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TheDC’s Jamie Weinstein: It was no ‘tea party downgrade’
Posted By Jamie Weinstein On 10:19 PM 08/08/2011 In Blog - Jamie Weinstein | 77 Comments
Democrats are in a panic to pin the first ever Standard & Poor’s downgrade of America’s credit rating on Republicans — particularly tea party Republicans.
On Sunday, Massachusetts Democratic Sen. John Kerry and Obama campaign strategist David Axelrod deemed the downgrade the “tea party downgrade” on morning talk shows. MoveOn.Org later sent out an email using the same phrase.
On Monday, the Nation’s Ben Adler opened up his article on the downgrade with this definitive declaration: “It is clear from Standard & Poor’s statement downgrading the federal government’s credit rating that it places the blame squarely on Republican actions and policies.” (RELATED: Standard & Poor’s ratings head: U.S. could be downgraded even further)
There is only one problem with this narrative: It’s not true.
Maybe Ben Adler isn’t a good reader, but the S&P’s explanation of the downgrade makes clear that the Budget Control Act of 2011 “envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.”
Note the word “key.”
S&P, like all realistic observers of America’s fiscal situation, understands that America’s long-term fiscal health depends almost entirely on reforming our entitlement programs, particularly Medicaid and Medicare. The only people who don’t recognize this are Nation magazine readers and writers and those who think like them.
So who has been talking about reforming entitlements? Democrats? No. It has been Republicans. Indeed, Republicans (at least a substantial number of them) have been talking about a drastic entitlement overall for months. House Budget chairman Paul Ryan’s budget plan, which would have reformed our entitlement programs and put America on a fiscally sustainable course, passed the House in April with near unanimous Republican support and no Democrat votes.
Had the Senate passed the Ryan plan and the president signed it into law, there would have been no downgrade. Not only did Democrats not thank Ryan for at least putting a plan on the table, they demagogued Ryan and the plan. They said Republicans were trying to kill old people. Do liberals want us to believe this was constructive and had nothing to do with the toxic political environment S&P noted in its downgrade report?
It also must be remembered that President Obama wanted a clean debt ceiling raise without any budget cuts whatsoever. It is hard to blame the right for not coming to a larger deal to avoid a downgrade when the Democrats wanted no deal at all.
Considering all this, how can one call S&P’s decision the “tea party downgrade?” This isn’t to say that tea party Republicans acted perfectly — they didn’t. They should have, for instance, pressed Obama harder to put his so-called “grand bargain” on paper in order to see if it was really serious — and if the plan was, perhaps compromised a bit on revenues to allow the president to save face. But to blame tea party Republicans for the downgrade when they were the ones pushing for deep cuts and drastic entitlement reform is more than a little preposterous.
Let’s put it this way. Had the tea party had its way and its opening plan been adopted, S&P most certainly would not have downgraded our credit rating. Had President Obama had his way and his “clean” debt ceiling increase been approved, it is hard to see how we wouldn’t have been downgraded.
Now, you might argue that President Obama would have launched an initiative outside of the debt ceiling increase to get America’s fiscal house in order. In theory that is possible, but there is nothing to suggest this would have happened. After his presidential commission on America’s long term debt issued a majority report, he flat-out ignored it. He also joined in on the demogoguing of Paul Ryan’s plan. Given this, what exactly makes one think that Obama would have pushed for a real debt deal after being given a clean debt ceiling increase?
All of this is not to suggest the attacks mounted against S&P in the wake of the agency’s report, given its poor track record, are meritless. There is also merit to the criticism that America hardly needs a political science lecture from the credit rating agency.
Nonetheless, the agency’s criticism, which formed a crucial part of its rational to downgrade, that America hasn’t seriously addressed its entitlement situation is spot on. And the reason for that is hardly the fault of tea party Republicans.
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