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4 Bumps

Is this what you call damage control?

He has to do something, because this will his his re election pretty damn hard.

The Obama administration moved swiftly Monday to downplay ratings agency Standard & Poor's downgrade of its U.S. credit outlook, calling the decision a political judgment that should not be taken too seriously.

The timing of S&P's announcement was unwelcome for the White House, coming just as President Obama tried to regain the initiative on the deficit debate in Washington.

Last week Obama laid out his plan to reduce the budget deficit by $4 trillion over 12 years, trying to give markets confidence that he was serious about tackling U.S. fiscal woes.

House Republican leader Eric Cantor on Monday called the S&P downgrade "a wake-up call" against those seeking to "blindly increase" the U.S. debt limit.

S&P downgraded the outlook for the United States to negative, saying it believes there is a risk U.S. policymakers would not reach agreement on how to address the country's long-term fiscal pressures by 2013.

So much for market confidence.

The White House strategy:

1) Pan S&P.

"I don't think that we should make too much out of that," top White House economist Austan Goolsbee said on MSNBC, referring to the S&P downgrade.

"What the S&P is doing is making a political judgment and it is one that we don't agree with," he said on CNBC.

2) Praise Moody's.

The rival ratings agency said it viewed the direction of U.S. fiscal policy as "credit positive."

"It appears to me that Moody's and some others did not agree with that judgment," Goolsbee said.

3) Express optimism.

White House and U.S. Treasury officials said they believed lawmakers would be able to come up with an agreement to reduce the U.S. deficit. S&P's skepticism of that influenced its decision on the downgrade.

"We think that there has never been more momentum to try to get to fiscal consolidation, so we think that we should give that process its due," a Treasury official said.

4) Buy time.

Obama administration officials said it would take some time to get a solution, and S&P should have waited to allow that to happen.

Answer Question

Asked by Carpy at 4:32 PM on Apr. 18, 2011 in Politics & Current Events

Level 39 (114,053 Credits)
Answers (5)
  • I think he's reacting the way the leader of any organization would act if thier company was "downgraded". No CEO would just say "Yeah man...this place is a real shit hole...we're going belly up any day". They would defend thier organization and justify thier actions. Standard PR moves.

    Answer by UpSheRises at 4:35 PM on Apr. 18, 2011

  • Standard PR moves.

    Also known as damage control.

    Comment by Carpy (original poster) at 4:40 PM on Apr. 18, 2011

  • There's nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires.It's clearly a matter of both partys being too hardheaded to cut a reasnonable(reasonable on both partys terms) deal to allow the defecit to be dealt with. America has lost credibility in every form. The house of cards is starting to shake.Oh snap who woulda thunk?

    Answer by CHarlan at 5:09 PM on Apr. 18, 2011

  • LOL, how much longer does he need to get a budget for a year that is almost over???? They may be pooh poohing S & P, but as a former trust officer I can tell you the investors pay attention to them.

    Answer by yourspecialkid at 9:09 PM on Apr. 18, 2011

  • Obama administration officials said it would take some time to get a solution, and S&P should have waited to allow that to happen.

    Hmmm, I wonder how long they should have allowed???

    Answer by agentwanda at 12:28 AM on Apr. 20, 2011

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