If S&P Downgrades America's Credit Rating, Which Political Party Will Americans Blame

[Seawytch]

The polls have already indicated who is going to get the majority of the blame for this.

Seventy-two percent of Americans disapprove of the way Republicans in Congress handled the debt ceiling negotiations, and 66 percent disapprove of the way Democrats handled them.

New York Times and CBS News Poll

 

[Neotrotsky]

Using that system of Measuring

The polls on Papa Obama must indicate he will get the lion share of blame

 

[saveliberty]

The polls have already indicated who is going to get the majority of the blame for this.

Seventy-two percent of Americans disapprove of the way Republicans in Congress handled the debt ceiling negotiations, and 66 percent disapprove of the way Democrats handled them.

New York Times and CBS News Poll

You confuse how something was done with what was done. The results of the negoiations will hurt Democrats for a long time to come. Standard and Poors was specific to spending cuts NOT BEING LARGE ENOUGH. Democrats are most resistant to that line of thinking.

 

[J.E.D]

Since the reasoning for the downgrade was not enough cuts in spending, the Democrats look like villians here.

Oh, and they already issued a warning about another downgrade if the current agreement is not followed or the economy gets worse.

It really is a no win for Democrats. Making the real cuts needed will not go over with the party loyal. Failure to cut will cause obvious and far reaching economic problems they will have to take responsibility for causing.

Nice try, my little partisan friend. John Chambers, Head of sovereign ratings, S&P, was on Anderson Cooper last night. He clearly blames both parties for the the fiscal situation that the US is in. He also points to the debacle over raising the debt ceiling, which, according to polls, Americans blame the GOP for more than Dems. He also singles out the Bush tax cuts. Read it and weep.

CNN.com - Transcripts

JOHN CHAMBERS, HEAD OF SOVEREIGN RATINGS, STANDARD & POOR'S: Well, thanks for having me.

COOPER: Why did S&P downgrade the United States' credit rating today?

CHAMBERS: Well, I think there were two reasons.

The first reason is the one that you have outlined, being our view of the political settings in the United States have been altered. We have taken them down a notch, the rating down a notch. The political brinkmanship we saw over raising the debt ceiling was something that was really beyond our expectations, the U.S. government getting to the last day before they had cash management problems.

There are very few governments that separate the budget process from the debt authorization process. And we also think more broadly that this debate has shown that although we do have an agreement that will and we do believe will deliver at least $2.1 trillion of savings over the next decade, it is going to be difficult to get beyond that at least in the near term. And you do need to get beyond that to get to a point where the debt-to-GDP ratio is going to stabilize.

COOPER: So it's interesting. You're saying without a doubt, the recent debate, the recent roadblocks in Congress, the tenor, the timing, the tone of the debate had a major impact on this.

CHAMBERS: Yes.

I think that's what put things over the brink. In addition, we have a medium-term fiscal forecast that we see, you know, the debt-to- GDP ratio continuing to rise over the forecast horizon, and putting it in a position where it would no longer be compatible with many other AAA ratings.

COOPER: Already on Twitter, other places, Republicans and Democrats are pointing their fingers at each other, at President Obama, at Congress. Do you blame one side more than the other?

CHAMBERS: No, I think that there's plenty of blame to go around.

This is a problem that's been a long time in the making, well over this administration and the prior administration. It's a matter of the medium- and long-term budget position of the United States that needs to be brought under control, not the immediate fiscal position. It's one that centers on entitlements and it's entitlement reform or having matching revenues to pay for those entitlements that's at the crux of the matter.

COOPER: What could the United States have done to have avoided this?

CHAMBERS: Well, I think it could have done a few things. The first thing it could have done is to have raised the debt ceiling in a timely matter, so that much of this debate had been avoided to begin with, as it had done 60 or 70 times since 1960 without much debate.

So that's point number one. And point number two is it could have come up with a fiscal plan similar, for example, to the Bowles- Simpson commission, which was bipartisan. Although it did not have a supermajority vote, it did have a majority vote and came up with a number of sensible recommendations.

You could envision other recommendations, but that would have been a start.

COOPER: I want to bring in two folks who are a lot smarter than I am on these subjects, Ali Velshi and also David Walker, the former comptroller of the United States.

I know they would like to just ask you a couple of questions.

CHAMBERS: Sure.

COOPER: David, let's start with you.

DAVID WALKER, FORMER UNITED STATES COMPTROLLER GENERAL: John, thanks for coming on.

First, obviously, S&P said back in April that you were looking for something meaningful to happen and up to $4 trillion in deficit reduction over the next 10 years. That didn't happen. You know, what are you looking for with regard to this new super committee that is being established?

If they were to come up with $3 trillion in additional deficit reduction over the next 10 years that would get to the $4 trillion target that you were talking about back in April, might that do it as far as being able to regain AAA status?

CHAMBERS: Well, it's going to take a lot to get back to AAA, because once you lose your AAA, it doesn't usually bounce back in that way.

But I think a key debate will be coming up regarding the extension of the 2001 and 2003 tax cuts, because if you did let them lapse for the high-income earners, that could give you another $950 billion. I think the question there is, A., would that be on top of we have already achieved with the $2.1 trillion, or would that -- if it was agreeable, which is a big if, you could envision that being counted toward the $1.5 trillion that the congressional committee is looking to achieve.

 

[BDBoop]

Since the reasoning for the downgrade was not enough cuts in spending, the Democrats look like villians here.

Oh, and they already issued a warning about another downgrade if the current agreement is not followed or the economy gets worse.

It really is a no win for Democrats. Making the real cuts needed will not go over with the party loyal. Failure to cut will cause obvious and far reaching economic problems they will have to take responsibility for causing.

Nice try, my little partisan friend. John Chambers, Head of sovereign ratings, S&P, was on Anderson Cooper last night. He clearly blames both parties for the the fiscal situation that the US is in. He also points to the debacle over raising the debt ceiling, which, according to polls, Americans blame the GOP for more than Dems. He also singles out the Bush tax cuts. Read it and weep.

CNN.com - Transcripts

JOHN CHAMBERS, HEAD OF SOVEREIGN RATINGS, STANDARD & POOR'S: Well, thanks for having me.

COOPER: Why did S&P downgrade the United States' credit rating today?

CHAMBERS: Well, I think there were two reasons.

The first reason is the one that you have outlined, being our view of the political settings in the United States have been altered. We have taken them down a notch, the rating down a notch. The political brinkmanship we saw over raising the debt ceiling was something that was really beyond our expectations, the U.S. government getting to the last day before they had cash management problems.

There are very few governments that separate the budget process from the debt authorization process. And we also think more broadly that this debate has shown that although we do have an agreement that will and we do believe will deliver at least $2.1 trillion of savings over the next decade, it is going to be difficult to get beyond that at least in the near term. And you do need to get beyond that to get to a point where the debt-to-GDP ratio is going to stabilize.

COOPER: So it's interesting. You're saying without a doubt, the recent debate, the recent roadblocks in Congress, the tenor, the timing, the tone of the debate had a major impact on this.

CHAMBERS: Yes.

I think that's what put things over the brink. In addition, we have a medium-term fiscal forecast that we see, you know, the debt-to- GDP ratio continuing to rise over the forecast horizon, and putting it in a position where it would no longer be compatible with many other AAA ratings.

COOPER: Already on Twitter, other places, Republicans and Democrats are pointing their fingers at each other, at President Obama, at Congress. Do you blame one side more than the other?

CHAMBERS: No, I think that there's plenty of blame to go around.

This is a problem that's been a long time in the making, well over this administration and the prior administration. It's a matter of the medium- and long-term budget position of the United States that needs to be brought under control, not the immediate fiscal position. It's one that centers on entitlements and it's entitlement reform or having matching revenues to pay for those entitlements that's at the crux of the matter.

COOPER: What could the United States have done to have avoided this?

CHAMBERS: Well, I think it could have done a few things. The first thing it could have done is to have raised the debt ceiling in a timely matter, so that much of this debate had been avoided to begin with, as it had done 60 or 70 times since 1960 without much debate.

So that's point number one. And point number two is it could have come up with a fiscal plan similar, for example, to the Bowles- Simpson commission, which was bipartisan. Although it did not have a supermajority vote, it did have a majority vote and came up with a number of sensible recommendations.

You could envision other recommendations, but that would have been a start.

COOPER: I want to bring in two folks who are a lot smarter than I am on these subjects, Ali Velshi and also David Walker, the former comptroller of the United States.

I know they would like to just ask you a couple of questions.

CHAMBERS: Sure.

COOPER: David, let's start with you.

DAVID WALKER, FORMER UNITED STATES COMPTROLLER GENERAL: John, thanks for coming on.

First, obviously, S&P said back in April that you were looking for something meaningful to happen and up to $4 trillion in deficit reduction over the next 10 years. That didn't happen. You know, what are you looking for with regard to this new super committee that is being established?

If they were to come up with $3 trillion in additional deficit reduction over the next 10 years that would get to the $4 trillion target that you were talking about back in April, might that do it as far as being able to regain AAA status?

CHAMBERS: Well, it's going to take a lot to get back to AAA, because once you lose your AAA, it doesn't usually bounce back in that way.

But I think a key debate will be coming up regarding the extension of the 2001 and 2003 tax cuts, because if you did let them lapse for the high-income earners, that could give you another $950 billion. I think the question there is, A., would that be on top of we have already achieved with the $2.1 trillion, or would that -- if it was agreeable, which is a big if, you could envision that being counted toward the $1.5 trillion that the congressional committee is looking to achieve.

Many thanks, I can think of a few boards that can use this particular wake up call.

 

[J.E.D]

Many thanks, I can think of a few boards that can use this particular wake up call.

I also posted this transcript on the merged downgrade thread. Not that the neocons will acknowledge their role in S&P's decision to downgrade the US.

 

[Leweman]

Why isnt both an option? It should be the only one.

 

[Bfgrn]

Well, let's HEAR what S&P said to explain the downgrade:

Some excerpts from the release:

[...]The political brinksmanship 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.

[...]It appears that for now, new revenues have dropped down on the menu of policy options.

[...]The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.

[...]Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.

Standard & Poors indicates that they could improve their rating for the U.S. if “the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating.”ref

 

[Oddball]

Well, let's HEAR what S&P said to explain the downgrade:

Some excerpts from the release:

[...]The political brinksmanship 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.

[...]It appears that for now, new revenues have dropped down on the menu of policy options.

[...]The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.

[...]Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.

Standard & Poors indicates that they could improve their rating for the U.S. if “the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating.”ref

IOW, S&P is pimping for the DNC and Boiking....Right down to the latest cheap semantic weasel word for "raise taxes":

"Revenues".

Glad we got that all cleared up.

 

[Bfgrn]

Well, let's HEAR what S&P said to explain the downgrade:

Some excerpts from the release:

[...]The political brinksmanship 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.

[...]It appears that for now, new revenues have dropped down on the menu of policy options.

[...]The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.

[...]Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.

Standard & Poors indicates that they could improve their rating for the U.S. if “the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating.”ref

IOW, S&P is pimping for the DNC and Boiking....Right down to the latest cheap semantic weasel word for "raise taxes":

"Revenues".

Glad we got that all cleared up.

Oh good, we have finally found a new avatar for you Jethro...

WHAT S&P is saying is that the CBO's debt projection has now taken the path of the Alternative Fiscal Scenario, which is extending the Bush tax cuts, repeal or undermining of the cost cutting measures in the Affordable Healthcare Act and more Republican corporate ass licking.

CBO’s Analysis

The Extended-Baseline Scenario. Under this scenario, the expiration of the tax cuts enacted since 2001 and most recently extended in 2010, the growing reach of the alternative minimum tax, the tax provisions of the recent health care legislation, and the way in which the tax system interacts with economic growth would result in steadily higher revenues relative to GDP.

The Alternative Fiscal Scenario. The budget outlook is much bleaker under the alternative fiscal scenario, which incorporates very different assumptions about revenues: that the tax cuts enacted since 2001 and extended most recently in 2010 will be extended; that the reach of the alternative minimum tax will be restrained to stay close to its historical extent; and that over the longer run, tax law will evolve further so that revenues remain near their historical average of 18 percent of GDP.

This scenario also reflects the assumptions that Medicare’s payment rates for physicians will remain at current levels (rather than declining by about a third, as under current law) and that some policies enacted in the March 2010 health care legislation to restrain growth in federal health care spending will not continue after 2021. In addition, the alternative scenario includes an assumption that spending on activities other than the major mandatory health care programs, Social Security, and interest on the debt will not fall quite as low as under the extended-baseline scenario.

With significantly lower revenues and higher outlays, debt held by the public would grow much more rapidly than under the extended-baseline scenario, reaching levels far above any ever experienced in U.S. history.

 

[BDBoop]

Many thanks, I can think of a few boards that can use this particular wake up call.

I also posted this transcript on the merged downgrade thread. Not that the neocons will acknowledge their role in S&P's decision to downgrade the US.

Denial kitties are in denial.

 

[BDBoop]

If Obama is the problem, then how come he has - what? 26 pts on Congress' approval rating?

Congress: Job Ratings

 

[Neotrotsky]

Too bad for you
he will get all the blame
if the economy does not improve

 

[Oddball]

If Obama is the problem, then how come he has - what? 26 pts on Congress' approval rating?

Congress: Job Ratings

Non sequitur.

 

[8537]

IOW, S&P is pimping for the DNC and Boiking....Right down to the latest cheap semantic weasel word for "raise taxes":

"Revenues".

Glad we got that all cleared up.

Right....S&P downgrading our credit rating is a sign that they are pimping for the DNC.

Amazing.

 

[BDBoop]

But what did S&P LEAD with in their discussion?

CNN.com - Transcripts

COOPER: Why did S&P downgrade the United States' credit rating today?

CHAMBERS: Well, I think there were two reasons.

The first reason is the one that you have outlined, being our view of the political settings in the United States have been altered. We have taken them down a notch, the rating down a notch. The political brinkmanship we saw over raising the debt ceiling was something that was really beyond our expectations, the U.S. government getting to the last day before they had cash management problems.

There are very few governments that separate the budget process from the debt authorization process. And we also think more broadly that this debate has shown that although we do have an agreement that will and we do believe will deliver at least $2.1 trillion of savings over the next decade, it is going to be difficult to get beyond that at least in the near term. And you do need to get beyond that to get to a point where the debt-to-GDP ratio is going to stabilize.

COOPER: So it's interesting. You're saying without a doubt, the recent debate, the recent roadblocks in Congress, the tenor, the timing, the tone of the debate had a major impact on this.

CHAMBERS: Yes.

 

[MaggieMae]

Who has been in charge?

Great liberal minds are hard at work
thinking on how to blame this on Bush

Yes, the credit rating has been downgraded for the first time in history as a result of less than 4 years of Democratic control. Uh huh.

Tell ya what, I do believe that bridge in Brooklyn is up for sale again but you'd best be quick because there are a few million other morons just like you who are already bidding on it.

 

[Neotrotsky]

after the downgrade can you really trust what the Left says about finances and the economy
For example PapaObama Care was going to instantly create 400,000 jobs



[ame=http://www.youtube.com/watch?v=pNiLYEiFUMU]‪Obamacare will create 400,000 jobs ALMOST IMMEDIATELY, says Choppy Hands McBotox‬‏ - YouTube[/ame]

 

[BDBoop]

Yes, the credit rating has been downgraded for the first time in history as a result of less than 4 years of Democratic control. Uh huh.

Tell ya what, I do believe that bridge in Brooklyn is up for sale again but you'd best be quick because there are a few million other morons just like you who are already bidding on it.

See my sig.

 

[MaggieMae]

I'm a neocon and I just voted GOP. IMHO the Dubya-Bush admin was horrid. It was not a conservative admin. It was a compassionate Liberal admin.

I totally blame the GOP. The made a friggen mountain out of this issue with no real plan to address it.

Revenue sits at 14% of GDP when historically it has been between 17% and 20%

Discretionary defense budgets are larger than the entire rest of the the discretionary budget. With the recent cuts discretionary spending will be at it's lowest level since the Dwight D. and below what it was under Clinton.

Yet, Republicans were unwilling to close huge loopholes than few reasonable people can defend. (see the hedge fund thread) They were unwilling to cut the defense budget. Their is no possible way to address the issue they created with the conditions they imposed. Especially with a Democratic Senator and President.

It was the stupidest piece of gamesmanship in the history of country done with the sole reason of trying to make Obama look bad. Instead they have damaged the country. I used to be registered Republican but what I think of them now is unprintable.

Unfortunately, too few among the common folk (and I don't use that term in a derogatory manner) are clueless about this whole thing and what caused it and what it means. But it's all Obama's fault will be the theme that will be heard from one end of the country to the other. Republicans think they have all the momentum now, since this happened on Obama's watch and since election fever is upon them again. And as usual, the loudest and most vitriolic voices are the ones the greater masses of Americans who don't even watch the news, for whatever reason valid or not, will hear. Just like the ones who continue to cry that the reason they can't find a job is "all Obama's fault." It's sad, really.