The announcement this morning that Standard & Poor's downgraded the long-term outlook for the United States' credit rating from stable to negative is an alarming indicator of the need for real reforms to get our fiscal house in order. According to S&P's release:
"Because the U.S. has, relative to its 'AAA' peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us, we have revised our outlook on the long-term rating to negative from stable.
...if an agreement is not reached and meaningful implementation is not begun by , this would in our view render the U.S. fiscal profile meaningfully weaker..."
David Beers, S&P's top dog when it comes to ratings for countries, says the U.S. is being left behind by countries doing more to address their fiscal challenges. From CNBC:
"[S&P has been] struck increasingly by the difference in how other governments are dealing with fiscal consolidation."
"The U.S. to us looks to be an increasing outlier in that context," he added.
Last week, House Republicans passed The Path to Prosperity, a plan that would cut $6.2 trillion in government spending over the next decade and reduce deficits by $4.4 trillion. In doing so, it puts the budget on the path to balance and pays off the debt.
In contrast, President Obama has failed to offer a credible plan. His budget ignores the drivers of our debt - entitlements - and a recent speech he gave did little more than call for a commission to come up with a plan to address the problem. Instead of looking for common ground, he used the opportunity to repeat the same tired partisan jabs.
This is our time to come together as Americans and face the challenge at hand. As a country, we have faced great challenges in the past and prevailed and we can do the same again.