White House calls S&P downgrade political judgment

Reuters News
Posted: Apr 18, 2011 11:03 AM
White House calls S&P downgrade political judgment

WASHINGTON (Reuters) - The White House on Monday dismissed ratings agency S&P's decision to downgrade the outlook for the United States as a "political judgment" and said progress had been made toward deficit reduction.

President Barack Obama's economic adviser, Austan Goolsbee, said the White House did not agree with the S&P decision. Speaking on MSNBC and CNBC television, he said the United States would achieve a long-term agreement on reducing the U.S. budget deficit.

"I think what the S&P is doing is making a political judgment and it is one that we don't agree with," Goolsbee said on CNBC.

Goolsbee made the comments after longer-dated U.S. Treasury debt prices fell, reversing earlier gains after ratings agency S&P revised the U.S. credit outlook to negative and said the path to addressing budget deficits was not clear.

He noted the president and Republicans are close in terms of the amount of the deficit that should be cut, but disagree on the route toward that goal.

"I believe we can get to some long-term deficit reduction that would address these issues that S&P is discussing," Goolsbee said on MSNBC.

"We shouldn't overreact to something like this," he said on CNBC.

(Reporting by Jeff Mason and Kim Dixon; Editing by Doina Chiacu)