The game of political chicken kabuki needs to come to an end, and soon -- because Moody's just put the hammer down on all the children.
Moody’s Investors Service warned Thursday that it might downgrade the United States government’s sterling credit rating if Congress did not increase the nation’s debt limit “in coming weeks,” putting a spur to the sputtering talks between party leaders and the White House on a plan to restore fiscal stability.
The warning, from one of the agencies whose assessments of creditworthiness help determine interest rates, amounted to a stern reminder from Wall Street to Washington that global financial markets are watching the budget battle closely and that a standoff or brinkmanship could have economic consequences.
Both sides seized on Moody’s statement to reinforce their bargaining positions, with Republicans demanding that President Obama get more serious about deep spending cuts and Democrats saying that Republicans are risking a financial crisis in pursuit of an ideological agenda.
Moody’s said a review of the credit rating was “likely” in July, given that “the risk of continuing stalemate has grown.” Its warning followed a similar one from another major ratings firm six weeks ago, and it came as the administration met Thursday with both House Republicans and Democrats in search of a deal.
As John Boehner assures the press that "nobody out there believes the U.S. is going to default on its debt, " he should tell his freshman Tea Party reps that the debt ceiling doesn't work the same as a last-minute government budget deal. It needs to get done in a timely fashion. The debt ceiling has never been a point of political wrangling or as polarized as it is now, it was just done. The press knows this for sure, but since Bush was in office then, Republicans passed it with no cares about the federal deficit. What sick times we live in.
And by the way, maybe Fox News will report this part of the federal deficit story:
Independent analyses have shown that more than half of the $14.3 trillion debt is from policies enacted during the past decade when Republicans controlled both the White House and Congress, and much of the rest from lost revenues and stimulus spending and tax cuts since Mr. Obama took office at the height of the financial crisis and recession.
And as we're mired in a slow recovery, failing to raise the debt ceiling is the worst thing that could happen to our country at the moment.
The full faith and credit of the United States is being questioned for the first time in its history. When that questioning turns to a lack of faith in this nation to pay its bills, pray.
I pray that Biden's group doesn't succumb to the pressure from Republicans and come out with some 'grand bargain' compromise over this which cuts benefits to our safety-net programs. Seniors will be devastated and all the gains the Democratic party have made this year against a backdrop of fools and lunatic right-wing governors will be lost. As usual, the Villagers have their own talking points too.
Last night David Gergen parroted the conventional wisdom that says while the economy may be getting worse the president simply must agree to build in long-term debt reduction with the entitlements right now. He didn't say why.
So that's that.