FoxNews.com
President Obama is once again hitting the road or perhaps the trail to sell his financial prescription for the country. But a day after a leading agency put the U.S. government on notice that it was at risk of losing its sterling credit rating the president faces a heavy lift in convincing voters that Washington is on track toward fixing its debt problem.
Standard & Poors Ratings Service sent shock waves through economic and political circles Monday when it lowered its outlook for U.S. debt from stable to negative. Though it kept U.S. credit ratings steady the agency warned that political deadlock could compel it to downgrade Washingtons rating in just a couple years.
Anyone who has dealt with a less-than-stellar credit rating knows how that complicates their ability to obtain anything from a car loan to a mortgage. And while the White House downplays the S&P outlook others say it should serve as a wake-up call for the country to get out of debt.
No one can portray this as good news when a rating agency decides to go public with its reservations said Douglas Holtz-Eakin former director of the Congressional Budget Office during the George W. Bush administration. He said not only does this pose a credit problem for the country but it jeopardizes the ability of the United States to attract investment from job-creators.
Thats not hard for people to understand he told FoxNews.com.
Obama and his team are working hard to play down the announcement and keep spirits high about the possibility of a meaningful deficit-reduction agreement.
He was preparing to give a talk about his budget vision Tuesday morning at a community college in northern Virginia. From there he plans to speak at the Facebook headquarters in California and head next to Reno Nev. on Thursday.
The S&P announcement was in large part a political judgment -- the ratings agency based its assessment on the sentiment that a budget agreement addressing the countrys long-term deficit and debt problem might not be reached until after the 2012 election. The Obama administration claims the atmosphere for consensus is better than S&P predicts.
We think that the political process will outperform S&P expectations White House Press Secretary Jay Carney said Monday. He said both parties agree on a long-term deficit-reduction target of about $4 trillion -- Obama is looking to achieve that in 12 years while Republicans are shooting for a little bit more than that in 10 years -- and that they can find common ground on how to reach it.
A statement that observes the fact that there is often gridlock in Washington and that the contentiousness between the two parties sometimes prevents us from getting things done is not one we would disagree with Carney said. But the fact is ... when the issues are important history shows that both sides can come together and get things done. President Ronald Reagan did that with Tip ONeill Democratic speaker of the House. President Bill Clinton did it with Newt Gingrich Republican speaker of the House. President Obama did it 10 days ago with John Boehner Republican speaker of the House. We can do it again.
Treasury Secretary Tim Geithner in an interview with Fox Business Network Tuesday morning said there is no risk the country will lose its AAA credit rating.
Republicans though do not appear to share that optimism absent an agreement that ties big spending cuts to a looming vote on whether to raise the countrys $14.3 trillion debt ceiling. The White House does not want the debt-ceiling vote contingent on a spending agreement but Republicans are pushing to link the two.
House Republican Leader Eric Cantor R-Va. in a pre-buttal to Obamas deficit talk in northern Virginia wrote in the Culpeper Star-Exponent newspaper Tuesday that the country is at a crossroads. He championed the GOP budget proposal which would make major changes to Medicare and Medicaid.
Today President Obama will come to Virginia to deliver the latest in a series of speeches high on partisan attacks low on solutions Cantor wrote. Mr. President during your historic bid for the White House you promised to change the way Washington works. But theres no greater manifestation of the business-as-usual mentality than punting tough decisions and attacking those offering serious solutions.
