Here's The Treasury's Response To The S&P Downgrade Shocker

us treasury, timothy geithner

Via Reuters (and @alea), here’s the Treasury Departments response to S&P’s downgrade of the US debt outlook.

In a nutshell: S&P reaffirmed the US AAA, but this does emphasise the need for bipartisan cooperation on debt.

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“This morning, S&P affirmed the AAA rating of the U.S., but emphasised the importance of timely bipartisan cooperation and action on fiscal reform. In addition, Moody’s commented today that ‘we view the changed parameters of the debate, with broadly similar goals as to government debt levels, as a turning point that is positive for the long-term fiscal position of the U.S. federal government.’

 “As the president said last week, addressing the current fiscal situation is well within our capacity as a country. He has initiated a bipartisan process that will allow us to make progress on a balanced approach to restoring fiscal responsibility. The U.S. economy is strengthening as it emerges from the recent recession. Both political parties now agree that it is time to begin bringing down deficits as a share of GDP.

 “S&P assumes that the U.S. will enact ‘a comprehensive budgetary consolidation program — combined with meaningful steps toward implementation by 2013,’ but we believe S&P’s negative outlook underestimates the ability of America’s leaders to come together to address the difficult fiscal challenges facing the nation.”

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