In a diplomatic double-step on Monday, Treasury Assistant Secretary Mary Miller welcomed S&P’s affirmation of the United States’ AAA debt rating while at the same time criticizing the rating’s service for downgrading its economic outlook to negative.
“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,” Miller said in a statement. “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 Treasury Department was joined in its criticism by the White House. Austan Goolsbee, President Barack Obama’s chief economic advisor, rejected the negative outlook as a “political judgment” that he said doesn’t deserve “too much weight.”
“They are saying their political judgment is that over the next two years they didn’t see a political agreement to reduce long-term deficits,” Goolsbee (left), chairman of the Council of Economic Advisers, told Bloomberg Television. “I don’t think that the S&P’s political judgment is right.”
Goolsbee said Obama and Republican congressional leaders are “pretty close” in the deficit reduction targets they have announced. Each has set a target of $4 trillion, though House Republicans have a timeline of 10 years and the White House proposal would cumulatively cut that amount over 12 years.
“They agree that we got to take some significant actions” that “promote fiscal responsibility,” Goolsbee said.
Bloomberg also pointed to an earlier interview with MSNBC, in which Goolsbee said: “I believe we can get to some long-term deficit reduction that would address these issues that S&P’s discussing.”