Ben Johnson,The White House Watch
Obama scored another historical first on Friday,becoming the first president to see the U.S. credit rating downgraded by Standard &Poor’s,from AAA to AA+. While we hope his presidential reign lasts no longer than January 2013,Americans may have to live with the consequences of Obamanomics for more than a decade to come. The chairman of Standard &Poor’s sovereign debt ratings,John Chambers,told ABC’s This Week program on Sunday the United States could be stuck with the lower credit rating between nine and 18 years. “We’ve had five governments that lost their AAA that got it back,”he said. “The amount of time that it took for those five range from 9 years to 18 years.”He forecast that digging America out of the debt ditch “could take awhile,”and that it would require two things:“a stabilization of the debt as a share of the economy and eventual decline”and “more ability to reach consensus in Washington than what we’re observing now.”
The president’s commitment to deficit spending and unwillingness to make enforceable budget cuts leave a grim prognosis. But the outlook gets worse. As this author noted Friday,there is a chance America will be downgraded yet again. Chambers placed the odds of a future downgrade at one-in-three. Scoring a AA rating would place the Land of the Free on equal terms with Spain and Qatar.
These realities had Obama in full Alinsky mode during his 1 p.m. speech (which took place at two o’clock this afternoon). He opened by saying,while Tea Party intransigence forced S&P to cut our debt rating,“The markets,on the other hand,continue to believe our credit status is AAA.”To bolster his case,he added,“Warren Buffett,who knows a thing or two about good investments,said,‘If there were a quadruple-A rating,I’d give the United States that.’”Even as he spoke,the stock market was in free fall. The Dow Jones industrial average fell 634.76 points this afternoon. The slide capped off a string of losses so severe that CNBC reports,on this eighth day of the month,“August is already on track to be the worst month for the S&P  and Nasdaq since Oct. 2008,”the first full month of the economic meltdown. And despite earning the Obama administration’s seal of approval,Standard &Poor’s marked down Buffett’s Birkshire Hathaway holding conglomerate from “stable”to “negative”today.
Obama’s Surrogates Savage the Savers
Democratic talking heads did their best to pin blame on their political opponents. This weekend,both David Axelrod and Sen. John Kerry repeated the phrase “Tea Party downgrade.”
Treasury Secretary Tim Geithner eschewed presidential responsibility,as well. “Congress ultimately owns the credit rating of the United States,”he said. This would be true in the sense that Obama offered absolutely no leadership during the debate and presented no plan of his own but would overlook the president’s addiction to deficit spending and hostility to fiscal (or political) responsibility. Geithner,suddenly discovering the Founding Fathers,noted Congress has “the power of the purse in the Constitution.”That fact did not keep Geithner from publicly musing about having Obama unilaterally raise the debt ceiling in late June,leading to a chorus of Democrats demanding the president invoke the 14th Amendment to claim the power of the purse as his own.
Not everyone is reading from the same script,though. As usual,Bill and Hillary Clinton have taken the crisis to spin things in their favor. The Hill newspaper reports former Clinton administration appointees,who insisted on remaining anonymous,said Obama….