- Title: USA: Republican presidential candidates blame Obama for credit rating downgrade
- Date: 7th August 2011
- Summary: NEW YORK, NEW YORK, UNITED STATES (AUGUST 02, 2011) (REUTERS) VARIOUS EXTERIORS OF STANDARD AND POOR'S BUILDING
- Embargoed: 22nd August 2011 13:00
- Keywords:
- Location: Usa, Usa
- Country: USA
- Topics: Economy,Politics
- Reuters ID: LVABYJRQ72KLMLWYPB366E5633SA
- Story Text: Republican presidential candidates blamed U.S. President Barack Obama on Friday (August 5) for the downgrading of the U.S. credit rating by Standard & Poor's in an unprecedented reversal of fortune for the world's largest economy.
S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about the government's budget deficits and rising debt burden. The move is likely to raise borrowing costs eventually for the American government, companies and consumers.
The decision follows a fierce political battle in Congress over cutting spending and raising taxes to reduce the government's debt burden and allow its statutory borrowing limit to be raised.
Campaigning in Iowa, former House Speaker and Republican presidential candidate Newt Gingrich called the downgrade a "sober warning".
"I think the Congress' first job and the president's first job is to focus on the economy because unless we start growing again and start employing people again, we can't solve these problems," he said.
Former Minnesota Governor Tim Pawlenty, also a candidate, laid the blame for the downgrade squarely at Obama's feet.
"It's a reflection of the failed leadership of President Obama. He really is inept when it comes to the economy. He's had over three years being president. Barack Obama's had his chance. It's not working. It's time to get a new and better direction for America and in order for that to happen, we're going to need a new and better president," Pawlenty said.
Former Pennsylvania Senator and Republican presidential candidate Rick Santorum agreed.
"The president has to be held accountable for he did not provide leadership. To this day, he still hasn't provided any kind of road map or plan to put this country back on a sound economic footing and now we're seeing the results of what a lack of leadership means to this country," he said.
On Aug. 2, Obama signed legislation designed to reduce the fiscal deficit by $2.1 trillion over 10 years. But that was well short of the $4 trillion in savings S&P had called for as a good "down payment" on fixing America's finances.
Michele Bachmann, a member of the U.S. House of Representatives, who is shaping up as a frontrunner in the race for Republican nominee, called for the resignation of Treasury Secretary Timothy Geithner.
"President Obama is destroying the foundations of the United States' economy, one beam at a time. I call on the president to seek the immediate resignation of Treasury Secretary Timothy Geithner and to submit a plan to the American people with a list of cuts to balance the budget this year, turn our economy around and finally put the American people back to work," Bachmann said.
The unprecedented downgrade of the nation's AAA credit rating by a major ratings agency comes only 15 months before the next presidential election where the downgrade and the debt will be top issues for debate.
Bitter political battles remain over the ideologically fraught issues of spending cuts and tax reform.
The compromise reached by Republicans and Democrats this week calls for the creation of a bipartisan congressional committee to find $1.5 trillion of deficit cuts by late November, beyond the $917 billion already identified. - Copyright Holder: REUTERS
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