By Peter Schroeder - 08/10/11 07:39 PM EDT
Rep. Jerrold Nadler (D-N.Y.) wants to do away with the debt limit, and will introduce a bill to do just that.
Calling the debt limit “truly arbitrary” while blasting Republicans for playing a “dangerous game of chicken” with it, the liberal congressman said Wednesday he was drafting a bill to eliminate it.
Nadler also set his sights on credit-rating agency Standard & Poor’s, which last Friday issued the first ever downgrade of the nation’s once-sterling credit rating, setting off a tumultuous few days for financial markets.
S&P cited the heightened political drama that surrounded the debt-limit debate as a primary reason for the downgrade from AAA to AA+. It blasted policymakers for using the debt limit and threat of default as “political bargaining chips,” while noting that the two parties have shown little to no ability to make large steps to address the nation’s broader fiscal challenges.
S&P’s decision was “outrageous and unprecedented,” Nadler said, adding that the agency was in no position to judge after the financial crisis.
“This from S&P, which has no credible standing to downgrade anything and was itself complicit in creating the current meltdown by enthusiastically bestowing high ratings on risky mortgage-backed securities,” he said.
While blasting S&P, Nadler’s bill actually hits the same note as fellow rater Moody’s Investors Service.
In the midst of July’s debt-limit drama, Moody’s suggested Washington should scrap the debt limit altogether, saying it created “periodic uncertainty” as lawmakers publicly haggled over hiking it. Rather, it offered suggestions for how other nations keep a tight grip on their finances that would not come with the same level of distressing theatrics.
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