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Meanwhile, the three main ratings agencies reminded the nation that even the most stringent results coming from the committee’s deliberations may not be enough. Moody’s Investors Services stated the country would “probably” retain its AAA credit rating for now, but that the outlook for the future was “negative.” Fitch Ratings said its AAA rating depended on debt reaching a “more sustainable level,” while Standard & Poor’s reiterated its contention that $4 trillion must be cut from future budget deficits, or America’s rating will probably be lowered to AA. Guy LeBas, chief fixed income strategist at Janney Montgomery Scott, explained why. “The details [of the deal] don’t look as pretty as the headlines,” he said. LeBas also noted that the agencies will be less than thrilled with the idea that most of the spending cuts won’t kick in until 2013.
Yet some analysts see a silver lining in a lowered credit rating, noting that the higher interest rates resulting from a downgrade to AA would make it more difficult to borrow money. Perhaps it would, at least for consumers. But it might also make interest payments on existing debt far more onerous.
As for the economy itself, yesterday’s news was hardly comforting. U.S. manufacturers had their weakest growth in two years, and MSNBC contended that we are already entering a double dip recession. One suspects millions of Americans don’t believe we ever recovered enough to make the distinction. Either way, good news, like jobs, is in short supply.
The Senate is expected to vote on the plan at noon today. While it is expected to pass, a certain level of bitterness exists in that congressional chamber as well. “I cannot in good conscience support this deal. Simply stated, it locks us into more debt, bigger government and most devastating of all, a weakened defense infrastructure at a time when we face growing threats,” said Lindsey Graham (R-SC). South Carolina’s other senator was equally upset. “I’m not going to tell Americans that we’re doing everything when we’re not,” said Republican Jim DeMint. “We’re planning on adding another $10 trillion in debt.”
Certainly for politicians (especially those seeking re-election), to say they are unhappy with a deal that didn’t completely accrue to their side’s interests, provides far better cover than saying they had to concede on one point or another. Yet aside from the obvious political ambition that always necessitates framing any compromise in terms of “winners” and “losers,” there is a far bigger problem brewing in Washington, D.C. There are always underlying ideological limitations from which every compromise proceeds, but in the hyper-partisanship that currently dominates the nation’s capital, those limitations are becoming more and more constricting. Such constriction leads to frustration, frustration to invective.
On a day where that invective reached fever pitch, it was a pleasure to see Gabrielle Giffords in the House. One would like to think her appearance might give pause to both Joe Biden and Mike Doyle. Perhaps they might even take her statement “that crossing the aisle for the good of the American people is more important than party politics” to heart. There is a monumental amount of work to do to get this country back on track, and there will be many moments of ideological passion along the way. But passion needn’t be accompanied by puerility.
Democrats and Republicans don’t have to get along. But they can behave like grownups. That alone would be a relief to millions of Americans.
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