The White House, Republicans and Democrats tried to win the messaging wars on Monday after the Standard and Poor lowered the rating of the United States’ long-term debt to “negative.”
White House press secretary Jay Carney said lowering the rating from “stable” to “negative” proved that Republicans and Democrats needed to put politics aside and work together to fix the nation’s finances and raise the debt ceiling.
“We think a reminder that we need an agreement on fiscal reform is always valuable,” he said.
House Republican leaders, on the other hand, said the “negative” outlook was the best reason yet to make raising the debt ceiling dependent on significant spending cuts.
“For decades, Washington has blindly increased the debt limit while doing little to stop spending money that it doesn’t have, a dangerous pattern that must end,” House Majority Leader Eric Cantor (R-Va.) said in a statement. “As S&P made clear, getting spending and our deficit under control can no longer be put off for another day.”
Rep. Peter Welch (D-Vt.) said the S&P’s report showed how imperative it was for the debt limit to be voted on in a “clean bill” instead of letting long and sometimes heated debates over spending reductions risk the limit not being raised.
“I hope Majority Leader Cantor and those in Congress seizing upon debt ceiling pressure as a leverage opportunity are listening to the markets today and thinking twice about their risky strategy,” Welch, who also released the names of 114 House Democrats who supported his position, said. “If Mr. Cantor persists in playing politics with the debt limit, he will be held accountable for unleashing the financial hounds of hell.”
Monday was the first time the S&P has rated the U.S. outlook as “negative” – causing the financial markets to tumble on Monday – in the 60 years it has been judging the country’s credit quality. In its report, the agency said it was not confident The White House and House Republicans could reach an agreement on lowering the national debt and deficit.
“We believe there is a material risk that U.S. policy makers might not reach an agreement on how to address medium-and long-term budgetary challenges by 2013,” S&P said in the report. “If an agreement is not reached … this would in our view render the U.S. fiscal profile meaningfully weaker.”
However, an Obama administration official dismissed that assessment and even though the parties in Congress were arguing over what it should take to raise the debt limit, the administration was confident a compromise could be accomplished.
“We believe S&P’s negative outlook underestimates the ability of America’s leaders to come together to address the difficult fiscal challenges facing the nation,” Mary Miller, assistant Treasury secretary for financial markets, said. “Addressing the current fiscal situation is well within our capacity as a country.”
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