South Carolina Democratic Congressman Jim Clyburn questioned Standard & Poor’s downgrade of the federal government’s credit rating last week, saying it was based on “politics rather than economics.”
Standard & Poor’s said it lowered the U.S. credit rating to AA+ after Congress did not reach the $4 trillion in deficit reductions the agency believed was necessary to keep a AAA rating. Two other agencies, Moody’s and Fitch kept the ratings at AAA. Standard & Poor’s warned that political brinksmanship also made the possibility of a long-term fiscal solution unlikely in the next two years.
Clyburn said that was an unusual reason to downgrade, since the U.S. has always paid its bills on time. “Their reasons seem to be focused on politics rather than economics,” he told reporters at his office Tuesday, “I know there’s brinksmanship going on in Washington. The public knows that. But, I don’t know whether that ought to be taken into consideration when you’re talking about whether or not people can pay their debts.”
Congress is currently off on its annual August recess. When they get back to Capitol Hill, the debt issue will still loom over the proceedings. As part of a deal passed last week, a committee is scheduled to meet to discuss how to knock an additional $1.5 trillion off the deficit.
Clyburn, the third-ranking Democrat in the House, said he was not actively seeking a position on that committee, but would accept it if it were offered to him. He served on a bipartisan group led by Vice President Joe Biden earlier this year that was unsuccessful at the time in finding a solution for the debt ceiling debate, although Senate Majority Leader Harry Reid credited the group with finding many of the savings that were incorporated into the eventual deal.
Fellow South Carolina Congressman Trey Gowdy, a Republican, says any long-term solution would have to include changes to “entitlement” programs like Medicaid, Medicare, and Social Security. “Privately in Washington, everyone agrees on what the issues are. When the cameras are off and the microphones are turned off, everyone concedes entitlement spending is driving our debt,” he told a civic group Monday.
Clyburn vehemently disputed that, saying the massive debt was caused by the Bush tax cuts and Republicans putting the wars in Afghanistan and Iraq, as well as new prescription drug benefits, “on the credit card” while they were in office.
However, he said he worried those programs would be cut in the future. Clyburn said he hopes any long-term solution includes allowing tax cuts to expire for the top 2 percent. The Congressional Budget Office estimated last year that would provide the federal government with an additional $690 billion. However, supporters of the cuts say tax revenues increased as a result of the cuts from 2003 to 2008, when the economy soured.
Republicans oppose letting the tax cuts expire, saying it will hurt the economy further.
Clyburn did say he would be open to possible means testing for Social Security, “Warren Buffett gets a Social Security check every month,” he said. He said he’d also like to see the system treat different occupations differently, for example allowing a coal miner to retire sooner than a white-collar worker that doesn’t face the same health risks.