Bachmann Says U.S. Will Retain Credit Rating Without Debt Rise
Republican presidential candidate Michele Bachmann said she has “no doubt” the U.S. will maintain its top credit rating, even as she reiterated her opposition to any increase in the country’s debt ceiling.
Bachmann blamed recent market volatility on the lack of a clear plan to reduce national deficits, as Congress remains deadlocked on raising the $14.3 trillion debt limit as an Aug. 2 deadline for a potential default approaches.
“The markets know when politicians and serious about spending cuts and the markets know when politicians are not,” she said in an appearance at the National Press Club.
Repeating comments she has made in Iowa and other campaign stops in recent weeks, Bachmann attacked all the proposals for a debt-limit increase, including one by House Speaker John Boehner, an Ohio Republican, scheduled for a vote later today.
“I will not be casting my vote for that bill,” she said. “I cannot. I am committed to not raising the debt ceiling.”
Boehner’s plan would provide an immediate $900 billion boost in the $14.3 trillion debt ceiling while cutting $915 billion in spending and tying a future borrowing increase to enactment of more deficit reductions later this year. President Barack Obama and Democrats who control the Senate have said they oppose Boehner’s two-step approach and instead are pushing for resolving the debt issue through 2012.
“We need leaders who are willing to say no” to any debt limit increase, said Bachmann, arguing the sole focus should be on spending cuts.
Bachmann, 55, voted last week against a Boehner-backed bill that, along with raising the debt limit and making spending cuts, included a balanced budget amendment to the U.S. Constitution. That measure, which the Senate defeated, “simply did not go far enough to fundamentally restructure how this city spends the Americans people’s money,” she said.
She directed her toughest criticism at Obama, accusing him of using “scare tactics” in the debate on the debt limit and “passing the baton of leadership to Congress.”
Standard & Poor’s, which has given the U.S. a top AAA ranking since 1941, said on July 14 that the chance of a downgrade within three months is 50 percent, and a reduction may occur as soon as August if there isn’t a “credible” plan to reduce the nation’s deficit.
Bankers, including Goldman Sachs Group Inc. Chairman and Chief Executive Officer Lloyd Blankfein and JPMorgan Chase & Co. chief Jamie Dimon, called on Obama and Congress today to raise the debt limit to steer the government away from the threat of default that would threaten the nation’s credit status.
The government may lose its AAA credit rating even if lawmakers reach a plan to avoid a default, Mohamed A. El-Erian, whose Pacific Investment Management Co. is the world’s largest manager of bond funds, said in an e-mail to Bloomberg News on July 24. BlackRock Inc., Franklin Templeton Investments, Loomis Sayles & Co. and Western Asset Management have also said that the nation faces the loss of its top-level grade.
Bachmann declined to say whether she would continue to support Boehner as speaker if he helps in the adoption a debt ceiling increase.
She also refused to answer questions about practices at a Christian counseling center in Minnesota that she owns with her husband and that he operates. ABC News reported that that the clinic attempts to “cure” patients of homosexuality through prayer.
“I’m extremely proud of my husband,” she said, as he sat by her side. “My husband is not running for the presidency.”
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