Saturday, August 6, 2011

After S&P downgrade, WH says 'we must do better'

President Barack Obama sought to distance himself Saturday from the bad news of the nation's first-ever credit-rating downgrade, but lawmakers and presidential candidates showed no such reticence — trading salvos over who's at fault and why.
The president, spending the weekend at Camp David, left it to press secretary Jay Carney to say it's clear Washington "must do better" in tackling soaring deficits and other economic woes.
A statement from Carney said talks that produced Tuesday's $2 trillion compromise on raising the U.S. borrowing limit had been too drawn-out and "divisive."
But the statement didn't directly address Friday's move by Standard & Poor's to drop U.S. government debt from AAA to AA+, the next level down.
While telegraphed by S&P last month, the downgrade still delivered a potentially serious blow to the nation's struggling recovery — raising the prospect of higher interest rates and fresh falls in stocks after the big selloff of the last two weeks.
S&P told investors the deficit accord "falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics."
However, administration officials sharply disputed S&P's judgment and challenged its numbers, saying the deal's deficit-cutting value had been drastically understated. They charged the company's analysis was rushed and faulty.More...

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