Moody's: McConnell Plan May Not Avoid Downgrade
The back-up plan needs a back-up plan.
Senator Mitch McConnell's "Plan B," increasingly seen as a "Plan A" in Washington, would avoid any immediate downgrade of the coveted U.S. triple-A rating, Moody's analyst Steven Hess told Reuters in an interview.
"But the numbers that are being discussed in terms of any possible deficit reduction coming out of this plan don't seem to be very large," Hess said. "Therefore this plan might result in a negative outlook on the rating."
The bottom line is that Washington has to get off its debt addiction. Given the track records of both parties over the past five years, I only see one way out, and even that's imperfect: A balanced budget amendment. Among other things, a BBA gives budget cutters the cover they'll need when they have to make tough decisions. It tends to work for the states, it could work for the feds.
Without it, we may fix the current crisis one way or another, but we'll be right back here before you know it for the simple reason that our elected pols know they stand a better chance of keeping their jobs if they buy some of us off with other people's money. If there was ever a moment when we might get them to tie their own hands, this is it.
As for today's Gang of Six proposal, Doug Ross rounds up reax to it from the conservative commentariat. It's mostly negative. There's no way to keep anybody really happy in a debate like this, but if the plan really does raise taxes by $3 trillion, then it's a dead letter. And the fact is, the plan itself isn't legislation, it's an outline. So whatever it says today will change once it gets turned into legislation. And that's where mischief is likely to sneak into even the best of plans.
Update: Geez. It's getting to the point where it's impossible to have any less respect for the president's leadership style. All he ever does is slam and demonize others while offering up no ideas of his own, save the rigidly ideological approach of cutting defense and keeping entitlement spending unsustainably high. The fact that he won't lead, and sees this as a virtue, just keeps making the crisis linger. Setting ideology aside for the moment, Barack Obama just isn't any good at his job.