Unsurprisingly, Republican politicians like Ed Martin and Vicky Hartzler see the S&P downgrade of the United States’ credit rating as nothing more than reinforcement for the stubborn stance on fiscal policy. However, the S&P’s statement on the debt downgrade suggests that a more aggressive debt reduction plan, similar to the one advocated for by President Obama, could help stabilize our country’s debt situation.
Here is what Ed Martin had to say in a statement, which disregards all the spending during the Bush administration and the call for an end to outrageous political posturing:
The reckoning is on its way, and congress did nothing more than what it always does – spend money today, promise cuts tomorrow. For decades this has been the case, and the President's party's intractable desire for more spending destroyed an opportunity to take appropriate action.
And Vicky Hartzler took to Twitter to provide some spin about why her vote against a deal to raise the debt ceiling and cut spending is exactly what S&P wanted:
S&P's decision to downgrade our credit rating is no surprise: the debt ceiling package wasn't big enough--one reason I voted 'no'.
UPDATE: It seems Billy Long didn't look too closely at S&P's downgrade justification either.
In reality, S&P suggests that letting the Bush tax cuts on the highest earners expire would be a step that could help stabilize the United States’ debt situation.
On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction--independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners--lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government's debt dynamics, the long-term rating could stabilize at 'AA+'.
If only Republican Congressional leaders like Eric Cantor didn’t take revenue increases off the negotiating table, maybe we could have avoided a downgrade all together.