Facing criticism of its downgrade of U.S. debt from politicians on both sides of the aisle, Standard and Poor’s executives have launched a public relations blitz to turn the tables on Washington.From television interviews to a conference call with reporters, the ratings agency is placing the blame for the downgrade squarely on D.C. gridlock.
“The debacle over the debt ceiling continued until almost the midnight hour,” S&P Managing Director John Chambers told reporters Saturday, citing Washington dysfunction as the key reason for the downgrade.
The Treasury Department posted a detailed blog post titled “Just The Facts: S&P’s $2 Trillion Mistake,” arguing that the ratings agency went ahead with the downgrade after being presented with a crucial flaw in its analysis.
Gene Sperling, director of the National Economic Council, added in a statement Saturday that “the magnitude of their error combined with their willingness to simply change on the spot their lead rationale in the press release once the error was pointed out was breathtaking.”
“It smacked of an institution starting with a conclusion and shaping any arguments to fit it,” he said.
S&P sovereign ratings head David Beers called it “a complete misrepresentation of what happened,” in an interview on Fox News Sunday.
Talking to reporters on Saturday, Beers said “fiscal policy, like other government policy, is fundamentally a political process.”
The S&P downgrade statement affirmed that, noting political leaders’ unwillingness to tackle tax and entitlement reforms.
“Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a ‘AAA’ rating and with ‘AAA’ rated sovereign peers,” the report said.
“We think our message has been pretty consistent, and we also think that the numbers speak for themselves,” Chambers told ABC News’ ‘This Week.’
The only way back to a AAA rating, Chambers added, is a breakthrough on entitlement and tax reform — the political will for which, he said, he doesn’t see on the horizon.
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