Almost all of the GOP presidential hopefuls with gubernatorial experience can boast upgraded credit ratings for their respective states during their tenure in office, with the exception of former Minnesota Gov. Tim Pawlenty (R).
As Republicans attack President Obama for this week’s Standard & Poor's (S&P) report warning of a negative outlook on U.S. debt and a possible downgrade in the nation's credit rating, each of the governors considering a White House bid have their own paper trails to measure up against Obama's.
Former Massachusetts Gov. Mitt Romney (R), former Arkansas Gov. Mike Huckabee (R), former Alaska Gov. Sarah Palin (R), Mississippi Gov. Haley Barbour (R) and Indiana Gov. Mitch Daniels (R) have all achieved an upgrade in their respective state's credit rating during their time in office, with Daniels's work being the most substantial, resulting in a prime credit rating for the Hoosier State.
Indiana's credit rating has gone from AA to AAA, the highest rating given by the S&P, since Daniels took over in 2005. Moody's, the other major rating service, bumped up Indiana's rating last April to Aaa, also its highest rating.
Romney scored an upgrade from AA- to AA in S&P's ratings in July of 2005, while Moody's left the Massachusetts credit rating unchanged at Aa2 during Romney's tenure.
S&P left Minnesota's AAA rating in 1997 intact during Pawlenty's time in office, but Moody's downgraded the state's rating from Aaa to Aa1 in 2003, Pawlenty's first year in office.
A Pawlenty spokesman pointed out the S&P’s high marks and noted that Fitch, another prominent ratings agency, gave Minnesota high marks during Pawlenty’s tenure.
"Moody's rating change came only five months after Gov. Pawlenty was sworn in in 2003, and that year he successfully balanced the budget without raising taxes — just as he did with every budget as governor,” spokesman Alex Conant said. “Under Gov. Pawlenty's leadership, the two other ratings agencies gave Minnesota their highest ratings throughout the governor's time in office, and Minnesota ranks in the top 10 states overall. As president, Gov. Pawlenty would cut spending and restore fiscal responsibility in Washington — just as he did in Minnesota."
Moody's revised its outlook for Minnesota's credit to negative in early 2010, an outlook that was restored to "stable" several months later after Moody's recalibrated its municipal ratings to fit its global scale.
The S&P and Moody’s ratings provide an assessment of a state or institution's ability to meet its financial obligations. The lower the credit rating is for an entity, the more risk there is in holding debt for that institution. For governments, the ratings typically represent an assessment of a state's fiscal situation and its ability to address future fiscal issues.
Standard & Poor's and Moody's are the two most widely recognized rating agencies. They independently hand out revised ratings and outlooks, which can move markets' impressions of different states' debt.
Moody's bumped Mississippi's rating from Aa3 up to Aa2 last April, while S&P has left the state's rating at AA during Barbour's time in office. S&P put Mississippi on a watch list for a revised negative outlook on its credit at the height of Hurricane Katrina in August of 2005, but restored Mississippi to a stable outlook that November.
Huckabee and Palin also scored upgrades in their states' ratings during their time in office. S&P bumped Alaska's rating up to AA+ from AA in March 2008, while Moody's left it unchanged at Aa2. During Huckabee's time in office, S&P left its rating unchanged at AA, while Moody's bumped the state from Aa3 to Aa2 in March of 2000.
Utah's prime rating was left unchanged by both services during Ambassador to China Jon Huntsman's time as the Republican governor of Utah, from 2005-2009.
Palin, Daniels and Barbour, unlike a number of Republicans on Capitol Hill, have been silent about the revised S&P rating for U.S. debt.
But Romney, Huckabee and Pawlenty have used the report, which rattled markets on Monday, as a political cudgel against the Obama White House. Both have announced their presidential exploratory committees, while the others have not formally declared their 2012 intentions.
Romney, who's made his economic experience a centerpiece of his presidential campaign, has been the most active member of the Republican field in criticizing the S&P report.
On Wednesday, he called on Obama to meet with S&P officials after the agency revised its outlook on U.S. debt to "negative" and warned there was a chance that it could downgrade the U.S. credit rating if lawmakers couldn't reach an agreement on how to address long-term debt.
"The president really ought to personally sit down and meet with S&P," Romney said Wednesday on KCBQ radio. "I did that when I was governor; I met with the ratings agencies and talked about our future and tried to instill confidence in our future because, look, how they rate our debt and how they rate our future as a nation will affect the interest costs that we end up paying and will affect homeowners and borrowers all over the country."
Huckabee said S&P's revision risked catastrophe for the U.S. unless Washington took serious steps toward deficit reduction.
"We all know how hard it is to borrow money with poor credit, and if the United States loses its AAA rating it would mean America would have to pay higher interest rates on money we borrow," he wrote on his website Wednesday. "For a government that doesn't want to put away its credit card, this could be a catastrophe."
Pawlenty, meanwhile, has said the S&P report is a clarion call for government to "restructure" at all levels.
He has drawn heavily on his record as governor of a traditionally liberal state to promote his bid for the Republican nomination, time in which he faced a number of fights with the State Assembly over spending levels.
"In Minnesota, a blue state, we went through all these same battles, on spending, on entitlement reform and the like, and we got it under control," Pawlenty told Nevada journalist Jon Ralston in a Tuesday night interview. "But it's going to take leadership, it's going to take a president who is willing to get out in front of these issues, and we are going to have to reform and restructure government. It's that simple."
During his time in office, Pawlenty endured a showdown with state lawmakers that led to a brief shutdown, and fought for his right to use "unallotments," or an asserted executive authority to rescind spending, all the way to the state Supreme Court. The court sided against Pawlenty, one of the reasons the former Minnesota governor gives for the budget shortfalls he faced during his final years in office.