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S&P BLAMES THOSE SKEPTICAL OF DEFAULT FOR DOWNGRADE
LAST SUPERCOMMITTEE MEMBERS NAMED
REP. KING: "I HIT A SENSITIVE NERVE"
Congressional 
Climate Bill Tracking 
Keyhole Image H.R.658 - FAA Reauthorization and Reform Act of 2011
Keyhole Image H.R.164 - Damaged Vehicle Information Act
Keyhole Image H.R.514 - FISA Sunsets Extension Act of 2011
Keyhole Image H.R.1 - Department of Defense Appropriations Act, 2011
Keyhole ImageH.R.4 - Small Business Paperwork Mandate Elimination Act of 2011
Keyhole Image H.R.96 - Internet Freedom Act
Keyhole Image H.R.605 - Patients' Freedom to Choose Act
Keyhole Image S.244 - State Health Care Choice Act

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GOP Candidates Go After Obama - and Each Other

GOP Candidates Go After Obama - and Each Other

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Greetings!  
Please enjoy today's issue of the Congressional Climate newsletter, brought to you by Lobbyit.com!
Today's Hill Action: 

 

THE SENATE:

 

The Senate will meet at 12:00 p.m. for a pro forma session.

SENATE COMMITTEES:

 

No meetings scheduled for today.

 

THE HOUSE: 

 

No meeting scheduled for today.

 

HOUSE COMMITTEES:

 

No meetings scheduled for today

S&P: Debt default skeptics fueled ratings downgrade

 

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A Standard & Poor's director said for the first time Thursday that one reason the United States lost its triple-A credit rating was that several lawmakers expressed skepticism about the serious consequences of a credit default - a position put forth by some Republicans.

 

Without specifically mentioning Republicans, S&P senior director Joydeep Mukherji said the stability and effectiveness of American political institutions were undermined by the fact that "people in the political arena were even talking about a potential default," Mukherji said.

"That a country even has such voices, albeit a minority, is something notable," he added. "This kind of rhetoric is not common amongst AAA sovereigns."

 

The statement seems likely to bolster one Democratic line of attack, that it was tea party intransigence - not a shortcoming of leadership by President Barack Obama - that is to blame for the U.S. downgrade, from AAA to AA+. Obama himself called on Republicans to "put country ahead of party" Thursday - a dig at conservatives in Congress who are blocking his agenda.

 

GOP leadership in the House and Senate was vocal in warning about the dangers of default. But some lawmakers blasted warnings by the Obama administration that a failure to raise the debt ceiling would unleash an economic catastrophe, including Republican presidential candidate Rep. Michele Bachmann (R-Minn.), who voted against the debt limit increase and said the nation would avoid default even without a deal.

 

"I want to state unequivocally for the world, as well as for the markets, as well as for the American people: I have no doubt that we will not lose the full faith and credit of the United States," Bachmann said

In reaction to the statements by S&P on Thursday, however, Rep. Tom McClintock (R-Calif.) said the firm had misinterpreted the GOP position.

 

"No one said that would be acceptable," he said of a default. "What we said was in the event of a deadlock it was imperative that bondholders retain their confidence that loans made to the United States be repaid on schedule."

 

More than 100 House Republicans backed a measure sponsored by McClintock that created a plan if the country failed to raise the debt ceiling - prioritizing debt payments over other obligations.

In the Senate, Sen. Pat Toomey (R-Pa.) introduced the bill, which he said in a Wall Street Journal editorial could force "sudden and severe" spending cuts.

 

"Projects would be postponed, some vendor payments would be delayed, certain programs would be suspended, and many government employees might be furloughed," Toomey wrote in January, acknowledging that he hoped the drastic scenario might be avoided.

 

The Treasury Department said the plan constituted a form of default, however, since salaries, taxes and contract payments would have gone unpaid.

Congress and the president finalized a deal to avert default on Aug. 2, increasing the debt limit in return for at least $2.1 trillion in deficit savings over the next decade. Over the next several months, a new super committee from both chambers will identify more than half of those savings. 

 

Toomey, one of a dozen members of the super committee, declined to comment on Mukherji's remarks.

McClintock said that S&P executive David T. Beers told congressmen the key to sustaining a top-notch rating was $4 trillion in deficit savings.

He recalled asking Beers at a meeting, "Well, how about $3 trillion?"

"Beers' response was emphatic - 'No,'" the congressman said.

The debt compromise failed to meet S&P requirements.

S&P's Mukherji said the trajectory and amount of deficit savings factored into the downgrade decision, along with the slow response to the potential crisis by the nation's leaders.

"What S&P wanted to see from the deal was a stabilization in the debt-to-GDP ratio over time," he said. "We wanted to see something other than a line that kept going up. That's what we didn't see."

S&P publicly released its criteria for sovereign ratings on June 30, so there would some degree of transparency in how the decision was made.

Geithner told CNBC earlier this week that S&P had "shown a stunning lack of knowledge about basic U.S. fiscal budget math, and I think they drew exactly the wrong conclusion from this budget agreement."

Nonetheless, Geithner did not necessarily question S&P's political judgment.

"They, like many people, looked at this terrible debate we've had over the past few months, should the U.S. default or not, really a remarkable thing for a country like the United States," he said. "And that was very damaging."

Mukherji acknowledged that the definition of political instability can vary among countries, as some nations are prone to striking workers and rioting but not necessarily unstable.

"Every country has its own dynamics and its own theatre and its own ways of dealing with these issues," he said.

House leader names last members of supercommittee  

 

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The leader of Democrats in the House of Representatives on Thursday named three members of her party to fill the final three slots House on Congress' new debt-reduction supercommittee, a panel whose members are already being tugged in competing directions.

 

Rep. Nancy Pelosi selected Reps. James E. Clyburn, and Xavier Becerra of California, who both are members of the party's House leadership. Also chosen was Rep. Chris Van Hollen, the top Democrat on the Budget Committee.

 

The choices bring racial diversity to the supercommittee. Clyburn is black and Becerra is Hispanic.

The 12-member panel, divided evenly among Democrats and Republicans, has until Thanksgiving to propose $1.5 trillion in 10-year budget savings. If it does not propose a package or if Congress doesn't approve it, $1.2 trillion in automatic budget cuts will be triggered.

 

The panel was created as part of a deal in which the U.S. limit on borrowing was lifted above $14.3 trillions.

 

The deal reached earlier this month included about $1 trillion in federal spending cut but no increase in tax revenues as President Barack Obama had wanted. It does raise the debt limit sufficiently, another Obama demand, to keep the issue from returning to Congress until after the November 2012 presidential and congressional elections.

 

Complicating the panel's task are the economy's alarming stall, the chaos dominating financial markets and last week's historic downgrade of the U.S. government's credit rating. Next year's elections will put added political pressures on the lawmakers.

 

In making the appointments, Pelosi said that when Congress returns from recess next month, it also should pass jobs legislation, including highway and aviation bills lawmakers have been working on.

 

Job creation legislation usually costs the government money and drives up short-term deficits.

Other congressional leaders made their selections earlier this week.

 

Members of both parties said the job of whittling down the government's enormous debt was urgent, yet critics expressed little hope that the bipartisan panel would be able to overcome stark political divides.

Either way, deficit foes said the nation's growing red ink was so dangerous that the panel should double or triple the $1.5 trillion, 10-year savings goal set by the debt-limit compromise.

 

On Wednesday, House Speaker John Boehner named conservative Rep. Jeb Hensarling, a rising force among House Republicans, as Republican co-chairman of the powerful new panel. He also appointed House Ways and Means Chairman Dave Camp and House Energy and Commerce Chairman Fred Upton.

 

Senate Minority Leader Mitch McConnell named confidant and No. 2 Senate Republican leader Jon Kyl, tapping a lawmaker who is retiring in 2013 and is a solid conservative. He also appointed Sen. Pat Toomey, elected last year with tea party backing, and fellow freshman Sen. Rob Portman, a former budget director and trade representative for President George W. Bush.

 

On Tuesday, Senate Majority Leader Harry Reid chose Sen. Patty Murray, who runs the Senate Democratic campaign arm, as Democratic co-chair of the debt committee. He also appointed 2004 Democratic presidential nominee and Senate Foreign Relations Committee Chairman John Kerry and Senate Finance Committee Chairman Max Baucus, a centrist who backed President George W. Bush's 2001 tax cuts.

 

At the White House, spokesman Jay Carney said Obama expects members of the committee to "act seriously." He reiterated Obama's call for "a balanced approach," which means a mix of spending cuts and tax increases.

 

Yet critics noted that none of the Senate's so-called Gang of Six, a bipartisan group of senators who proposed trillions in spending cuts and tax boosts this year, was named to the panel. And while Baucus, Camp and Hensarling were members of the bipartisan deficit commission that Simpson headed with Democrat Erskine Bowles, critics pointed out that all three had opposed that group's final recommendations.

 

With the panel split evenly between the two parties, seven of the 12 members will have to approve a debt-cutting plan before it can be sent to Congress for votes. That means at least one lawmaker would have to agree to a plan backed by the opposite party.

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Rep. Peter King begs to differ with White House press secretary Jay Carney's jab that it's "ridiculous" for the congressman to suggest the Obama administration could be endangering national security by cooperating with filmmakers working on a movie about Osama bin Laden. 

 

"Obviously, I hit a sensitive nerve," the House Homeland Security Committee chairman told POLITICO on Thursday morning. "What he said was nonsense - there has been so much classified information released over the last 90 days" since bin Laden was killed in a raid on his Pakistan compound. 

 

On Wednesday, the New York Republican released a letter to the inspectors general of the Defense Department and the Central Intelligence Agency voicing concern about the administration's work with Kathryn Bigelow and Mark Boal, the director and screenwriter who produced the Academy Award-winning "The Hurt Locker."

At his daily press briefing on Wednesday, Carney said that King's "claims are ridiculous."

"We do not discuss classified information," he said, "and I would hope that as we face a continued threat from terrorism, the House Committee on Homeland Security would have more important topics to discuss than a movie."

But King shot back on Thursday, saying, "It's ridiculous for [Carney] not to realize how much sensitive information there has been disclosed ... he doesn't know how the enemy analyzes this inside out, how Al Qaeda or the Taliban might use something."

Most of the information about the raid that the White House has given to reporters and others "has been focused on the president's role" in it, Carney said, and the most specific information released by the White House about the raid itself "I read to you from this podium."

King said he wants to see the Defense and CIA inspector generals "lay out exactly what the ground rules are, what the parameters are, who's meeting with whom" to ensure that classified information about the bin Laden raid stays that way.

"It shouldn't have been out there that SEAL Team 6 did this, and there have been so many details out there" in press accounts, King said. "And now we find out they are cooperating with a movie - what are we doing?"

King spoke to POLITICO soon after finishing an appearance on MSNBC's "Morning Joe" in which the Long Islander was asked by host Joe Scarborough, a former Florida congressman, about his views on likely presidential candidate Gov. Rick Perry (R-Texas) and whether Congress should come back into session, but not about his widely publicized call for a probe into the White House's cooperation with the Osama film.

"I assumed I was going to talk about the movie," King said, "but with Scarborough, it can go in go in a different direction."

Until tomorrow,


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