White House Points Out How GOP Policies Caused Downgrading By S&P

The lowering of the nation’s credit rating by Standard and Poor’s is the latest evidence of how reckless Republican economic policies are harming the country. S&P directly referred to the uncertainty in the political process (created by Republicans who prevented an agreement on raising the debt limit until the last minute) as well as the difficulty in resolving the deficit crisis because “the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.”

Republicans, who created the deficit crisis, and who have an excellent history of winning the spin wars in recent years due to their expertise in distorting the facts and their domination of the news media, immediately began to distort the report in their favor. The White House has responded:

Over the past weeks and months the President repeatedly called for substantial deficit reduction through both long-term entitlement changes and revenues through tax reform, with additional measures to spark jobs and strengthen our recovery,” press secretary Jay Carney said in a statement.

“That is why the President pushed for a grand bargain that would include all of these elements and require compromise and cooperation from all sides.”

Rather than Obama, who is now the target of more fallacious attacks from the right, Matthew Yglesias sees  John Boehner as the big loser here:

The person who looks bad here, in my view, is John Boehner. President Obama wanted to do a “grand bargain.” The Gang of Six Senators wanted to do a “grand bargain.” And it looked for a moment like Speaker Boehner was going to be part of a grand bargain. But ultimately he decided that he didn’t want to sign a deal that would fracture his caucus, so the grand bargain talks fell apart. And yet the little bargain that did eventually pass the House ultimately couldn’t pass with Republican votes alone. So what did Boehner really achieve? If he was ultimately destined to strike a deal with the White House that needed Democratic votes to pass the House, why not go for the grand bargain? According to Boehner “When you look at this final agreement that we came to with the white House, I got 98 percent of what I wanted. I’m pretty happy.” How happy is he now?

Far more people than John Boehner will be big losers here if the facts get out over the propaganda from the right wing noise machine. Besides Boehner, the big losers here include the Republicans who voted for the massive increase in the deficit under George Bush, listening to claims that “deficits don’t matter,” while opposing Obama’s plans to rescue the economy. The losers also include the extremists, including the Tea Party supporters, who played hostage with the economy and made default a real possibility, precipitating the reduction on the credit rating. Unfortunately this turned out to be a hostage crisis where the right wingers killed the hostage.

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20 Comments

  1. 1
    joe in oklahoma says:

    actually, nowhere in the WH statement were the Republicans blamed for anything. Congress as a whole was blamed, as if the dems were equally responsible for the mess we are in. 
    Obama keeps thinking the GOP wants to cooperate in governing America. sad tragedy. 

  2. 2
    Andrew Carvin says:

     
    Republican (aka stupid person) = “Let’s give all the wealth to the top 1% of society, and somehow the economy will continue to function.”

    Science = “If 99% of America has no money to spend the economy will die.”

    It is basic math: 1% of American’s are rich, and 99% of American’s are NOT rich. 1% is less than 99%. If 99% of Americans do not have any disposable income, or no income at all, 99% of the economy WILL FAIL because people who do not have any money to spend will not be able to spend any money. This is not hard for anyone with a functioning brain to understand.

    If the economy fails the money/investments of rich people will become WORTHLESS because they only retain their value in a good economy.
     
    You cannot have a successful economy or society based on only taking care of 1% of the population.

  3. 3
    Andrew Carvin says:

     
    Artificial Scarcity occurs when the supply of X is controlled to make it scarce on purpose when the reality is that the supply of X is virtually unlimited. This is usually done to make X worth more than it really is, and thus increase profits for those who are the purveyors of X.
     
    The easiest example of this is food. Every year millions of tons of food end up in landfills because the stores that bought it were not able to sell it. They rather throw it away to keep food scarce/expensive than give the food to those who need it for free. By doing so they create an artificial scarcity of food.
     
    The largest example of artificial scarcity is the supply of money. Money is nothing more than metal/paper with fancy pictures on it, and has no intrinsic value accept what we give it. If we are experiencing financial problems we should either print more, or throw the entire concept of money in the garbage.
     
    How morally bereft do you have to be to openly advocate the needless suffering/deaths of millions of people over the artificial scarcity of metal/paper with fancy pictures on it?

  4. 4
    A Conservative Teacher says:

    I suppose your solution to the ‘uncertainty caused by Republicans in the political process’ is to just kill off all the Republicans, take all their stuff, and then give it to people who you like? Or is your solution to limit the size and power and scope of the government and let people live in freedom and liberty?

    The S&P downgraded the US because the government spends too much money it doesn’t have. Option one is to plunder more people more brutally to transfer wealth, or option two is to cut back spending and spend money more efficiently. It is clear what option you support- you’re a typical tyrant supporting crony who would fit in better in China or Libya then America.

  5. 5
    Martin Williams says:

    White House Points Out How GOP Policies Caused Downgrading By S&P http://j.mp/pbaBR6

  6. 6
    Ron Chusid says:

    Conservative Teacher,

    Thanks for demonstrating that the problem with conservatives is not just that they are wrong on the issues, ignorant of the facts, and morally bankrupt, but that many of you are totally out of touch with reality.

    Nobody I know supports killing any Republicans, taking any of their property, or giving it to anyone else.

    The fundamental principle of liberalism is to increase human liberty. It has been conservatives who have been spending money we do not have, claiming that deficits don’t matter. Democrats have supported a pay as you go approach which conservatives have opposed. It is also Republicans who have been using government to impose their views upon others to decrease individual liberty.

    Now that we are stuck with the deficit created by Republican policies, we have to pay our debts. Liberals are not deadbeats like conservatives are.

    This takes a balanced approach of both cutting spending and increasing revenue as Obama has called for. Are you claiming that the tax increases which Obama wants (i.e. eliminating the Bush tax cuts on taxable income over $250,000) is tantamount to Chinese style Communism? If so, you are really ignorant. The tax rates which Obama supports would still be less than those under Ronald Reagan. Was Ronald Reagan engaging in the brutal transfer of wealth?

    Incidentally, since I’ve rarely met a conservative who understands the concept of marginal tax rates, eliminating the tax cuts on taxable income over $250,000 means that, as not all income is taxable, this won’t even people until their income is over $300,000. Approximately the first $315,000 of income would be taxed at exactly the same rate as now. Only income over this level would be taxed at a higher level, meaning even people making well over $300,000 would only have a modest increase in taxes. In other words, your comparison to China and talk of transferring wealth is total nonsense coming from someone out of touch with reality.

  7. 7
    Ron Chusid says:

    Joe,

    I think that Obama knows very well that the Republicans do not want to cooperate. His goal is to be the grown up in the room who does want to negotiate and govern. The problem is that the Republicans are far better at promoting their propaganda, and Obama does not receive enough credit. However, compare Obama’s approval with that of Congress and it looks like he has had some success with this approach.

  8. 8
    Ron Chusid says:

    Joe,

    I think that Obama knows very well that the Republicans do not want to cooperate. His goal is to be the grown up in the room who does want to negotiate and govern. The problem is that the Republicans are far better at promoting their propaganda, and Obama does not receive enough credit. However, compare Obama’s approval with that of Congress and it looks like he has had some success with this approach.

  9. 9
    Ron Chusid says:

    Andrew,

    Countries have tried to solve problems such as this by printing more money. That never works as you get to a point were the value of the currency rapidly erodes.

  10. 10
    Ron Chusid says:

    Joe,

    It should also be added that all Republicans are not alike (just as all Democrats are not alike). If John Boehner had his way, he would have negotiated a deal with Obama a week before the deadline, and then spent the following week playing golf. Pressure from the far right, which dominates the GOP, prevented Boehner from doing so.

  11. 11
    Joan says:

    Ron nails it again. It’s clearly the tea party’s fault. If congress could have raised taxes, we would have avoided the downgrade. Here’s what David Beers, global head of sovereign and international public financeratings at S&P said just today:
    “The key thing is, yes, entitlement reform is important because entitlements are the biggest component of spending, and the part of spending where the cost pressures are greatest””
    Moreover, like Ron, he completely exonerates the Democrats and blames Republicans and the Tea party:
    “Beers said he faults both Congress and the Obama administration for ‘the difficulty of all sides in finding a consensus around fiscal policy choices,’ but any agreement must command the support from both political parties in order to be durable.”
    Clearly the Democrats where aware of what was needed to be done and were willing to do what was necessary to avoid a downgrade, but the GOP terrorists wouldn’t let them, i.e., implement spending cuts to tax increases by a 3 to 1 ratio:
    “Though the announcement noted that S&P “takes no position on the mix of spending and revenue measures that Congress and the administration might conclude is appropriate for putting the U.S.’s finances on a sustainable footing,” the credit ratings group suggested that tax hikes may be necessary to reduce the overall debt burden needed to improve the long-term outlook.

    Beers drew no such conclusion on Sunday, though John Chambers, managing director of S&P, told ABC’s “This Week” that President Obama’s fiscal commission last year “had plenty of sensible recommendations” for reducing U.S. debt. Those recommendations, which included cutting spending and increasing revenues on a 3-1 ratio, were ignored. ”

    I look forward to more honest and objective writing from Ron about these and other important topics.  Thank you Ron for honestly trying to understand the issues in order to do what’s best for everyone. Without liberals look you, I don’t know where the country would be today:
    Read more: http://www.foxnews.com/politics/2011/08/07/sp-chief-looks-at-entitlement-reform-to-resolve-debt-downgrade/

  12. 12
    Joan says:

    Opps! I referenced foxnews, and we know what lairs they are.  Here’s an objective source that completely contradicts the lairs at Fox.  Ron is right — it’s taxes, taxes, taxes, we need to raise taxes. That’s what the downgrade was all about. Despite all the objective evidence out there, the “right” just doesn’t get it. I guess we need to keep saying it over and over and over again until everyone gets it!  From Bloomberg.com:
     
    “The U.S. had its AAA credit rating downgraded for the first time by S&P, which slammed the nation’s political process and said lawmakers failed to cut spending enough to reduce record deficits.”
     
    See: http://www.bloomberg.com/video/73607630/

  13. 13
    Deborah says:

    Obama and dems had every chance to pass a budget, yet nothing in over 800 days. 
    Uncertainty in markets and small business is because of obamacare and all the new taxes that will be added over the next couple of years, yet you want even more. 
    Get your house in order before you point the finger.
    Conservatives are not wholly against revenue increases, and initially Boehner agreed to 800 billion but Barky was not happy with that and wanted more.
    Obama has failed as a negotiator and a leader.

  14. 14
    Ron Chusid says:

    Deborah,

    It has been the Republicans who blocked any attempt to get things in order. Republicans are opposing any increase in revenue which involves eliminating the cuts on taxable income over $250,000–which is the only sensible way to start to get the budget in order.

    S&P’s decision refers to the uncertainty caused by the Republicans bringing us to the brink of default. You are projecting your own uninformed opinions by bringing health care reform into this. Repeal of the Affordable Care Act would increase the deficit according to CBO scoring, making matters worse. There is hardly anything in the way of new taxes. However, as Democrats support a pay as you go approach (while Republicans oppose this, claiming that deficits don’t matter) it is necessary to pay for health care reform. Obama’s plan costs less than George Bush’s Medicare plan (which was really corporate welfare for the insurance and pharmaceutical industries). While Obama’s plan is paid for, Bush’s was not. Bush even threatened to fire the chief Medicare actuary if he testified before Congress as to its cost.

    Health care reform decreases uncertainty and helps stimulate the economy. It relieves small businesses of the unpredictable and growing costs of health care costs. It frees people to leave big corporations and encourages the growth of more innovative small businesses by no longer forcing individual to remain with their current employers due to the collapse of the private insurance market in this country. It relieves the uncertainty of people in the individual market who are now at risk of losing their coverage if they get sick.

  15. 15
    Ron Chusid says:

    Joan,

    Typical tea party supporter–lying about what others said to support your position because the actual facts are against you. Unfortunately, it is this tea party influence on the GOP which led to the downgrading–which is clear in their actual report.

    It isn’t all about taxes. That is not what I am saying at all, but you tea party people prefer to make straw men attacks and lie like this as opposed to responding to what is actually being said. It is about a balanced approach which both cuts spending and raises revenue.

    Look at the actual statement, rather than cherry picking one line which is taken out of context from a conservative news story as opposed to the actual report. The actual S&P report clearly blames the Republicans and the Tea Party for the downgrade, because of creating uncertainty by bringing us close to default, by showing that the Republicans are preventing the government from working properly, and by refusing to increase taxes where needed. As the S&P report said: “the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.”

    Obama was willing to cut spending and would have increased revenue so that we could balance the budget. Obama had a plan to get us out of the crisis. S&P lowered the credit rating because the Republicans prevented this from happening.

  16. 16
    Jim Z. says:

    The federal budget went from surplus to deficit as a result of Bush’s 2 wars and his tax cuts.  The record doesn’t lie.  The third cause was the financial meltdown that resulted from fin. deregulation and criminal activities by the bankers and shadow bankers.  At the moment Obama was sworn in Jan. 20, 2009, job destruction in trhe economy was in steep freefall.  Comparing the magnitude of monetary actions (the Fed and Treasury flooding the financial system with liquidity), vs. fiscal actions (the Feb. 2009 stim. bill), the former is now estimated to be around $17 trillion, whereas the latter amounted to about $500 billion, because some $300 B of the stim. bill was tax cuts which the GOP demanded instead of direct spending.  State and local spending has fallen by approx. the same amount ($500 B), thus the net government direct spending for all 3 levels fed-state-local has been a wash.  In fact, if you look at private sector job creatiion under Obama, it has risen steply, while public sector jobs have fallen steeply.  Actual federal fiscal actions have been extremely small compared with the size of the economic decline; they have, at best, been large enough to prevent a great depression.

  17. 17
    John Sonntag says:

    RT @ronchusid: White House Points Out How GOP Policies Caused Downgrading By S&P #p2 #p21 #topprog http://t.co/pxfbkol

  18. 18
    Thales99 says:

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  19. 19
    Edward Virtually says:

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  20. 20
    Ed Veracity says:

    RT @Thales99: » White House Points Out How GOP Policies Caused Downgrading By S&P Liberal http://bit.ly/qfAQW5

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