The AAA Credit Rating Lie: Is Obama Responsible for the S&P Downgrade?

THE LIE

This is a lie told by many, but let’s use the words of the Republican vice presidential nominee. Paul Ryan said during his Republican National Convention speech on Wednesday that Obama’s presidency “began with a perfect triple-A credit rating for the United States; it ends with a downgraded America.” The obvious implication being that Obama is responsible for the downgrade. But is President Obama really culpable for the Standard & Poor’s credit rating downgrade?

THE TRUTH

The Bush tax cuts and the Republican refusal to raise taxes (to reduce the deficit) is the real reason S&P downgraded the credit rating for the United States. Don’t believe me? You don’t have to. Read the report from S&P.

Here’s an excerpt:

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. – Standard & Poor’s

And another:

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. – Standard & Poor’s

It’s not out of control spending by Obama (another Republican lie) that is responsible for the downgrade, instead its an inability for lawmakers in Washington D.C. to tackle the problem. Any serious attempt to take on the debt and deficit will need both spending cuts and new revenue. President Obama and Democrats are willing to cut spending and increase taxes. Republicans are only willing to cut spending. All elected officials have a stake in this, but the stubborn refusal of the Republican Party to consider any tax increases, along with the Tea Party Republican attempt to stop a debt limit increase, creates an air of uncertainty around American’s resolve to meet its debt obligations. It is that uncertainty that prompted S&P to downgrade the credit rating.

– Beat that with a stick –

 

Right-Wing Lies: A Left Call series debunking the mountain of conservative and Republican lies, one-at-a-time.

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