WASHINGTON – Minnesota GOP presidential candidates Michele Bachmann and Tim Pawlenty reacted quickly to the news that Standard and Poors downgraded the federal government’s bond rating Friday, saying the move demonstrated President Barack Obama’s lack of fitness for a second term in office.
S&P said the government was accumulating too much debt and lacked a solid path to stabilizing its indebtedness despite last week’s agreement to cut long-term spending by more than $2 trillion.
“President Obama is destroying the foundations of the U.S. economy one beam at a time,” Bachmann, who represents Minnesota’s 6th Congressional District, said in a statement. “I call on the President to seek the immediate resignation of Treasury Secretary Timothy Geithner and to submit a plan with a list of cuts to balance the budget this year, turn our economy around and put Americans back to work.”
Pawlenty continued with the theme in a speech Saturday in Grinell, Iowa.
“What he [President Obama] doesn’t understand is all this talk of the full faith and credit in the United States government, he needs to stop being reminded. We need to have a president who understands what it means to put our full faith and credit in the American people,” said Pawlenty. “His vision for America is to take things out of the private sector and to put it into the government.”
The White House responded quickly to the downgrade, criticizing S&P for faulty calculations that overestimated the amount of debt the United States would accumulate by $2 trillion.
While Bachmann and Pawlenty’s statements savaged President Obama’s stewardship of the economy, S&P’s press release explaining its rationale for the downgrade tells a different story.
While calling for additional spending cuts, the ratings agency cited political brinksmanship and the Republican-instigated standoff over the debt ceiling as key obstacles for resolving the country’s long-term debt problems. S&P was careful to note that it didn’t proscribe a particular mix of spending cuts and revenue increases, but pointed to congressional Republican resistance to raising revenues as a significant factor in its downgrade decision rather than any actions by the administration:
Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade.
Once reactions from Minnesota’s congressional delegation come in, we’ll post them on this blog as a separate entry.