The credit rating agency said that it is cutting the country’s top AAA rating by one notch to AA-plus. The credit agency said that it is making the move because the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilize the country’s debt situation.
A source familiar with the discussions said that the Obama administration feels the S&P’s analysis contained “deep and fundamental flaws.”
S&P said that in addition to the downgrade, it is issuing a negative outlook, meaning that there was a chance it will lower the rating further within the next two years. It said such a downgrade to AA would occur if the agency sees less reductions in spending than Congress and the administration have agreed to make,higher interest rates or new fiscal pressures during this period.
Earlier on Friday the DNC claimed victory for Obama in the debt deal:
Democrats won the debt ceiling fight and they have the poll numbers to prove it, says Patrick Gaspard, the former White House official now running the Democratic National Committee.
“This agreement was a stinging defeat for the Ryan/House Republican Budget approach,” read a memo signed by Gaspard, “and was also a thorough rejection of the GOP’s so called ‘Cut, Cap and Balance’ plan, which was simply the Tea Party version of the Ryan plan on steroids.”
Okay. They claim they won the debt ceiling fight, therefore they own it.
They boast of their rejection of the Cut, Cap, and Balance plan, even though had it been adopted, the downgrade would have been avoided.
“When the nation is downgraded, and markets crash, the American people now have someone to blame: Those senators that refused to take the opportunity presented by ‘Cut, Cap, and Balance’ to restore order to the nation’s fiscal house.” (Americans for Limited Government)
Cut, Cap, and Balance was passed by the House and went to the Senate on July 22, 2011, where it was promptly TABLED without debate or vote. It could have been passed and signed into law, avoiding further delays and the credit rating downgrade.
HOWEVER, HARRY REID HAD ALREADY DECLARED IT WOULD NOT PASS, WOULD NOT PASS, WOULD PASS AND OUR PRESIDENT SAID HE WOULD VETO IT IF IT PASSED.
Posted: 08.05.11 @ 9:55 p.m. Updated: 08.06.11 @ 3:48 p.m.