WASHINGTON -- America's fragile, high-unemployment, debt-ridden economy is looking shakier than ever, threatening Barack Obama's chances of a second term and boosting support for the GOP's drive to sharply cut government spending.
That is the clear conclusion from two bombshell reports this week. One from a respected credit-rating agency that shifted its economic rating of the United States from "stable" to "negative," warning that it could lose its AAA rating if Congress doesn't get control of runaway spending. The other from the latest Washington Post poll that said 57 percent of Americans surveyed now disapprove of the job Obama is doing on the economy -- and that he is doing worse among independents.
The negative rating from Standard & Poor's shook the White House's high command at a time when Obama is traveling the country, trying to boost support for his much slower deficit-reduction plan. The big difference with the House Republicans' budget plan: His calls for much higher taxes on the economy when most Americans are struggling to cope with $4-a-gallon gasoline, higher food prices, flat or slow wage growth, a declining stock market and, for many, the difficulty of finding a good-paying full-time job.
"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 S&P warned. "If an agreement is not reached ... this would in our view render the U.S. fiscal profile meaningfully weaker."
Public anger over excessive government spending has always been an issue in political campaigns, but the unprecedented deficit and debt levels experienced in the past two years, and worsening this year, have propelled the issue into the top tier of voter concerns, according to most polls.
This year's budget deficit under Obama's spending policies will be a monstrous $1.6 trillion in a sky-high $3.8 trillion budget, pushing total public debt well beyond $14.3 trillion and climbing.
Republican leaders appear to have successfully tied their plan to cut spending and rein in unprecedented debts with job creation, arguing that the more money government takes out of the economy through taxes and borrowing, the weaker it will be.
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