- Senators Pass Blame on Credit Downgrade
- Axelrod Calls S&P Move a 'Tea Party Downgrade'
- Cautious Optimism for Super Committee
- S&P Analyst Says the Downgrade Blame is Bipartisan
- Pawlenty Predicts a Poll Surge After Iowa Straw Poll
- Summers Praises Administration's Economic Record, Blames GOP for Downgrade
CORRECTION: This blog now correctly identifies the show Lawrence Summers appeared on as State of the Union.
Senators Pass Blame on Credit Downgrade
11:30 a.m. A top Senate Democrat lambasted Standard & Poor’s move downgrading America’s long-term debt as “the tea party downgrade,” while a Republican counterpart placed blame on President Obama.
“This is without question the tea party downgrade,” Sen. John Kerry, D-Mass., said on Sunday’s Meet the Press. He said the minority of Republicans in the House who represent the tea party movement coerced the congressional GOP writ large to refuse Obama’s $4.7 trillion deal to raise the debt ceiling that included both spending cuts and additional tax revenues.
S&P's Friday downgrade of the United States' credit rating came just days after Obama and congressional leaders agreed to the last-minute deb-ceiling deal. The deal included no tax revenues and was roughly half ($2.4 trillion in cuts) of the grand bargain Obama and House Speaker John Boehner, R-Ohio, were considering earlier on in the negotiations.
Also appearing on Meet the Press, Sen. John McCain, R-Ariz. refused to address the tea party’s role in raising the debt ceiling and in S&P’s decision to lower America’s credit rating.
“I think it’s failed presidential leadership when you don’t put forward a plan, specific proposal to work off of,” McCain said in response to a question by host David Gregory about the tea party’s role and Kerry’s comments earlier in the show.
Kerry said Congress has found bipartisan ideas that he encouraged Congress to act quickly on, including a highway reauthorization bill and an infrastructure bank.
McCain didn’t mention either of those ideas, both of which would likely mean an increase in federal spending, something McCain and other Republicans are generally opposed to. But he did express optimism the so-called “super committee” created as part of the debt-ceiling deal would succeed. The committee, whose 12 members have not been selected yet, must come up with $1.5 in cuts by Thanksgiving or else across-the-board cuts would take effect. The S&P downgrade should add further incentive for members, who have yet to be chosen yet, McCain added.
"This select committee I believe can really do what we haven’t had the courage to do in the past,” McCain said. “And the difference between this and other [committees] is that this is an up-or-down vote. I think a lot of us would have the courage for what the most experienced people in Congress come up with.”
Former Federal Reserve Chairman Alan Greenspan doesn’t seem to agree. Appearing after McCain as part of a roundtable discussion on Meet the Press, Greenspan said the chances the committee would succeed in significant deficit cuts was “very low.”
For significant cuts to occur, committee members would have to agree to buck his or her party on tax increases and entitlement reform. And that seems unlikely, Greenspan said.
Axelrod Calls S&P Move a 'Tea Party Downgrade'
10:55 a.m. Presidential adviser David Axelrod denounced Standard & Poor’s report on the United States' credit rating as “a tea party downgrade” and accused GOP presidential candidates of doing the bidding of conservative extremists.
Axelrod, appearing on CBS’ Face the Nation, sought to minimize the S&P decision to lower the nation’s credit rating. “Their’s was largely a political analysis,” he said.
Axelrod blamed the downgrade—along with the contentious debate over the nation’s debt limit—on a no-compromise wing of the GOP. “This is essentially a tea party downgrade,” he said.
Axelrod noted that former Massachusetts Gov. Mitt Romney and most other GOP presidential candidates opposed the compromise debt-ceiling bill passed by Congress and signed by Obama this week. Romney, he said, weighed into the debate, only “after ducking and dodging and evading.”
Appearing on the same show, Sen. Lindsey Graham, R-S.C., said the tea party represents the public’s widespread anxiety over the national debt.
"You can’t be $14 trillion in debt unless both parties work hard to get you there,” Graham said. “Washington was broken before [the tea party] got here. I hope they can help us fix it.”
Graham laid the struggling economy at Obama’s feet. “What was hope and change,” he said, “is now despair and confusion.”
“The president’s problem is he’s not leading,” Graham said. “He’s a casual observer.”
Cautious Optimism for Super Committee
10:30 a.m. Top politicians from both parties and a key Standard & Poor's analyst are cautiously optimistic that the congressional super committee can succeed in cutting the nation’s debt despite political gridlock.
“I think they will deliver, and if they don’t deliver they’ll have a sequestration measure in place,” John Chambers, S&P managing director, said on Sunday on ABC’s This Week.
S&P on Friday downgraded U.S. Treasuries from AAA to AA+ largely because of what the credit agency sees as political gridlock between the two parties.
As part of the last-minute deal to raise the debt ceiling last week, President Obama and Congress agreed to create the so-called super committee made up of an equal number of Republicans and Democrats from both chambers of Congress to find an additional $1.5 trillion in cuts by Thanksgiving. If they can’t, across-the-board cuts are set to take effect. The members of the committee have not been selected yet.
“I do believe that the committee can function and be successful in the limited goal we’ve given them,” Senate Budget Committee ranking member Jeff Sessions, R-Ala., said on This Week following Chambers.
Maryland Gov. Martin O’Malley, chair of the Democratic Governors Association, said he also thought the bipartisan, bicameral committee could succeed. “When you ask the public if they believe a balanced approach is required, almost 50 percent of registered Republicans say a balanced approach is required,” O’Malley said, referring implicitly to both tax-revenue increases and spending cuts.
Chambers said that there was a one-in-three chance the credit agency would downgrade U.S. Treasures' rating again if the political gridlock “becomes more entrenched.”
O’Malley and Sessions did, ironically, spend a good portion of their joint segment arguing over how the committee should tackle the nation’s debt.
S&P Analyst Says the Downgrade Blame is Bipartisan
9:50 a.m. Both Republicans and Democrats are to blame for Standard & Poor's downgrading the United States' long-term debt, an S&P analyst and top Republican lawmaker said on Sunday.
“Congress and the administration are both responsible for the conduct of fiscal policy,” David Beers, global head of sovereign ratings at S&P, said on Fox News Sunday. “So it’s not really about either political party, it’s about the difficulty of all sides in finding a consensus around fiscal policy choices now and in the future.”
S&P on Friday evening took the unprecedented step of downgrading U.S. Treasuries from AAA to AA+ largely because of what the credit agency sees as political gridlock between the two parties. “We have changed our view of the difficulties in bridging the gulf between the two political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the administration to be able to leverage their agreement this week into a broader fiscal-consolidation plan that stabilizes the government’s debt dynamics any time soon.”
House Budget Committee Chairman Paul Ryan, R-Wis., also appearing on Fox News Sunday, said that “both political parties are responsible for the mess we have right now.”
He then however did seem to pin the blame on Democrats. “Unfortunately our partners on the other side of the aisle have always been unwilling to put a specific program out there to address entitlements, especially health care entitlements.”
Beers, who said a further downgrade of the U.S. Treasuries' rating is more likely than an upgrade, agreed entitlement reform is critical in future deficit plans. “Entitlement reform is important because entitlements are the biggest component of spending and the part of spending where the cost pressures are greatest.”
Ryan said he doubts that Democrats on the so-called super committee will agree to major cuts in health care costs, which he said are needed to truly tackle the debt.
He said he would accept a seat on the committee if House Speaker John Boehner, R-Ohio, asked him even as he lowered expectations for what the panel could accomplish.
“I’m not putting my stock in this committee,” he said. “I think people are overemphasizing what this committee is going to achieve.”
Pawlenty Predicts a Poll Surge After Iowa Straw Poll
9:45 a.m. Republican presidential candidate Tim Pawlenty predicted his struggling campaign would move “closer to the front of the pack” after the straw poll in Ames, Iowa, next weekend.
“We are seeing momentum on the ground,” Pawlenty said in a Fox News Sunday interview from West Des Moines, Iowa. “You are going to see good progress.”
He stopped short of predicting victory in the straw poll, an unofficial but important early test of the GOP candidates’ organizational strength in Iowa. The state’s caucuses kick off the primary season in 2012.
The former Minnesota governor said the next president needs executive experience and a record of getting things done, a thinly veiled criticism of Rep. Michele Bachmann, R-Minn. “I don’t just flap my jaw,” he said.
Without directly comparing Bachmann to President Obama, Pawlenty’s target was unmistakable: He said voters made a mistake in 2008 when they elected an inexperienced legislator president before he was prepared for the office.
“We don’t want to repeat that mistake,” Pawlenty said.
Summers Praises Administration's Economic Record, Blames GOP for Downgrade
9:30 a.m. Lawrence Summers, a Treasury secretary in the Clinton administration and the former director of President Obama’s National Economic Council, criticized Standard & Poor’s downgrade of the United States’ credit rating, and praised the White House for pursuing stimulus policies during the recession.
“The United States is going to pay its debts,” Summers, appearing on CNN’s State of the Union, said, taking aim at S&P’s credibility. “S&P said sell, Warren Buffet said buy…. That should tell you something.”
Summers added that blame for the downgrade falls squarely at the feet of congressional Republicans, saying the downgrade shows “unhappiness with the solutions that are coming out of Congress for critical economic problems.”
He said that there was a risk of a double-dip recession going forward, but praised the administration for being proactive.
“God knows if we hadn’t pursued these policies, we’d be looking at another version of what happened in the 1930s,” he said.