“I’m surprised S&P would play politics. The U.S. government can pay the interest and principal on the bonds,” he added.
S&P also has come under fire for a $2 trillion error in its calculations of projected U.S. debt, which the agency later corrected. Democrats noted that Moody’s Investors Service and Fitch Ratings, the other two major ratings agencies, haven’t stripped the U.S. of its AAA status.
“They made a $2 trillion mistake. The other ratings agencies did not downgrade the U.S. debt because they did not make that $2 trillion mistake,” Maryland Gov. Martin O’Malley, a Democrat, said during an interview on ABC’s “This Week.”
Despite the initial error, S&P’s broader analysis hasn’t changed, Mr. Beers said. The agency also warned of another downgrade if Congress and the administration can’t get a handle on the mounting national debt.
Also speaking on “This Week,” S&P Managing Director John Chambers said there is “at least 1 in 3 chance” that the credit rating could be lowered further in the next six to 24 months.
While Republicans see the threat of another downgrade as evidence that the federal government must reduce spending drastically, some Democrats see the move as justification for tax increases.
“Look, I think this Standard & Poor’s downgrade is a good thing, because I think it underlines the fact that you can’t [tackle the national debt] without raising revenues,” former Vermont Gov. Howard Dean, who ran for president in 2004 and later led the Democratic National Committee, said on CBS’ “Face the Nation.”
“The vast majority of the American people want us to raise revenues, particularly on all those gazillionaires that Republicans’ tax cuts mostly benefit,” Mr. Dean said. “So let’s do the right thing. Let’s everybody put something into the pot.”
Mr. Dean also took shots at the tea party, saying the activists’ conduct during the debt ceiling debate proves “they’ve been smoking some of that tea, not just drinking it.”
The nation’s best chance to avoid further downgrade may lie with a so-called “supercommittee” to be formed as part of the debt ceiling deal Mr. Obama struck with Republicans last week.
The 12 members of that committee must be named by Aug. 16, and there has been widespread speculation that Rep. Paul Ryan of Wisconsin, architect of the 2012 Republican budget, will be chosen. But Mr. Ryan on Sunday poured cold water on the notion that the supercommittee will come to the rescue.
“I wouldn’t call it super. … I’m not putting all my stock in this committee,” he said on “Fox News Sunday.”
“I don’t think it’s going to be what fixes all of our fiscal problems. … Ultimately, I really think you need to change leadership in Washington if you want to fix this problem,” he added.
At best, Mr. Ryan said, the “supercommittee” will identify $1 trillion to $2 trillion in additional cuts, far below the $4 trillion threshold S&P cited as necessary to put the nation back on firmer financial footing.
Mr. Ryan also is an example of how jockeying for partisan advantage affects the nation’s finances.View Entire Story
© Copyright 2013 The Washington Times, LLC. Click here for reprint permission.
Ben Wolfgang is a national reporter for The Washington Times. Before coming to the Times, he spent four years as a political reporter in Pennsylvania. His focus is on education and science policy. Ben lives in southeast D.C. and has played guitar in several bands while still in Pennsylvania. He can be reached at email@example.com.
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