WH Downplays S&P Downgrade

The Wall Street Journal reports:

The Obama administration said Monday Standard & Poor’s negative outlook on long-term U.S. debt underestimates the country’s ability to face fiscal challenges.

S&P early Monday affirmed the federal government’s “AAA” rating but changed its long-term outlook to negative from stable. The revision to the U.S. outlook comes as the White House and Congress are mired in a debate about how to slash the country’s deficit.

“We believe there is a material risk that U.S. policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013, ” the ratings agency said.

But Treasury Department Assistant Secretary for Financial Markets Mary Miller disagreed with S&P’s assessment.

“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.

Miller said that it is well within the country’s capacity to address its fiscal situation and noted that both Democrats and Republicans agree it is time to start reducing deficits as a share of gross domestic product.