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8 August 2011
GOP 2012 Hopefuls Blame Obama for S&P Rating Downgrade
finance.yahoo.com GOP primary candidates blame President Obama for Standard & Poor's downgrading of the United States' long-term debt, though the ratings agency cited politicking in Washington as the reason for the downgrade.
"The president's failure to put our nation's fiscal and economic house in order has caused a massive loss of confidence that resulted in an embarrassing downgrade," former Massachusetts Gov. Mitt Romney said in a statement Monday. "In the Carter era, it was called 'malaise.' Under President Obama, it's called meltdown."[See a slide show of the 2012 GOP candidates.]
Reps. Ron Paul and Michele Bachmann, who both voted against the deal to raise the debt ceiling, blamed the deal itself--both have said the debt ceiling shouldn't be raised in the first place. "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," Paul said in a statement, adding a firm campaign promise: "If elected President, I pledge to veto any unbalanced budget and to balance the federal budget in the first year of my term."
Bachmann added a harsh judgment on Obama. "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," she said in a statement. "President Obama is destroying the foundations of the U.S. economy one beam at a time." [Check out a roundup of political cartoons on the deficit.]
The assessment by Bachmann and Paul that raising the debt ceiling is to blame, however, seems to contradict S&P's analysis of their own decision, which they said was partially due to the "prolonged controversy" over raising the debt ceiling. In a "why can't we all just get along" type of plea, S&P reported that, "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."
Other GOP candidates pointing the finger at what they see as a lack of leadership from the White Houseincluded former Minnesota Gov. Tim Pawlenty, former Utah Gov. Jon Huntsman, ex-pizza magnate Herman Cain, former House Speaker Newt Gingrich, former Sen. Rick Santorum, and former New Mexico Gov. Gary Johnson also pointed the finger at "What we should be talking about is downgrading Barack Obama from President of the United States," Pawlenty said at an Iowa campaign event over the weekend. [Check out political cartoons about the 2012 GOP field.]
S&P's report indicated that the credit rating agency expects the upcoming elections will make political compromise over fiscal policy even more difficult, and that's likely, if the campaign responses are any indication. "A new political consensus might (or might not) emerge after the 2012 elections," the report said, "but we believe by then, the government debt burden will likely be higher," and the demands on fiscal policy will be greater.
