obama from president of the United States.” — Former Gov. Tim Pawlenty of Minnesota campaigned in Grinnell on Saturday

    • At a glance: The US credit downgrade: Markets around the world are set to react Monday to the downgrade of the U.S. credit rating Friday. A look at the downgrade, why it happened and what it means:
      WHAT HAPPENED:
      Credit rating agency Standard & Poor’s lowered the U.S. government’s credit rating for the first time Friday, from the top AAA rating to AA+. That affects long-term debt, which means government securities that have terms of more than one year.
      WHY THE DEBT WAS DOWNGRADED:
      S&P blamed political deadlock in Washington that threatens to keep the country from dealing effectively with its debt.
      WHAT IT MEANS FOR THE GOVERNMENT:
      In theory, a lower credit rating should lead to higher interest rates for U.S. debt. Buyers of government securities can demand higher rates because the lower rating means they are taking on more risk. In reality, Treasury bonds will still be considered among the safest and most liquid investments in the world, and any rise in rates is likely to be muted…. – AP, 8-7-11
    • Asian stock markets sink after US credit downgrade: Asian stocks nose-dived Monday as the first-ever downgrade of the U.S. government’s credit rating jolted the global financial system, reinforcing fears of a rapid slowdown in economic growth.
      Oil prices extended recent sharp losses, trading below $84 a barrel on expectations that weaker global growth will crimp demand for crude. The dollar was lower against the yen and the euro.
      Among the major Asian markets, Hong Kong’s Hang Seng tumbled 4 percent to 20,100.20 and South Korea’s Kospi crumpled 6.7 percent to 1,814.100. Japan’s Nikkei 225 stock average dropped 2.5 percent to 9,067.88.
      Futures pointed to losses on Wall Street when it opens Monday. Dow futures were off 258 points, or 2.3 percent, at 11,144 and broader S&P 500 futures shed 28.8 points, or 2.4 percent, to 1,169.00.
      “It’s not Armaggedon, but it feels like it,” said Hong Kong-based analyst Francis Lun, adding that he foresees the territory’s Hang Seng index to sink below 19,000 — a decline of a further 5 percent — before making any kind of comeback…. – AP, 8-8-11
    • Asian stocks slide after US debt downgrade: Asian stocks fell on Monday after last week’s historic downgrade of the United States’ credit rating, which compounded concerns over the world’s biggest economy as well as the global outlook.
      The falls were echoed by big losses in oil while gold surged to another record as investors moved out of risky assets…. – AP, 8-8-11
    • Geithner says he will stay at Treasury: Timothy Geithner has told President Barack Obama that he will remain on the job as Treasury secretary, ending speculation he would leave the administration…. – AP, 8-7-11
    • U.S. Stock Futures Fall on S&P Downgrade: U.S. stock futures declined, following the biggest weekly drop in the Standard & Poor’s 500 Index since 2008, amid concern that a downgrade of the nation’s credit rating by S&P may worsen an economic slowdown.
      S&P 500 futures expiring in September declined 2.1 percent to 1,172.3 at 7:03 a.m. in Tokyo. Dow Jones Industrial Average futures lost 253 points, or 2.2 percent, to 11,149.
      The downgrade threatens to extend a rout in U.S. stocks that wiped out $1.94 trillion in market value and erased the S&P 500’s gain for the year. S&P lowered the U.S. long-term rating one level to AA+ after markets closed on Aug. 5 while keeping the outlook at “negative” as the ratings company becomes less confident Congress will end Bush-era tax cuts or tackle entitlements…. – Businessweek, 8-7-11

“This is a problem that has to be addressed by the full spectrum of political parties. You’ve got a position here where the debt is on a rising share if you measure it against GDP. The plan that has been put forward and we think will be adopted gets you part of the way there but it doesn’t get you all the way there. And we don’t see in the next few years a consensus forming that will get you the rest of the way.” — John Chambers, chairman of Standard & Poor’s sovereign debt committee

  • S&P’s Chambers Says U.S. Debt Problems Need Bipartisan Solution: U.S. lawmakers need to come together as they did for a 1980s overhaul of Social Security and compromise on the medium-term consolidation of the country’s fiscal position, said John Chambers, chairman of Standard & Poor’s sovereign debt committee…. – Bloomberg, 8-7-11
  • G7 gives first sign ready to battle crisis: Political and financial leaders gave their first sign of readiness to battle a debt crisis gone global when the European Central Bank signaled on Sunday it would start buying Italian and Spanish debt, a critical move to quell a bond rout that has rocked financial markets.
    The European Central Bank decision would be aimed at calming markets grown increasingly doubtful about Europe’s ability to deal with its debt issues, a strikingly parallel concern to that which led ratings agency Standard & Poor’s to knock U.S. debt down from “risk free” AAA status to AA-plus.
    Meanwhile, finance chiefs from Group of Seven industrial nations were to confer by telephone late on Sunday– and possibly issue a statement afterward — to try to soothe anxious investors after a week in which $2.5 trillion of market value was wiped out…. – Reuters, 8-7-11
  • Dollar Weakens to Record Versus Franc as S&P Lowers U.S. Rating: The dollar dropped to a record low against the Swiss franc and fell for a second day versus the yen after Standard & Poor’s downgrade of the U.S. added to concern the fiscal health of the world’s biggest economy is slipping.
    The greenback weakened against the euro before the Federal Reserve meets tomorrow on monetary policy after S&P cut the U.S. one level on Aug. 5. The euro also advanced after the European Central Bank signaled it’s ready to start buying Italian and Spanish bonds to curb the region’s debt crisis. The yen gained against most major peers as Asian shares slid for a fifth day, supporting demand for Japan’s currency as a refuge…. – Bloomberg, 8-8-11
  • U.S. 10-Year Treasury Yield Retraces Decline: Benchmark 10-year U.S. Treasury bonds retraced early losses Monday to rise above Friday’s closing levels, despite the unprecedented downgrade by Standard & Poor’s of its rating on U.S. government debt.
    Analysts said a pledge early Monday from the Group of Seven industrialized nations to prevent market volatility, along with concerns about the euro-zone debt crisis and the possibility of a global economic downturn, was keeping demand for Treasurys strong…. – WSJ, 8-8-11
  • What the Move on U.S. Credit Means for Everyday Investors: The move by Standard & Poor’s to cut the U.S. credit rating to double-A-plus added more uncertainty to global markets already buffeted by concerns over debt crises and slowing economic growth. Here are answers to some of the most important questions facing investors…. – WSJ. 8-7-11
  • How to Get That AAA Rating Back: Reagan inherited economic problems and fixed them. Obama’s strategy is to blame Bush and Standard & Poor’s…. – WSJ, 8-7-11
  • S&P executive: 1 in 3 chance of future downgrade: A top political adviser to President Barack Obama blamed the downgrade of the U.S. credit rating on tea party Republicans, whom he said were unwilling to compromise on how to reduce the federal debt.
    Obama campaign strategist David Axelrod told CBS’ “Face the Nation” on Sunday that the decision by the Standard & Poor’s credit agency to downgrade the U.S. from AAA to AA+ for the first time was strongly influenced by weeks of standoff between Democrats and Republicans over the debt…. – AP, 8-7-11
  • Greenspan sees stock market drop after downgrade: Former Federal Reserve Chairman Alan Greenspan says he expects the stock market slide to continue in the wake of a decision by credit rating agency Standard & Poor’s to downgrade the U.S. credit rating.
    Appearing Sunday on NBC’s “Meet the Press,” Greenspan said markets will take time to bottom out and that he expects a negative reaction on Monday to the S&P action…. – AP, 8-7-11
  • Kerry, McCain say bipartisan work needed post-S&P downgrade, differ on who to blame: Two senators and former presidential candidates say Standard & Poor’s decision to downgrade the U.S. credit rating speaks to the need for more bipartisan compromise — but they also say the blame lay with the other party.
    John Kerry was the Democratic nominee for president in 2004, and John McCain was the Republican nominee in 2008.
    Appearing Sunday on NBC’s “Meet the Press,” Kerry called S&P’s decision a “tea party downgrade.” The Massachusetts Democrat says he believes that tea party supporters in the House are holding up progress.
    McCain says he too would like to see more cooperation, but the Arizona Republican says President Barack Obama is at fault. McCain says the president failed to lead and did not present a clear plan during the debt-ceiling debate…. – AP, 8-7-11

Full Text US Economy in Crisis August 6, 2011: Republican GOP Candidates React to S&P’s Downgrade of US Credit Rating from AAA to AA+

POLITICAL SPEECHES & DOCUMENTS

OBAMA PRESIDENCY & THE 112TH CONGRESS:

QUOTES

GOP candidates react to credit rating downgrade

Source: USA Today, 8-6-11
JON HUNTSMAN

“Out-of-control spending and a lack of leadership in Washington have resulted in President Obama presiding over the first downgrade of the United States credit rating in our history.

“For far too long we have let reckless government spending go unchecked and the cancerous debt afflicting our nation has spread.

“We need new leadership in Washington committed to fiscal responsibility, a balanced budget, and job-friendly policies to get America working again.”

MICHELE BACHMANN

“Tonight’s decision by S&P to downgrade our credit rating to AA+ is a historically significant and serious event for the United States. The United States has had a AAA credit rating since 1917.

“That rating has endured the great depression, World War II, Korea, Vietnam and the terrorist attacks on 9/11. This president has destroyed the credit rating of the United States through his failed economic policies and his inability to control government spending by raising the debt ceiling.

“We were warned by all of the credit agencies that a failure to deal with our debt would lead to a downgrade in our credit rating, but instead he submitted a budget that had a $1.5 trillion deficit and then requested a $2.4 trillion blank check. President Obama is destroying the foundations of the U.S. economy one beam at a time.

“I call on the president to seek the immediate resignation of Treasury Secretary Timothy Geithner and to submit a plan with list of cuts to balance the budget this year, turn our economy around and put Americans back to work.”

NEWT GINGRICH

“The Obama disaster continues,” he said in a Twitter message at 8:54 p.m. “Highest food stamp level and lowest credit rating in history in the same 24 hours.”

MITT ROMNEY

“America’s creditworthiness just became the latest casualty in President Obama’s failed record of leadership on the economy.

“Standard & Poor’s rating downgrade is a deeply troubling indicator of our country’s decline under President Obama.

“His failed policies have led to high unemployment, skyrocketing deficits, and now, the unprecedented loss of our nation’s prized AAA credit rating. Today, President Obama promised that ‘things will get better.’

“But it has become increasingly clear that the only way things will get better is with new leadership in the White House.”

HERMAN CAIN

“On Tuesday, April 19, 2011, Treasury Secretary Tim Geithner promised that America faced ‘no risk’ of a credit downgrading. Less than six months later, he is proven shamefully wrong. As I have feared for months, the S&P has chosen to downgrade America’s credit rating from AAA, which we have always enjoyed, to AA+.

“Perhaps this is because the Obama Administration and Congressional Democrats never once demonstrated a willingness to propose its own ideas for meaningful spending cuts, something credit agencies signaled were necessary to redeem America’s financial standing in the world.

“As a corporate executive, I’ve rescued companies from the brink of bankruptcy and returned them to profitability. That involved balancing budgets or even creating them in the first place, something that the Democratic leadership in Congress hasn’t done for 828 days. If I couldn’t run companies without budgets, how can the government?

“I also had to make tough budgetary cuts to save companies. Leadership is about doing what’s right, even when it’s difficult. But somehow, that sort of idea was never floated among those within the Obama Administration.

“Now, Americans are fearful for their retirements and for their children’s educational savings. This is a country known for dreamers and innovators, for thinkers and doers. And now, we are a nation living in fear.

“This is a sad day for America. Such a rating is unfitting of the greatest and most prosperous nation the world has ever known. And such a weak leader is, as well.”

RON PAUL

“We have just learned that for the first time in our history, the United States’ top credit rating has been downgraded by credit rating agency S&P.

“We were told by proponents of increasing the debt ceiling that a credit downgrade would come if we didn’t raise the limit, but the opposite was true.

“The ratings agencies had been warning us for some time that it is imperative upon the U.S. government to get its fiscal house in order and tackle its debt and deficit problem by taking serious steps.

“Unfortunately, the game in Washington has been one of partisan blaming and bipartisan out-of-control spending.

“America has been dealing with this severe economic crisis for years because the Washington establishment failed to focus on the true issues at hand: a declining dollar and out-of-control spending.

“Last November, millions of frustrated Americans let it be known that they wanted our debt crisis solved and our spending problem to end. They sent a group of new lawmakers to Washington to end business as usual.

“But the old crowd of elites still refuses to budge on doing everything it takes to get us out of this hole they’ve dug. Instead of real substantial budget cuts, we get minor or ‘fake’ cuts and budget tricks that may or may not happen far off into the future. We get a Congress that abdicates its responsibility to an unconstitutional ‘Super Congress’ with the power to make things worse than they already are.

“The American people realize that our nation can no longer afford to stay on this same path of reckless spending and follow the status quo of Washington. They will not tolerate any further ineffective stimulus schemes that do nothing to help our economy and actually do the opposite to the tune of trillions of dollars in money being spent and printed, and millions of people remaining unemployed and without much economic stability or security.

“If Washington refuses to take heed, there is little cause for optimism.

“Growing inflation, rising gasoline and food prices, and trillion-dollar budget deficits will all soon seem like minor issues if our nation does not immediately change our monetary and spending policies.

“We must take bold actions to reduce out-of-control government spending, and get the federal government out of the way of small business and entrepreneurs so that they can start hiring again.

“If elected President, I pledge to veto any unbalanced budget and to balance the federal budget in the first year of my term. I will fight to reduce taxes and remove unconstitutional regulations so that businesses can hire, Americans can get back to work, and our economy can truly recover.”

RICK SANTORUM

“If this downgrade holds, then it’s another example in a long line of examples of the President’s failure of leadership. Is anyone surprised at this point? There are 14 million people out of work and looking to the White House for answers – but they are receiving nothing but a blank stare.

“The markets are scared and the credit downgrade has happened because the President and this Congress continue to address the symptoms and not the disease.

“This nation is spending more money than it takes in and the world knows it – now, it’s time to show the world that the United States has the fortitude and resolve to pass a Balanced Budget Amendment to stop out of control spending and shrink the scope of government once and for all. The deal the President cut with Congress was supposed to avoid this downgrade but all it did was once again kick the can down the road.

“President Obama and his Administration have been a failure.

“I understand the US Treasury is going back to Standard and Poors to say that a two trillion dollar mathematical error by S&P contributed to the downgrade. So, in addition to blaming President Bush for all of its problems, now the White House is blaming S&P – but this happened on the President’s watch – and he has to deal with it. I guess President Obama is left to cling to the ‘hope’ that a mathematical error caused this. Is that the “hope” the President was talking about?

“Folks, an AA rating should be so far in our rear view mirror that no mathematical error should affect it.

“Tonight, I’m saddened for the millions out of work – but I’m hopeful that I will replace Barack Obama as President and get this country and its economy moving again.”

TIM PAWLENTY

“This is a sad moment for the United States, but it’s a reflection that our country is in trouble. President Obama is inept when it comes to creating the conditions or job creation and economic growth. It’s time for a new direction and a new President.”

“The S&P downgrade blemishes our free Republic’s revolutionary experiment in liberty and self-government; consequently, it heartens tyrants and terrorists.

THADDEUS MCCOTTER

“We must reject recriminations, and unite to squarely face and fully conquer the fiscal challenge that threatens our prosperity and security.

“For as this downgrade underscores, only by restructuring big government into citizen-government will we keep our nation the world’s leading economy and affirm American exceptionalism throughout the 21st Century.”

Political Buzz US Economy in Crisis, August 6, 2011: S&P (Standard & Poor’s) Downgrades United States Credit Rating from Coveted AAA to AA+ Friday After Debt Bill & Repeated Warnings — US has Maintained AAA Rating since 1917

POLITICAL BUZZ

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

OBAMA PRESIDENCY & THE 112TH CONGRESS:

S&P rating downgrade

These 15 countries (and the Isle of Man) have the world’s highest credit rating, AAA from both Moody’s and Standard & Poor’s. The U.S. lost that high standing Friday, when S&P downgraded it to a AA+ rating. (Note: New Zealand has also been downgraded from AAA to AA)

THE HEADLINES….

S&P downgrades U.S. credit rating: The United States credit rating was downgraded for the first time Friday night, after a bipartisan debt deal signed into law this week failed to assuage concerns about the nation’s growing spending, according to a person familiar with the matter.
Standard & Poor’s said it was reducing the U.S. credit rating from AAA to AA for the first time since it began assigning grades to countries in 1941. The credit rating agency warned several times this year that unless the government took steps to tame its debt, it could face a downgrade.

U.S. Long-Term Debt Downgraded by Standard & Poor’s: Standard & Poor’s removed the United States government from its list of risk-free borrowers on Friday night, citing concern about the rising burden of long-term federal debt.
The ratings agency had threatened the downgrade if the government did not act to reduce the federal debt by at least $4 trillion over the next decade. Earlier this week, Congress instead passed a plan to reduce the debt by at least $2.1 trillion.
Two other ratings agencies, Moody’s and Fitch, both have said that they have no immediate plan to downgrade the country’s credit rating, giving the government more time to make progress on debt reduction. The split verdict limits the impact of the S.&P. downgrade as many consequences would only be triggered by a reduction by at least two agencies.

“The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.” — S&P

“The political brinkmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.”… – S&P

“The dysfunctional status of Washington has resulted in the first ever downgrade of the credit rating of the United States’ debt by Standard and Poor’s. Only time will tell whether this will have an adverse effect on prevailing interest rates paid on new U.S debt. If it does, it will only serve to compound our current economic challenges and longer-term fiscal outlook.” — Former Comptroller General David Walker.

“The action by S&P reaffirms the need for a balanced approach to deficit reduction that combines spending cuts with revenue-raising measures like closing taxpayer-funded giveaways to billionaires, oil companies and corporate jet owners. This makes the work of the joint committee all the more important, and shows why leaders should appoint members who will approach the committee’s work with an open mind — instead of hardliners who have already ruled out the balanced approach that the markets and rating agencies like S&P are demanding.” — Senate Majority Leader Harry Reid.

“This is a wake-up call for Washington to get serious about fixing our debt problem. Many of us have long argued that Congress must make the hard choices to address this issue immediately, and I can only hope this helps others in Washington and around the country understand our urgency. Substantial, meaningful reform that results in a pro-growth tax system, entitlement reforms and spending reductions must be implemented as soon as possible.” — Republican Sen. Chris Chambliss of Georgia.

“The deal Congress just passed over conservative objections has already had its obvious effect, the loss of America’s credibility around the world. The deal was not a serious attempt to solve our spending and debt problem, it was a political solution meant to kick the can down the road. The only real solution to our spending and debt crisis was Cut, Cap & Balance that the president rejected out of hand.” — Republican Sen. Jim DeMint of South Carolina.

“As S&P stated, ‘The transparency and accountability of institutions bear directly on sovereign creditworthiness because they reinforce the stability and predictability both of political institutions and the political framework.’ The American people are watching to see if the bipartisan Joint Committee will develop a plan to responsibly reduce the deficit in a balanced way while promoting economic growth and creating jobs.” — House Democratic leader Nancy Pelosi.

“Tonight’s decision by S&P to downgrade our credit rating to AA+ is a historically significant and serious event for the United States. The United States has had a AAA credit rating since 1917. That rating has endured the great depression, World War II, Korea, Vietnam and the terrorist attacks on 9/11. This president has destroyed the credit rating of the United States through his failed economic policies and his inability to control government spending by raising the debt ceiling.” — GOP presidential candidate Michelle Bachmann, a Minnesota congresswoman.

“America’s creditworthiness just became the latest casualty in President Obama’s failed record of leadership on the economy. Standard & Poor’s rating downgrade is a deeply troubling indicator of our country’s decline under President Obama. His failed policies have led to high unemployment, skyrocketing deficits, and now, the unprecedented loss of our nation’s prized AAA credit rating.” — GOP presidential candidate Mitt Romney, former Massachusetts governor.

    • GOP candidates react to credit rating downgrade: Standard & Poor’s, a major investment consulting agency, downgraded the United States from its top status on Friday night, saying that the dependability of US policy making had reached a significant low. … – USA Today, 7-29-11

AAA to AA+: Here come the battery jokes! — CNN Money, 8-6-11

“They’ve changed the US from AAA to AA. All this time and they didn’t realise they were using the wrong batteries.”…
“Until today I didn’t even know America ran on batteries, never mind what size.”…
“Until today I didn’t even know America ran on batteries, never mind what size.”…
“Caught a just downgraded AA+ 11-inch Maine bass. Gotta cross to Canada across lake for AAA fish!” — Economist Nouriel Roubini

    • Ouch! U.S. booted from Triple-A debt club CNN Money, 8-6-11
    • Barack Obama under fire as blame game follows US credit downgrade: Left and right turn on president, raising questions over his chances of winning the White House again… – Guardian, UK, 8-6-11
    • S&P downgrades US credit rating from AAA: The United States has lost its coveted top AAA credit rating. Credit rating agency Standard & Poor’s on Friday downgraded the nation’s rating for the first time since the U.S. won the top ranking in 1917. The move came after Congress haggled over budget cuts and the nation’s borrowing limit — and failed to cut enough government spending to satisfy S&P. The issue has contributed to convulsions in financial markets.
      The drop in the rating by one notch to AA-plus was expected. The three main credit agencies, which also include Moody’s Investor Service and Fitch, had warned during the budget fight that if Congress did not cut spending far enough, the country faced a downgrade. S&P said that it is making the move because the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilize the country’s debt situation. Moody’s said Friday it was keeping its AAA rating on the nation’s debt, but that it might still lower it…. – AP, 8-5-11
    • U.S. sources: S&P focused too much on debt-limit politics: Standard & Poor’s focused too much on the messy political process leading to a debt-limit hike and made a $2-trillion error in its calculations about U.S. finances, sources familiar with the discussions claimed on Friday night.
      The error was centered in the ratings agency’s estimates of discretionary spending and was pointed out by Treasury and it raised questions about S&P’s credibility, the sources said…. – Reuters, 8-5-11
    • S& P’s Analysis Was Flawed by $2 Trillion Error, Treasury Says: The Standard & Poor’s decision to downgrade the U.S. credit rating was flawed by a $2 trillion error, according to a Treasury Department spokesman.
      S& P lowered the nation’s AAA credit rating one level to AA+ yesterday, after warning on July 14 that it would reduce the ranking in the absence of a “credible” plan to lower deficits even if the nation’s $14.3 trillion debt limit were lifted. The outlook was kept as “negative.”
      The ratings company said that the deficit-cutting plan signed by President Barack Obama this week after months of wrangling with Congress falls short of what “would be necessary to stabilize the government’s medium-term debt dynamics.”
      The Treasury disagreed with S& P’s assessment and judged the analysis was carried out hastily, said a person familiar with the matter who declined to be identified because the discussions were private.
      The ratings firm erred in estimating discretionary spending levels at $2 trillion higher than what the Congressional Budget Office estimates, the person said…. – Bloomberg, 8-5-11
    • Obama briefed on S&P downgrade before leaving White House: President Barack Obama was briefed in advance on Friday on Standard & Poor’s intention to downgrade the United States’ top-notch AAA credit rating and has continued receiving updates from top aides, an administration official said.
      Obama left the White House for the Camp David presidential retreat outside Washington in late afternoon just hours before S&P’s announcement. “He was briefed before he left for Camp David and has been receiving updates through the night,” the official said…. – Reuters, 8-6-11
    • US loses AAA rating for first time: Standard & Poor’s has cut the US credit rating for the first time in history, saying the country’s politicians are increasingly unable to come to grips with its massive fiscal deficit and debt load.
      S&P cut the US rating from its top-flight triple-A one notch to AA+, and added a negative outlook to it, saying there was a chance it could be downgraded again within two years if progress is not made cutting the huge government budget gap. amp; It was the first time the US was downgraded since it received an AAA rating from Moody’s in 1917; it has held the S&P rating since 1941…. – AFP, 8-5-11
    • S&P Strips U.S. of Top Credit Rating: Unprecedented Downgrade Comes After Last-Minute Standoff; Treasury Says Decision Is ‘Flawed by a $2 Trillion Error’
      A cornerstone of the global financial system was shaken Friday when officials at ratings firm Standard & Poor’s said U.S. Treasury debt no longer deserved to be considered among the safest investments in the world.
      S&P removed for the first time the triple-A rating the U.S. has held for 70 years, saying the budget deal recently brokered in Washington didn’t do enough to address the gloomy long-term picture for America’s finances. It downgraded U.S. debt to AA+, a score that ranks below Liechtenstein and more than a dozen other countries, and on par with Belgium and New Zealand.
      The unprecedented move came after several hours of high-stakes drama. It began in the morning, when word leaked that a downgrade was imminent and stocks tumbled. Around 1:30 p.m., S&P officials notified the Treasury Department that they planned to downgrade U.S. debt and presented the government with their findings. Treasury officials noticed a $2 trillion error in S&P’s math that delayed an announcement for several hours. S&P officials decided to move ahead anyway, and after 8 p.m. they made their downgrade official…. – WSJ, 8-5-11
    • S& P downgrades U.S. credit rating for first time: Standard & Poor’s announced Friday night that it has downgraded the United States credit rating for the first time, dealing a huge symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.
      Lowering the nation’s rating one-notch below AAA, the credit rating company said “political brinkmanship” in the debate over the debt had made the U.S. government’s ability to manage its finances “less stable, less effective and less predictable.” It said the bi-partisan agreement reached this week to find $2.1 trillion in budget savings “fell short” of what was necessary to tame the nation’s debt over time and predicted that leaders would have no luck achieving more savings later on.
      The decision came after a day of furious back-and-forth between the Obama administration and S&P. Government officials fought back hard, arguing that S&P made a flawed analysis of the potential for political agreement and had mathematical errors in its initial analysis, which was submitted to the Treasury earlier in the day. The analysis overstated the U.S. deficit over 10 years by $2 trillion. “A judgment flawed by a $2 trillion error speaks for itself,” a Treasury spokesperson said Friday…. – WaPo, 8-5-11
    • S&P Cuts US Credit Rating For First Time In Modern History: Standard & Poor’s took the unprecedented step of downgrading the U.S. government’s “AAA” sovereign credit rating Friday in a move that could send shock waves through global financial markets and potentially undermine world economic growth.
      In a press release, S&P, cut its top-notch long-term credit rating for the U.S. Treasury’s debt to AA+ with a negative outlook. It is the first time in modern history that one of the three main ratings firms has stripped the U.S. of its coveted AAA rating.
      S&P warned last month that if the U.S. government didn’t approve a credible medium-term plan to shrink its fiscal shortfall, it would downgrade the rating even if Congress approved a debt deal that raised the Treasury’s borrowing limit. On Tuesday, just in time for a deadline to avoid default, U.S. lawmakers passed a bill increasing the U.S. debt ceiling by $2.1 trillion. However, the amount of planned quid- pro-quo deficit cuts ran to $2.4 trillion, well short of the $4 trillion that S&P had suggested was needed to put the nation’s fiscal house in order.
      Some market participants have warned that the tepid pace of economic recovery means that even deeper fiscal cuts may be needed to reduce the share of public debt to U.S. gross domestic product, a closely watched gauge of a nation’s fiscal health…. – WSJ, 8-5-11
    • S&P downgrades U.S. credit rating: The agency says the level of cuts in the debt ceiling compromise ‘falls short’ and that intense partisanship in Washington hurts prospects for a solution.
      Standard & Poor’s downgraded the U.S. government’s credit rating Friday for the first time in history, saying the recent plan worked out to raise the federal debt ceiling “falls short” of what’s needed to stabilize the nation’s longer-term finances.
      The credit rating agency also said the partisan stalemate that put the U.S. on the brink of default this week did not bode well for efforts to reduce the nation’s soaring debt…. – LAT, 8-6-11

“On one hand, there is a case to be made that the madness of the right has made America a fundamentally unsound nation. And yes, it is the madness of the right: if not for the extremism of anti-tax Republicans, we would have no trouble reaching an agreement that would ensure long-run solvency,” he said, referring to protracted negotiations on the US debt ceiling in which conservative Republicans insisted on deep budget cuts.
“it’s hard to think of anyone less qualified to pass judgment on America than the rating agencies. The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy? Really?” — Liberal economist Paul Krugman, a Nobel Prize winner, in the New York Times

    • US media concerned over rating downgrade: US commentators have expressed concern on Standard & Poor’s decision to cut the US credit rating, with some blaming the setback on conservative Republicans…. – AP, 8-6-11

“No risk,” Timothy Geithner told Fox Business at the time. When asked whether S&P was wrong and that the U.S. would keep its top credit rating, Geithner said, “Absolutely”

    • Republicans Want Geithner to Walk The Plank After Credit Downgrade: With the U.S. losing its Triple-A credit rating for the first time ever, Republican lawmakers and presidential contenders are calling on President Obama to fire Treasury Secretary Timothy Geithner. Fox News, 8-6-11
    • After Downgrade, Debt Panel May Be Congress’s First Test: Friday’s downgrade of U.S. government debt raises pressure on a special “super committee” that lawmakers formed this week to try—once again—to reach a far-reaching budget deal. How Washington’s political culture responds to that charge could be one of the more important repercussions of the downgrade, outside the reactions of financial markets. And the special debt committee stands as the capital’s first test: Will lawmakers and the administration redouble their efforts to reach a broad budget-cutting deal or again descend into squabbles?… – WSJ, 8-6-11
    • S&P downgrade of US credit rating sends clear message to Congress: shape up: S&P, one of the three major credit-rating firms, downgraded its rating for US debt Friday night – a move that has the potential to further sppok global markets and drive up borrowing costs in the US. The reason for the downgrade, S&P said, was congressional dysfunction…. – CS Monitor, 8-6-11

“Americans expect to be No. 1 at everything… a great insult and humiliating to the country…. If this brings rising interest rates on credit cards and mortgages, it is going to send a political shockwave throughout the system, and there will definitely be a ‘throw-the-bums-out’ mentality.” — Republican strategist Ron Bonjean.

“Most people understand the inability to satisfy the bond-ratings agencies was not Obama’s alone… Congress gets much more than half of the blame for this. Blame generally falls on the president when something like this happens.” — Ross Baker, a political scientist at Rutgers University in New Brunswick, New Jersey

  • S&P Downgrade May Cloud Obama Re-Election Bid Even as It Damages Congress: The downgrade of the U.S.’s AAA credit rating by Standard &’ Poor’s darkens President Barack Obama’s re-election chances while also damaging members of Congress from both parties as they prepare for the 2012 campaign, political analysts said.
    With Obama’s job-approval rating at 48 percent and an all- time high of 82 percent of Americans giving Congress negative marks in a New York Times/CBS News Poll taken this week, the downgrade will hurt the president and lawmakers by fueling economic uncertainty, possibly raising interest rates and wounding national pride, analysts said.
    S&P’s move deals a blow to Obama’s political standing by giving Republican presidential candidates the chance to attack him for being the first U.S. president to preside over a downgrade, said Ross Baker, a political scientist at Rutgers University in New Brunswick, New Jersey…. Bloomberg, 8-6-11
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