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Tuesday, August 9, 2011

Jim Clyburn Calls Out Credit Downgrade As Bad Political Move

SC Rep. Clyburn: debt rating call political

U.S. Rep. James Clyburn criticized Standard & Poor's downgrade of America's debt rating on Tuesday, saying he thinks the decision was based more on politics than economics.

The Democrat from South Carolina told reporters he's concerned the decision focused on Washington's fractious political climate rather than America's actual ability to pay its debts.

"I think this is very unfortunate. I think it was underserved, but I don't think it was unexpected," Clyburn said of Friday's decision, which has since touched off turmoil in stock markets around the globe.

On Monday, S&P managing director David Beers said on ABC's "Good Morning America" that the agency's decision was based on several factors, including damage done to America's reputation by the debt ceiling controversy and concerns that public finances are on an unsustainable path.

Asked if he had any second thoughts about the downgrade, Beers said, "Absolutely not."

For the first time ever, S&P downgraded the U.S. rating, cutting it to "AA+" from AAA. Two other ratings agencies — Moody's and Fitch — said they were keeping the AAA rating for now.

Asked about the S&P decision, Clyburn said, "Their reasons seemed to be focused on politics, rather than economics. They talked about the brinkmanship going on in Washington. I know there's brinkmanship 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 you can pay your debts."

The No. 3 House Democrat said he thinks the manner in which the debate over the debt ceiling unfolded is "a question of public process, not the ability to pay the bills. I have a problem with that."

Clyburn says he's pleased the two other major credit agencies kept the country's top credit rating, comparing it to a batter who is able to hit two out of three pitches in a ball game.

He said he believes the Bush-era tax cuts should not be extended and tax loopholes closed, instead of cutting entitlement programs, in order to help solve the nation's budget problems.

The best way for the nation to get away from a climate of brinkmanship is to "elect people who believe in give and take," the congressman said.

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Sources: Canadian Business, MSNBC, Youtube, Google Maps

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