Published April 20, 2011
Treasury Secretary Tim Geithner testifies at a House Ways and Means Committee hearing on Capitol Hill Feb. 15.
Even though the White House has publicly downplayed the credit warning issued Monday from a leading agency, Obama administration officials were privately trying in recent weeks to convince Standard & Poor’s not to lower its outlook for U.S. debt from “stable” to “negative,” Fox News has confirmed.
But after a series of meetings between the Treasury Department and S&P, the ratings agency ignored the pressure and told administration officials late Friday that the U.S. government was at risk of losing its sterling credit rating, a senior administration official told Fox News.
The Washington Post first reported on the private meetings in which Treasury officials argued to S&P analysts that a ratings change was unnecessary because the nation’s $14.3 trillion debt was under control and the administration had a feasible plan in the offing. Treasury officials also contended to S&P analysts that they were overlooking the ability of U.S. lawmakers to reach a compromise to tame deficits.
But the argument failed. The agency based its assessment on the sentiment that a budget agreement addressing the country’s long-term deficit and debt problem might not be reached until after the 2012 election.
Republican National Committee Chairman Reince Priebus said in a tweet, “It is alarming that the WH would encourage S&P to suppress a damaging fiscal report for Obama’s partisan speech.”
Stark words from GOP senator on debt
The White House has been trying to minimize the credit warning ever since it was issued Monday. Treasury Secretary Tim Geithner, in an interview with Fox Business Network Tuesday morning, said there is no risk the country will lose its AAA credit rating.
White House chief spokesman Jay Carney said Monday that the political atmosphere for consensus is better than S&P predicts.
“We think that the political process will outperform S&P expectations,” Carey said, adding that both parties agree on a long-term deficit-reduction target of about $4 trillion — is looking to achieve that in 12 years, while Republicans are shooting for a little bit more than that in 10 years — and that they can find common ground on how to reach it.
Republicans, though, do not appear to share that optimism, absent an agreement that ties big spending cuts to a looming vote on whether to raise the country’s $14.3 trillion debt ceiling. The White House does not want the debt-ceiling vote contingent on a spending agreement, but Republicans are pushing to link the two.