Reactions to S&P Downgrade-August 5, 2011

Excerpt from Standard and Poor's Aug. 5, 2011 report
"United States of America Long-Term Rating Lowered To 'AA+' On Political Risks And Rising Debt Burden; Outlook Negative"
• We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating.
• We have also removed both the short- and long-term ratings from CreditWatch negative.
• 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.
• More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
• Since then, we have changed our view of the difficulties in bridging the gulf between the 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.
• The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.
candidates' statements in order received first at top

Jon Huntsman Statement Regarding the S&P Downgrade

Orlando - Jon Huntsman issued the following statement regarding the S&P downgrade:

"Out-of-control spending and a lack of leadership in Washington have resulted in President Obama presiding over the first downgrade of the United States credit rating in our history. For far too long we have let reckless government spending go unchecked and the cancerous debt afflicting our nation has spread. We need new leadership in Washington committed to fiscal responsibility, a balanced budget, and job-friendly policies to get America working again."

MITT ROMNEY STATEMENT ON S&P DOWNGRADE

Boston, MA – Mitt Romney today released the following statement on Standard & Poor’s rating downgrade:

“America’s creditworthiness just became the latest casualty in President Obama’s failed record of leadership on the economy. Standard & Poor’s rating downgrade is a deeply troubling indicator of our country’s decline under President Obama. His failed policies have led to high unemployment, skyrocketing deficits, and now, the unprecedented loss of our nation’s prized AAA credit rating. Today, President Obama promised that ‘things will get better.’ But it has become increasingly clear that the only way things will get better is with new leadership in the White House.”
Bachmann Comments on Standard & Poor's Decision to Downgrade the U.S. Credit Rating
Calls on the President to fire Geithner and submit plans to balance the budget

Dexter, Iowa - Republican presidential candidate Michele Bachmann issued the following statement in light of Standard & Poor's (S&P) decision to downgrade the U.S. credit rating for the first time in U.S. history:

“Tonight’s decision by S&P to downgrade our credit rating to AA+ is a historically significant and serious event for the United States. The United States has had a AAA credit rating since 1917. That rating has endured the great depression, World War II, Korea, Vietnam and the terrorist attacks on 9/11. 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.

“We were warned by all of the credit agencies that a failure to deal with our debt would lead to a downgrade in our credit rating, but instead he submitted a budget that had a $1.5 trillion deficit and then requested a $2.4 trillion blank check. President Obama is destroying the foundations of the U.S. economy one beam at a time. I call on the President to seek the immediate resignation of Treasury Secretary Timothy Geithner and to submit a plan with a list of cuts to balance the budget this year, turn our economy around and put Americans back to work."
Cain Responds to Credit Downgrade

(Stockbridge, GA)- Republican presidential candidate and renowned business leader Herman Cain issued the following statement in response to the Standard & Poor downgrade of U.S. credit from AAA to AA+ saying:

On Tuesday, April 19, 2011, Treasury Secretary Tim Geithner promised that America faced "no risk" of a credit downgrading. Less than six months later, he is proven shamefully wrong. As I have feared for months, the S&P has chosen to downgrade America's credit rating from AAA, which we have always enjoyed, to AA+.

Perhaps this is because the Obama Administration and Congressional Democrats never once demonstrated a willingness to propose its own ideas for meaningful spending cuts, something credit agencies signaled were necessary to redeem America's financial standing in the world.

As a corporate executive, I've rescued companies from the brink of bankruptcy and returned them to profitability. That involved balancing budgets or even creating them in the first place, something that the Democratic leadership in Congress hasn't done for 828 days. If I couldn't run companies without budgets, how can the government?

I also had to make tough budgetary cuts to save companies. Leadership is about doing what's right, even when it's difficult. But somehow, that sort of idea was never floated among those within the Obama Administration.

Now, Americans are fearful for their retirements and for their children's educational savings. This is a country known for dreamers and innovators, for thinkers and doers. And now, we are a nation living in fear.

This is a sad day for America. Such a rating is unfitting of the greatest and most prosperous nation the world has ever known. And such a weak leader is, as well.
Santorum Comments on Downgrade of U.S. Debt

Urbandale, IA - Former Senator Rick Santorum (R-PA) made the following statement in response to S&P's decision to downgrade U.S. debt from AAA Rating.

 

"If this downgrade holds, then it's another example in a long line of examples of the President's failure of leadership. Is anyone surprised at this point? There are 14 million people out of work and looking to the White House for answers - but they are receiving nothing but a blank stare.  The markets are scared and the credit downgrade has happened because the President and this Congress continue to address the symptoms and not the disease.  This nation is spending more money than it takes in and the world knows it - now, it's time to show the world that the United States has the fortitude and resolve to pass a Balanced Budget Amendment to stop out of control spending and shrink the scope of government once and for all. The deal the President cut with Congress was supposed to avoid this downgrade but all it did was once again kick the can down the road.  
 
President Obama and his Administration have been a failure.
 
I understand the US Treasury is going back to Standard and Poors to say that a two trillion dollar mathematical error by S&P contributed to the downgrade. So, in addition to blaming President Bush for all of its problems, now the White House is blaming S&P - but this happened on the President's watch - and he has to deal with it. I guess President Obama is left to cling to the "hope" that a mathematical error caused this. Is that the "hope" the President was talking about?
 
Folks, an AA rating should be so far in our rear view mirror that no mathematical error should affect it.  
 
Tonight, I'm saddened for the millions out of work - but I'm hopeful that I will replace Barack Obama as President and get this country and its economy moving again."

Ron Paul Issues Statement on S&P Downgrading of U.S. Credit Rating
“Washington must take heed, and act to restore America”

LAKE JACKSON, Texas – Today, 2012 Republican presidential candidate Ron Paul issued a statement in response to the credit rating agency Standard and Poor’s decision to downgrade the United States’ credit rating from AAA for the first time in history. The ratings agency has removed the United States government from its list of risk-free borrowers, citing concern about the rising burden of long-term federal debt. See comments below.
 
“We have just learned that for the first time in our history, the United States’ top credit rating has been downgraded by credit rating agency S&P.
 
“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.
 
“The ratings agencies had been warning us for some time that it is imperative upon the U.S. government to get its fiscal house in order and tackle its debt and deficit problem by taking serious steps.
 
“Unfortunately, the game in Washington has been one of partisan blaming and bipartisan out-of-control spending.
 
“America has been dealing with this severe economic crisis for years because the Washington establishment failed to focus on the true issues at hand: a declining dollar and out-of-control spending.
 
“Last November, millions of frustrated Americans let it be known that they wanted our debt crisis solved and our spending problem to end. They sent a group of new lawmakers to Washington to end business as usual.
 
“But the old crowd of elites still refuses to budge on doing everything it takes to get us out of this hole they’ve dug. Instead of real substantial budget cuts, we get minor or ‘fake’ cuts and budget tricks that may or may not happen far off into the future. We get a Congress that abdicates its responsibility to an unconstitutional ‘Super Congress’ with the power to make things worse than they already are.
 
“The American people realize that our nation can no longer afford to stay on this same path of reckless spending and follow the status quo of Washington. They will not tolerate any further ineffective stimulus schemes that do nothing to help our economy and actually do the opposite to the tune of trillions of dollars in money being spent and printed, and millions of people remaining unemployed and without much economic stability or security.
 
“If Washington refuses to take heed, there is little cause for optimism.

“Growing inflation, rising gasoline and food prices, and trillion-dollar budget deficits will all soon seem like minor issues if our nation does not immediately change our monetary and spending policies.

“We must take bold actions to reduce out-of-control government spending, and get the federal government out of the way of small business and entrepreneurs so that they can start hiring again.

“If elected President, I pledge to veto any unbalanced budget and to balance the federal budget in the first year of my term. I will fight to reduce taxes and remove unconstitutional regulations so that businesses can hire, Americans can get back to work, and our economy can truly recover.”

GARY JOHNSON SAYS CREDIT DOWNGRADE IS BAD, REASONS FOR IT WORSE

August 6, 2011, Santa Fe, NM – Presidential candidate Gary Johnson released the following statement regarding the downgrade of the U.S. credit rating by S&P:

"Losing our AAA credit rating is obviously bad.  The reasons for it are much worse, much more important, and not complicated.  Everyone from our largest creditor, China, to the 14 million Americans who are unemployed get the simple reality that a $14.6 trillion debt is unsustainable.  They also get that simply raising our credit limit is not an economic policy and certainly not a solution.  Washington can dance around reality all they want, but there is only one way to get us off the path toward financial disaster: Enact real spending cuts now -- not ten or twenty years down the road, and balance the budget."

PRESS RELEASE from No Labels

August 5, 2011
Hyper-Partisanship Downgraded America

S&P Confirms What 82% of Public Already Knew: Washington Gridlock Has Failed America

Washington, D.C. – No Labels places the blame for today’s downgrade of America’s credit rating by Standard & Poor’s squarely on elected officials on both sides of the aisle who have been unwilling to compromise, put everything on the table and tackle the tough issues facing the nation.

According to a recent New York Times/CBS News Poll, a record 82 percent of Americans now disapprove of the way Congress is handling its job (New York Times, 8/5/11).

“Today’s downgrade makes it even harder to return America to economic growth and prosperity,” said Jonathan Miller, a No Labels Co-Founder. “With higher interest rates across the board, it will be more expensive for Americans to take out a mortgage, borrow for college or pay their credit card bills.”

“The inability of Washington elected officials to make the tough but necessary choices to put our nation on a sustainable fiscal path has shaken the stock market, harmed our already fragile economy, and now resulted in the first credit rating downgrade in the U.S. government's history," said Dave Walker, a No Labels Co-Founder. “Enough. Listen to America. Start making the tough choices necessary to restore fiscal sanity by promoting progress over partisanship and the greater good over the special interests.”

No Labels is a national citizens' movement of Republicans, Democrats and Independents that urges bipartisan cooperation in the interest of common sense solutions.

To arrange an interview with a No Labels Founding Leader, please contact Josh Zeitlin at press@nolabels.org or (202) 588-1990. To learn more about No Labels, please visit www.NoLabels.org.

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