Entries in Debt Crisis (7)


Aide: Senate Banking Committee "Looking into" S&P Downgrade

President Obama makes remarks about the S&P downgrade on Monday, August 8. ABC News(WASHINGTON) -- The Senate Banking Committee says its looking into Standard and Poor's downgrade of the U.S. credit rating, an aide has confirmed to ABC News.

However, the aide stressed the committee has yet to announce an official probe or investigation into last week's decision to strip the U.S. of its top-AAA rating amid debt and economic unrest in Washington.

According to the aide, the committee “is looking into the issue and gathering more information."

President Obama addressed S&P's decision to downgrade the country's credit rating Monday.

"No matter what some agency may say, we've always been and always will be a triple-A country," Obama said.

Obama said he hoped the unprecedented downgrade of U.S. debt -- right or wrong -- would instill a "renewed sense of urgency" in Republican and Democratic leaders who are tasked with reaching a $1.5 trillion deficit reduction plan before the end of the year.

Copyright 2011 ABC News Radio


GOP Candidates Blame Obama for Credit Rating Downgrade

TIM SLOAN/AFP/Getty Images(AMES, Iowa) -- Ahead of a big week in Iowa, Republican presidential candidates were abuzz with news of bond rating agency Standard & Poor’s decision to downgrade the U.S. credit rating Friday.

Statements from the GOP competitors tied the fallen status to high unemployment, big government and “unsustainable debt.”

Most of the presidential hopefuls blamed President Obama for the downgrade and called – unsurprisingly – for new leadership.

“Tonight, I'm saddened for the millions out of work - but I'm hopeful that I will replace Barack Obama as President and get this country and its economy moving again,” Rick Santorum said in a statement released Saturday.

At an appearance in Concord, N.H. Monday morning, Mitt Romney said he did not think the downgrade was “simply the president’s fault,” the Boston Globe reported.

Romney went on to say that though excessive spending by Democrats and Republicans alike had worsened the economy, during the time Obama has been in office, "this President is primarily responsible for the failure of this economy to reignite and for his own failure to take the action which is so obviously needed to restore our balance sheet."

"Standard and Poor’s did not surprise anybody with this downgrade," Romney said.

Several candidates also cited a lack of immediate spending cuts in the debt ceiling deal as cause for the loss.

“As I have feared for months, the S&P has chosen to downgrade America's credit rating from AAA, which we have always enjoyed, to AA+. Perhaps this is because the Obama Administration and Congressional Democrats never once demonstrated a willingness to propose its own ideas for meaningful spending cuts, something credit agencies signaled were necessary to redeem America's financial standing in the world,” Herman Cain said in a statement.

Santorum, Michele Bachmann, Gary Johnson and Jon Huntsman all used it as an opportunity to relaunch the idea of a balanced budget.

“This nation is spending more money than it takes in and the world knows it - now, it's time to show the world that the United States has the fortitude and resolve to pass a Balanced Budget Amendment to stop out of control spending and shrink the scope of government once and for all,” Santorum said in a statement.

Though Bachmann did not ask for a change up in executive leaders, she called on Obama “to seek the immediate resignation of Treasury Secretary Timothy Geithner.”

White House Press Secretary Jay Carney has since said that the president has asked Geithner to stay on as Treasury Secretary, and Geithner released a statement on Sunday saying he would not leave.

Copyright 2011 ABC News Radio


Cut, Cap and Balance Coalition Won't Support New Debt Deal

MANDEL NGAN/AFP/Getty Images(WASHINGTON) -- As Speaker Boehner struggles to round up the votes needed to pass the new debt ceiling deal in the House, a coalition of conservative groups and lawmakers have already rejected the proposal.

This statement by the conservative Cut, Cap and Balance coalition certainly won’t help him pick up any Tea Party hold-outs:

"We applaud the efforts of the Speaker and Minority Leader to craft a passable solution despite a Senate majority that valued politics over prosperity and a White House that never presented any solution to the problem.  However, the Cut, Cap, Balance Coalition will not support this bill because it clearly fails to meet the standards of the Cut Cap Balance Pledge...The most glaring shortcoming is that the second debt ceiling increase in this package isn’t tied directly to Congressional approval of a balanced budget amendment as a pre-condition.  It may therefore be avoided altogether."

The Cut, Cap and Balance Coalition is an organization of more than 100 conservative groups and several dozen lawmakers in both chambers who have called for passage of a balanced budget amendment in exchange for a vote to raise the country’s debt ceiling.

Copyrights 2011 ABC News Radio


President Announces Agreement on Debt Deal

The White House(WASHINGTON) -- Faced with a looming economic crisis, the president announced Sunday evening in an address to the nation that “the leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid default.”

With just two days left to raise the nation’s $14.3 trillion debt ceiling, the president urged members of both parties to “do the right thing” and support the deal.

The agreement cuts roughly $1 trillion is spending over the next ten years and establishes a bipartisan committee to report back by November with a proposal to further reduce the deficit, which will then be put before an up or down vote, according to the president.

The following is a portion of the press release outlining the agreement:

The debt deal announced today is a victory for bipartisan compromise, for the economy and for the American people. The agreement:

•    Removes the cloud of uncertainty over our economy at this critical time, by ensuring that no one will be able to use the threat of the nation’s first default now, or in only a few months, for political gain.

•    Locks in a down payment on significant deficit reduction, with savings from both domestic and Pentagon spending, and is designed to protect crucial investments like aid for college students.

•    Establishes a bipartisan process to seek a balanced approach to larger deficit reduction through entitlement and tax reform.

•    Deploys an enforcement mechanism that gives all sides an incentive to reach bipartisan compromise on historic deficit reduction, while protecting Social Security, Medicare beneficiaries and low-income programs;

•    Stays true to the President’s commitment to shared sacrifice by preventing the middle class, seniors and those who are most vulnerable from shouldering the burden of deficit reduction. The President did not agree to any entitlement reforms outside of the context of a bipartisan committee process where tax reform will be on the table and the President will insist on shared sacrifice from the most well-off and those with the most indefensible tax breaks.

Copyright 2011 ABC News Radio


Nancy Pelosi Statement on Debt Deal

JEWEL SAMAD/AFP/Getty ImagesWASHINGTON -- Democratic Leader Nancy Pelosi released the following statement after the President's speech Sunday on the ongoing talks to avert a default crisis:

"We all agree that our nation cannot default on our obligations and that we must honor our nation's commitments to our seniors, and our men and women in the military.

"I look forward to reviewing the legislation with my Caucus to see what level of support we can provide."

Copyright 2011 ABC News Radio


Frustration in the Senate

Architect of the Capitol(WASHINGTON) --The action on the debt debate is in the House, where lawmakers are set to vote Friday evening on House Speaker John Boehner’s updated debt ceiling proposal. But even if that proposal can muster the 217 votes, likely all Republican, it’ll need to pass the House.

Boehner’s proposal seems doomed to fail in the Senate, where the Democratic majority leader, Harry Reid, D-Nev., called it "Dead on Arrival."

All 51 Democratic Senators, and two Independents who caucus with the Democrats, showed a united front in a letter sent to the Speaker of the House Wednesday evening that they will vote no to Boehner’s  bill.

In a move to demonstrate the Boehner bill, even if it does pass in the House, will not go farther than that in its present form, the senators say the short-term extension in the bill “would put America at risk.”

“Your approach would force us once again to face the threat of default in five or six short months,” the letter says, “Every day, another expert warns us that your short-term approach could be nearly as disastrous as a default and would lead to a downgrade in our credit rating.  If our credit is downgraded, it would cost us billions of dollars more in interest payments on our existing debt and drive up our deficit.  Even more worrisome, a downgrade would spike interest rates, making everything from mortgages, car loans and credit cards more expensive for families and businesses nationwide.”

At a press conference Thursday, Senate Majority Leader Harry Reid left the door open to perhaps making changes to the Boehner plan and then perhaps bringing that up for a vote. But there is no firm word this is what he would do, should the Boehner plan pass in the House when it is voted on Friday night.

Frustration is rampant in the Senate as the deadline for default ticks closer with each day.

Senator Al Franken, D-Minn., used a snarky visual aide Thursday -- a bold sign that read, “WELCOME TERRORISTS” -- to demonstrate that if a deal is not passed come August 2, federal government employees including counterterrorism agents in the FBI and border agents would not be paid.

Democrat Barbara Mikulski, D-Md., pleaded  for members of Congress to realize the stakes, adding that she could add “even more intense language” than “what the heck is this?”

Republican Senator Isakson, R-Ga., described the impasse with a silly word: “dillydally,” and called next Tuesday the “day of reckoning.”

Senator Webb, D-Va., who fought in Vietnam as an infantry Marine, drew on a story from the Vietnam War to warn the Republicans not to “destroy the American economy in order to save it.”

Senator Coburn, R-Okla., said calmly but sternly, “We’re not listening. We’re not paying attention to the anxiety, fear.”

The debate continues on the Senate floor as negotiations rage behind closed doors on the Hill.

Copyright 2011 ABC News Radio


White House Official: 50-50 Chance Debt Crisis Will be Solved by Aug. 2

(Stephen Chernin/Getty ImagesWASHINGTON) -- Financial markets around the world opened with unsettled anxiety Monday, feeling the ripple effect of U.S. politics as the pressure is on for Washington to settle a deal to avoid a major debt crisis. 

A senior White House official tells ABC News there’s a 50 percent chance the issue will be resolved by this time next week -- just one day before the federal government may officially go broke.

Aug. 2 marks the day the federal government will run out of money, Treasury Secretary Tim Geithner has said.

Like a ticking time bomb, the pressure is on raise the debt ceiling before Aug. 2.

The challenge remains finding a middle ground for Democratic and Republican cooperation.

Senate Majority Leader Harry Reid’s deficit reduction proposal is an area of contention for both parties, as Republicans feel the solution to the $2 trillion debt reduction is riddled with “gimmicks,” while Democrats say Rep. Paul Rep. Paul Ryan’s GOP budget plan is very similar -- relying on troop withdrawal in Iraq and Afghanistan to promote savings.

As Washington wades in uncertainties, one thing is clear: for a decision to be made come Aug. 2, compromise will have to be the name of the game.

Copyright 2011 ABC News Radio

ABC News Radio