Axelrod: ‘This is essentially a tea party downgrade’
The Daily Caller
It appears the new Democratic talking point on Friday’s S&P downgrade of the U.S. credit rating is to blame on the tea party, by referring to it as a “tea party downgrade.”
That phrase began to surface Sunday on morning talk shows, first with Democratic Massachusetts Sen. John Kerry and then with President Barack Obama’s presidential campaign adviser David Axelrod.
On CBS’ “Face the Nation,” Axelrod explained his interpretation of the downgrade. He argued it had more to do with the country’s politics and less to do with its finances.
“Well, first of all, let’s see how the markets react because I think there’s a broad consensus that this is still the safest place to put your money,” he said.
“You know, we can debate the strength of the analysis that they did, the history of S&P and so on. They made an egregious analytical error here but theirs was largely a political analysis. That’s what we should focus on because what they were saying is they want to see the political system work. They want to see a sense of compromise. They want to see the kind of solution that the president has been fighting for, a large solution that will team with the problem, that will be balance, that will include revenues, that will deal with some of our long-term issues. We still made some progress in the compromise that was struck on the debt. What they’re saying is we have to make more progress. In fact we do. That’s what the next few months is going to be all about.”…
The article continues at The Daily Caller.
…On Fox News Channel Saturday, S&P Sovereign Ratings Committee Managing Director John Chambers explained the rating agency’s decision and what factors played a role.
“[T]he rating was motivated by a number of factors,” Chambers said. “One was the political gridlock in Washington, which makes us think it is going to be difficult for elected officials to put the fiscal profile of the U.S. government on a long-term sustainable path. And part of it was because of the fiscal path itself — debt-to-GDP at the all-in level, the states and local governments and federal governments in that of liquid assets is about 75 percent of GDP. And that’s going to trend up. That’s going to trend up over the next decade unless we get additional fiscal measures than what we got on the table now.”
Chambers said had the U.S. government managed to find $4 trillion in cuts, versus just the $2 trillion currently on the table with the latest agreement, it could have staved off a downgrade from the ratings agency…
At HotAir.com, McCain: This is Obama’s downgrade, not the Tea Party’s [with video]
…The White House is pushing the “Tea Party downgrade” message pretty heavily today. Kerry carried Obama’s water on MTP with David Gregory, and David Axelrod did the same on CBS’ Face the Nation. They even dragged Howard Dean out for CBS to claim that conservatives are “smoking tea” for wanting real reductions in spending and future entitlement liabilities rather than higher taxes.
McCain, however, gets this one right. Voters sent a clear message in last year’s midterms, and it wasn’t “spend more and increase taxes.” Democrats refused to listen in 2009 when voters revolted over the addition of another massive entitlement program; voters spent all of 2010 revolting over Obamanomics; and they punished Democrats in November for not listening to them. Democrats still aren’t listening, and the way they are reacting now, 2012 may make 2010 look like a good year for the Democratic Party.
S&P Strips U.S. of Top Credit Rating
Unprecedented Downgrade Comes After Last-Minute Standoff; Treasury Says Decision Is ‘Flawed by a $2 Trillion Error’
A cornerstone of the global financial system was shaken Friday when officials at ratings firm Standard & Poor’s said U.S. Treasury debt no longer deserved to be considered among the safest investments in the world.
S&P removed for the first time the triple-A rating the U.S. has held for 70 years, saying the budget deal recently brokered in Washington didn’t do enough to address the gloomy outlook for America’s finances. It downgraded long-term U.S. debt to AA+, a score that ranks below more than a dozen governments’, including Liechtenstein’s, and on par with Belgium’s and New Zealand’s. S&P also put the new grade on “negative outlook,” meaning the U.S. has little chance of regaining the top rating in the near term.
The unprecedented move came after several hours of high-stakes drama. It began in the morning, when word leaked that a downgrade was imminent and stocks tumbled. Around 1:30 p.m., S&P officials notified the Treasury Department that they planned to downgrade U.S. debt and presented the government with their findings. Treasury officials noticed a $2 trillion error in S&P’s math that delayed an announcement for several hours. S&P officials decided to move ahead, and after 8 p.m. they made their downgrade official.
S&P said the downgrade “reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.” It also blamed the weakened “effectiveness, stability, and predictability” of U.S. policy making and political institutions at a time when challenges are mounting…
…The downgrade from S&P has been brewing for months. S&P’s sovereign debt team, led by company veteran David T. Beers, had grown increasingly skeptical that Washington policy makers would make significant progress in reducing the deficit, given the tortured talks over raising the debt ceiling. In recent warnings, the company said Washington should strive to reduce the deficit by $4 trillion over 10 years, suggesting anything less would be insufficient…
…First, Bob Schieffer really goes after Axelrod here. It’s a very tough interview and you can see Axelrod struggling just to get through it. That said, Bob’s understanding of the reasons for the downgrade is simply wrong (at least as he’s stated it here). The contentious nature of the debate was certainly part of S&P’s reasoning, but only because it demonstrated to analysts that we were not going to be able to make progress on the underlying problem, i.e. our debt and especially our unfunded entitlements.
Second, contrary to Axelrod’s pre-scripted line, this was not a “Tea Party downgrade.” S&P made clear several times in the report that they were unhappy to see so much reluctance to deal with entitlements. That reluctance was certainly not coming from the Tea Party.
Third, that clip of Obama saying he’ll have this turned around in 3 years or be a one term President is priceless. I expect to see a campaign commercial using that come January. In response to it, you see Axelrod tap dancing for his life. All he has to offer, really, is a choice between “tax cuts for the rich” and “Do we want to invest…” which is to say more government spending. This is a preview of the coming election. It’s going to be class warfare on a scale we’ve never seen before. It’s all they’ve got…
Update 2: The Astute Bloggers have been busy making timely posters and bumper stickers. This is our favorite from the selection:
Update 3: JammieWearingFool has posted video of MA’s senators commenting on the debt debate and the downgrade. If Senator “Jenjiss Khan” grows any more petulant, we may be reduced to praying for the return of sharks in the waters around Martha’s Vineyard and Nantucket…for his own good. Meanwhile, does Senator Scott Brown realize he and Speaker Boehner are actually members of the same party? Or…?
Update 4: Soros-Funded Leftist Group MoveOn.Org Pushing New Dem Talking Point: “Tea Party Downgrade”… at Weasel Zippers
CAJ note: If you think back to the “stimulus” bill of February 2009, you’ll recall Obama’s chairman of the White House Council of Economic Advisers, Christine Romer, said if that spending was approved unemployment would not go above 8%. This genius eventually left the administration to be replaced by other geniuses. So what does Ms. Romer think now? The country is “pretty darn fucked.”
Why, thank you, Christine for confirming what so many of us have suspected for years!
Rasmussen Reports (8 August 2011): 29% Say Tea Party Members Are Terrorists, 55% Disagree