Democrats were legitimately shocked (or at least should have been) to hear that Standard and Poor’s was downgrading the United States’ AAA credit rating. After all, they were convinced that just raising the debt ceiling would be enough to convince the world that we’re “serious” about paying our bills:
Treasury Secretary Tim Geithner, for example, told Fox Business back in April there was “no risk” that the United States would have its credit rating downgraded, because, he argued, congressional leaders would eventually reach a deal to raise the debt ceiling. Naturally, when asked by the New York Times’ John Harwood if the Obama administration’s policies were in any way responsible for the downgrade, Geithner said, “absolutely not.”
When Democrats did broach the topic of a downgrade, they presented it as an example of what would happen if those crazy tea-partiers got their way. “Congress is suggesting we may not vote to raise the debt ceiling,” Obama said at a Twitter town-hall meeting on July 6. “If we do not, then the Treasury will run out of money . . . and potentially the entire world capital markets could decide, you know what, the full faith and credit of the United States doesn’t mean anything. And so our credit could be downgraded.”
About a week later, S&P issued a report warning that the U.S. credit rating could be downgraded not only in the event of a default, but “unless substantial and credible agreement is achieved on a budget that includes long-term deficit reduction.” That didn’t stop House Democratic leaders from holding a press conference the next day to call for a “clean” increase to the debt ceiling without any deficit-reduction measures attached. “It’s looking like default or a clean extension,” Rep. Peter Welch (D., Vt.) told Politico. “We’re absolutely intent that we’re keeping our AAA credit rating.”
More here.