Moody's Investor Service warned yesterday it would likely downgrade the U.S. government's debt unless policymakers in Washington reached an agreement on debt reduction. It's not altogether clear what has Moody's spooked -- if there's no deal, there would be large tax increases and spending cuts that would lower the deficit in a hurry.
Nevertheless, the warning served as a reminder of the looming deadline and the need for some kind of resolution. House Majority Leader Eric Cantor (R-Va.) appeared on CNBC yesterday to once again say his Republican caucus won't accept a compromise that raises taxes on anyone.
As Annie-Rose Strasser noted, Maria Bartiromo asked Cantor, "So what are you willing to give on, congressman? When you look at what the two sides are, basically sticking to their guns, can it really be realistic to say taxes can never go up, that, you know, taxes should stay where they are forever in any environment? What are you willing to give on?" The Republican leader replied, "[R]aising taxes is not the answer. We all know that."
It's worth clarifying that Cantor's response is all-encompassing -- he says he wants to reduce the debt, but he also says that it's completely unacceptable for any tax on anyone to go up any amount at any time for any reason. Full stop.
Reporters asked House Speaker John Boehner (R-Ohio) yesterday about the prospects of some kind of agreement. "I'm not confident at all," Boehner said. For a change, I'm inclined to agree with the Speaker.
In case anyone's forgotten, without an agreement, Bush-era tax breaks will expire on Jan. 1, and massive spending cuts, demanded by congressional Republicans as part of last year's debt-ceiling agreement, will kick in automatically. Democrats have said they're open to a "balanced" compromise -- some spending cuts, some tax increases on the wealthy -- but for now, the GOP isn't interested in a deal.
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Any such downgrade would mean the same thing the last one did, absolutely nothing. Rating agencies' take on the sovreign debt of major nations means less than zero, except as over-hyped media stories.
You will notice that the markets were up, not down yesterday in response.
Yawn.
If it raises the interest rate on money we have borrowed then it certainly does mean something. It means, at least as I understand it (and I am no expert) that more of our tax dollars will go towards interest and less will go towards our country, and services we rely on.
It did not raise the interest rate last time. And I'm not certain that money already borrowed at a certain rate can have that rate changed -- anyone know?
It may not go up for the money already borrowed, but for future money which is constantly needed, it will definitely go up! The bullies are once again counting on the democrats to blink. Don't blink, let it go up, and vote these bullying traitors to US out in November!
terriels:
It did the oppsite. It made borrowing costs much cheaper for the US.
zora:
sorry your interpretation is incorrect.
Moodys? Moodys? Where have I heard that name?
Oh, yes- "These credit default swaps are Triple A+++ Good Housekeeping Guaranteed to be a fine pension fund investment! But wait- there's more! Buy one now, and get a futures option on some Dutch Tulip Bulbs!"
lolz!
Ignoring the intransigence of a partisan effort in the face of a diminishing middle class ...
Yawn ...
Konszeqwuences Smoscheqwuences , he he he .
For a political group like the Republicans, so devout in their superficial admiration of our Founding Fathers, designers of a system of government built on compromise, they sure know how to screw up our founders intent with their conversion over to their parliamentary style of governing. So European. Jefferson, Adams, et al are rolling in their graves at the their abandonment of our nations original governing principles.
So, when Republicans start wars that cost trillions of dollars, how are we supposed to pay for them?
Forget about Sept. 11? I believe the terrorists began the war. I believe I heard Tom Brokaw on the replay of the Today show from 9/11/01 say, "The terrorists have declared war on the United States." It's amazing how soon people forget.
scott19 - Sept 11 should have resulted in the war in Afghanistan. There should not have been a war in Iraq. Bush's desire to avenge his daddy's inability to take out Saddam cost us dearly in terms of our debt and American lives. And it had nothing to do with 9/11 or WMDs.
OK, let me re-phrase that: When Republicans engage in wars that cost trillions of dollars, how are we supposed to pay for it?
I believe it takes two sides to compromise... usually if one side refuses to compromise on one point, the other side is refusing to compromise on the same point. Bashing Republicans doesn't solve anything either. Democrats have just as much blame for the mess in Washington. Vote them all out and replace everyone.
Democrats went to the table offering cuts on entitlements and social spending in exchange for raising tax rates on the wealthy. They were willing to compromise. But compromise isn't giving in to what the other side wants without getting anything in return. Democrats would have supported Obama's $4T debt reduction plan that had about 3:1 spending cuts to taxes. They're not the intransigent ones.
Obama has said he is willing to compromise. The Republicans have said they are not.
The problem is history. Every time an agreement is made to cut spending & increase taxes the following happens. First, the tax increases are put into place immediately and the spending cuts are planned to take effect over many years. As the cuts are to take effect the congress backs off of the commitment & the cuts never go into effect.That is why the medicare "savings" will never be seen,it's a dishonest play by the administration. Anyone hear of the "doctor fix", it's the same thing, you say you are going to cut but when they come do, either don't pass them or pass a law revoking them. It's sad! Our leaders have no gut to do the right thing!
"It's not altogether clear what has Moody's spooked."
Methinks it is the dickface that is on the opening screen of the video
Another example of GOP exempt-tionalism, and petty, pseudo-ideological governance. The Teatards and Grover (the big homo) have taken your entire party down folks! You're running on extremist fumes but is it really necessary to drag your comrades (I know, socialist of me..) down for your self immolation?
The plain fact is, that no compromise will be reached before the November election. That leaves at least 6 weeks to do the deal. And although the Congress has the ability to take months to accomplish nothing, we all know that a deal can be struck in a matter of days if necessary.
Various factions are drafting different proposals already. But no one will agree to anything until the outcome of the election is known. And Tea-Party republicans, in particular, are not going to even hint at compromise before the election, for fear of being voted out of office.
So whether Moody's matters or not, whether the credit rating matters or not, ain't nothin' gettin' done until November. More likely December.
The sad thing is, they should be voted out of office because they won't even hint at compromise. But they won't be. And when Obama wins re-election, they will do the same thing they did before; refuse to compromise. There is principle, and there is stupidity that hurts the common man. The Tea Party is mistaking one of those for the other.
The Republicans are gambling that they are going to be in a better position to negotiate after the elections. If they are wrong, then they are going to be responsible for taxes going up and that is not going to make their campaign contributors happy. If the Dems are in a stronger position to negotiate after the elections, then they can take the position that they have been willing to compromise at the same time they are negotiating with hardball tactics. That can be accomplished by Dems telling the "big money" people, in private, that Republicans are holding out for a better deal and the longer they hold out, the less likely Dems are going to keep their offer on the table. Any subsequent offers will be less generous. This puts pressure on the Republicans to take the offer because their campaign contributors will force the deal at the same time the public is angry about more Republican obstruction. Two guns to the head are better than one.
The problem with Cantor isn't the fact that he doesn't want to raise taxes. It's the fact that Eric is an idiot. Most of Eric's ideas and over half the things that come out of his mouth, just defy logic at times.
Let the tax cuts expire. They were never intended to be permanent anyway; they were intended to spur the economy post-9/11. The longer they got extended, the more damage they did to our fiscal health. And it's been shown (by Benen and others) that the longer we keep them, the further into debt we will go.
Wasn't it the Republicans last year arguing that NOT extending the cuts amounted to RAISING taxes? Now they seem to be in favor of raising taxes on middle-class families by not making a deal to keep those tax rates in place. So this "raising taxes is not the answer" bs flies in the face of their own rhetoric since their inaction is about to raise them anyway.
While nearly all politicians fear being voted out of office, it seems that the TPutty gang have no spine at all. There is no allegiance to America and no courage to lead their party out of the radical free fall that may make their party obscure in the near future.
REAL Republicans, (you know, the ones we used to have, who worked across the aisle for the good of the country regardless of who was in the White House) need to stand up and say "Hey - Tea Party - you are no longer part of the Republican Party. You are now your own party. Good luck."
I'll still vote Democratic, but this obstruction/do-nothing-practical nonsense has to stop, as Colonel Potter used to say, "toot sweet!"
he is such a weasel
United in foreign affairs abroad and common decency at home?
Rather than put non-existent words into the President’s mouth over the ruthless murder of members of our diplomatic corps in Libya, it would have been nice if MItt Romney could have dug up a bit of patriotism and stood united with the Americans people against this criminal outrage abroad and also shown concern and compassion at home over the crushing loss of the loved one’s of fellow citizens.
At a time when people in service to our country in dangerous settings have made the supreme sacrifice and their loved one’s need most our loving concern, is Romney also going to try to convince these mourning survivors that their president does not care about their grievous loss?
One can wonder if Romney has an ounce of decency---good God, has the man no shame?
Today Romney rendered an extraordinary bit of confabulation over his Libya journey into the sewer. Positioned between two American flags in his very best imitation of a presidential setting, he said what President Obama had said in the beginning: expressing high sound condolences to the loved ones, posthumously issuing his piously intoned thanks to the heroic fallen for their loyal service of paying the ultimate price for standing in harm’s way (this now long enough after the tragic affair that their funerals may have already been conducted), and makes it clear to all would be villains in the entire universe that this nation stands unswervingly united as a people that will not tolerate any kind of assault on our people and country.
THEN he schmooze in a twist to his original misattribution of words that did not come from President Obama but which Romney had said had disgusted him so thoroughly. To cover his blunder, Romney quickly slips in a toned down versions or his original accusation and in passing quickly on, Romney suggests that the administration was wrong because someone else had said something unapproved when they had been in a tense and hostile situation in Egypt.
Only Saturday Night Live might be able to touch this with an hour-long version of an old if-you-won’t-believe-that-would-you-believe-this joke.