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Debt Politics Change Little Despite Turmoil

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The market turmoil following last weeks debt deal including Mondays 600-point plunge in the Dow Jones Industrial Average appears to have merely amped up partisan attacks.

Standard & Poors blamed, in large part, partisan gridlock for its historic downgrade of U.S. credit rating to AA+ from AAA Friday evening. But rather than causing the parties to look for ways to bridge their differences, their political arms went on the attack.

The Republican National Committee ripped President Barack Obama as the not-so-AAA president Tuesday morning and urged him to fire Treasury Secretary Timothy Geithner, while the National Republican Congressional Committee blamed Obama for resisting a balanced budget amendment to the Constitution.

Obama cast blame on the GOPs months of debt brinkmanship in a speech Monday amid the stock market plunge.

We knew from the outset that a prolonged debate over the debt ceiling a debate where the threat of default was used as a bargaining chip could do enormous damage to our economy and the worlds, he said.

Obama said he would offer up his own proposals for the new Joint Committee on Deficit Reduction tasked with finding at least $1.2 trillion in deficit reduction over the next decade.

But in a campaign event Monday evening, the president didnt sound too hopeful that his ideas would get enacted. He criticized Republicans for being dug into their ideological purity on tax revenue and started pointing to the next election as a chance for voters to weigh in.

The challenge is simply that the politics in this town doesnt seem to be equipped to make modestly tough choices, Obama said at a fundraiser. The good news is that I think there has been enough frustration at Washington it sort of reached a fever pitch last week that were now looking at 16 months in which theres going to be a clear contrast and a clear choice to be made.

House Majority Leader Eric Cantor, meanwhile, criticized the S&P in a Monday memo for citing Republican opposition to revenue as one of the reasons for the downgrade.

As a result of the downgrade, There will be pressure to compromise on tax increases, the Virginia Republican wrote. We will be told that there is no other way forward. I respectfully disagree.

Cantor said Republicans should demand the new joint committee focus exclusively on spending cuts.

Cantor also predicted fundamental reform of entitlements will have to wait until after the 2012 elections, and cited Budget Chairman Paul Ryans (R-Wis.) comments on Fox News Sunday lowering expectations for the joint committee.

Speaker John Boehner also reiterated his opposition to tax hikes.

Just as both parties contributed to our unsustainable debt, both parties must work now to cut spending, the Ohio Republican said.

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