Anger Over Credit Rating Resurfaces in Washington

New York Times ^ | August 6, 2011 | LOUISE STORY, JULIE CRESWELL and GRETCHEN MORGENSON

[reaganaut1]

The frustration in the air was palpable. Officials from the credit ratings agency Standard & Poor’s were meeting with Congressional leaders on a stifling late day in late July to discuss the thorniest issue in Washington: the effort to cut the nation’s deficit and raise the borrowing limit to avert a default.

S.& P. and two financial industry groups listened to various proposals for debt reduction and warned the lawmakers of the impact a default would have on world markets, according to a Congressional staff member in attendance. The staff member said the agency was providing guidance on what target to hit in budget savings, but lawmakers struggled to understand the agency’s views.

Since that meeting, several lawmakers have publicly questioned whether the ratings agencies have the competence to evaluate the country’s finances, and whether it was appropriate for them to be so deeply involved in discussions of fiscal politics. The criticism reached a fevered pitch after S.& P. announced Friday night that it was downgrading America’s credit rating, a decision that thrust the ratings agencies to the center of the debate over the government’s budget, and prompted renewed scrutiny of an industry that has been harshly criticized since the financial crisis.

The ratings agencies’ purview is traditionally viewed as evaluating data and revenue projections for debt issuers, but they have long taken governance into account for ratings of sovereign nations and corporations. In its announcement Friday night, S.& P. cited the political gridlock in Washington during the debt limit debate as a main reason for its decision. “The gulf between the political parties,” S.& P. said, had reduced its confidence in the government’s ability to manage its finances.

[reaganaut1]

The politicians are shooting the messenger. When you are borrowing 40 cents of each dollar you spend, you are NOT AAA.

[Opinionated Blowhard]

This is like a junkie being angry at his family for not bailing him out of the debts he ran up on drugs. The answer is crystal clear—cut spending—yet there is no political will to do it.

[Hang'emAll]

several lawmakers have publicly questioned whether the ratings agencies have the competence to evaluate the country’s finances................

I think the S&P people are terrorists questioning our lawmakers absolute knowledge and their views should not be given equal time on the MSM. /sarc

[Conservativegreatgrandma]

This should be looked at as a gift and an opportunity to make some real deep cuts and blame it on Moodys. It’s time for entire departments to disappear. We’ll be better off without the dept. of ed for starters.

[SkyPilot]

Anger Over Credit Rating Resurfaces in Washington

I am in deep fear of where we are right now. I believe the stock market may crash on Monday. I know what the downgrade means - the cost of financing our soon to be $15 Trillion Dollar debt is going to eat up a much larger portion of our Federal budget.

There is a lot of blame to go around. The "Prescription Drug Benefit" that GW Bush and a Republican Congress pushed through was criminal - it has cost us dearly.

But, the majority of the blame goes to the Democrats and those who are greedy entitlement collectors, lazy welfare breeders, 99ner unemployment check direct deposit queens, Food Stamp schemers, and all the rest.

Entitlements are breaking our back, and no one will do anything about it.

[EBH]

but lawmakers struggled to understand the agency’s views.

The republicans and tea party understood...the democrats so very obviously didn't.

Now the other line about the politics of the matter...the S&P correctly identifies the “The gulf between the political parties,” as the reason for the default. The political party in the majority, wielding control, is not the party that understands what must be done. It is the lawmakers who struggled to understand that are in charge. And like petulant pre-teens they don't understand the words, No mo' money.

[johnandrhonda]

I think the credit rating agencies are a bunch of idiots. The US borrows 40 cents for every dollar they spend....so why did they have an AAA rating? Rating should have been lowered years ago.

[factoryrat]

Yep, pretty much sums it up. Look for some retaliation against the ratings agencies by the feds in the not-too-distant future.

[Mobties]

I’m reminded of a particular Chic Young’s comic strip, “Blondie” — Blondie Bumstead is incredulous that she could be overdrawn at the bank when she still has ten checks left in her checkbook.

Sorry, I couldn’t find the cartoon.

[rodguy911]

The NYT is obviously on the way down.

They know better about everything as do many of their readers. I guess its beyond their realm to try and understand that when you spend 300 billion every month and only take in 180-200 things will crash.

It's just not pc enough or Gucci enough for them to comprehend.

I hope they understand what it means when people stop reading their biased rag, hopefully that will touch home.

[pieceofthepuzzle]

“several lawmakers have publicly questioned whether the ratings agencies have the competence to evaluate the country’s finances................”

Right. Not very long ago a US Congressman stated that he worried adding more military people to an island might make it tip over and sink. How dare anyone question the knowledge and opinions of the elected few?

[Paladin2]

It’s interesting that the b0z0s in DC are more attentive to the ratings agencies than to the People.

[Track9]

“The gulf between the political parties,” is a BS explanation. That would mean if there wasn't any 'gulf' and the Dims could spend indefinitely, S&P would be okay with that..? I don't think so.. and it's not what the S&P guys were saying either.

We all know what the problem is.. and it ain't the people wanting to cut spending.

[denydenydeny]

lawmakers struggled to understand the agency’s views.

But not too hard, apparently.

[oblomov]

Be Angry At The Sun

That public men publish falsehoods
Is nothing new. That America must accept,
Like the historical republics, corruption and empire
Has been known for years.

Be angry at the sun for setting
If these things anger you. Watch the wheel slope and turn,
They are all bound on the wheel, these people, those warriors.
This republic, Europe, Asia.

Observe them gesticulating,
Observe them going down. The gang serves lies, the passionate
Man plays his part; the cold passion for truth
Hunts in no pack.

You are not Catullus, you know,
To lampoon these crude sketches of Caesar. You are far
From Dante’s feet, but even farther from his dirty
Political hatreds.

Let boys want pleasure, and men
Struggle for power, and women perhaps for fame,
And the servile to serve a Leader and the dupes to be duped.
Yours is not theirs.

-Robinson Jeffers (1941)

[SkyPilot]

but lawmakers struggled to understand the agency’s views.

You picked up on that too? Good for you. So did I.

It jumps from the page of the NY Slimes article, and immediately comes across as disingenuous garbage and evil "spin."

The Democrats knew exactly what the ratings agencies were saying. So did the NY Slimes.

Now that the blood is on the floor, the Democrats are running for cover. Our ship is aground, and the Democrat-manned crew took to the life boats before the passengers could even get off.

[AD from SpringBay]

It’s interesting that the b0z0s in DC are more attentive to the ratings agencies than to the People.

That's because they and their handlers are going to lose real money over this. Money always talks.

[ilovesarah2012]

Cost of Medicare’s Part D drug plan is dropping

“Popular with beneficiaries, the program has also proven far less costly than budget analysts originally expected, in part because of competition among private plans and the growing use of less expensive generic drugs.

In 2012, the average Part D plan will charge seniors about $30 a month, the Department of Health and Human Services said.

That’s down from $30.76 in 2011 and would mark the second time average premiums have declined since the drug benefit was initiated in 2006.

By comparison, overall healthcare spending in the U.S. is expected to grow by nearly 5% a year between now and 2014, according to the latest estimates by government actuaries. Premiums on many private medical insurance policies are rising even more sharply.”

http://articles.latimes.com/2011/aug/05/nation/la-na-medicare-benefits-20110805

[SkyPilot]

It’s interesting that the b0z0s in DC are more attentive to the ratings agencies than to the People.

Take a look at that pie chart I posted. The net interest on the debt is now going to eat up a lot more than the current slice.

Democrats understand this.

That is why they are in a panic.

Their only solutions (which will not solve the problem and will do great harm) is to gut defense, freeze military salaries, slash the Veterans Administration, and raise taxes.

[SkyPilot]

"Popular with beneficiaries"

I bet it is.