Think Progress "S&P Director: GOP’s Balanced Budget Amendment Would Hurt America’s Creditworthiness"

[TomCADem]

I know that Rep. Ryan is running around claiming that the S&P downgrade somehow vindicates the Tea Party, and most media outlets are portraying the S&P downgrade as an indictment of the President despite the plain language noting the willingness of a certain party to use the threat of default as a political leverage, but here is the S&P blowing a hole in the idea that the Grover Norquist Anti-Tax Amendment is a magical cure-all.

http://thinkprogress.org/justice/2011/08/09/292008/sp-director-gops-balanced-budget-amendment-would-hurt-americas-creditworthiness/

After the first round of the contentious debt limit fight, congressional Republicans are redoubling their efforts to push through a so-called Balanced Budget Amendment as a solution to the country’s financial woes. Last week, Speaker John Boehner (R-OH) told GOP House members that the best thing they could do during the August recess was to sell the BBA to their constituents. Republicans have even suggested that Standard & Poor’s recent downgrade of U.S. debt from its sterling AAA rating would not have happened, or could be reversed, if a Balanced Budget Amendment were passed.

This weekend the head of S&P, John Chambers, publicly dismissed that idea as foolhardy when he said passage of a BBA would hurt, not help, America’s creditworthiness. Chambers, S&P’s managing director, told CNN’s Wolf Blitzer that a balanced budget measure “would just reduce your flexibility in a crisis”:

BLITZER: Would it be important or not that important for Congress to pass a Balanced Budget Amendment to the Constitution?

CHAMBERS: In general, we think that fiscal rules like these just diminish the flexibility of the government to respond. Also, when Congress has a long track record of trying to bind itself with various rules…But when push comes to shove, they don’t bind very much. So even if you had a Balanced Budget Amendment, you’d have some questions about it’s credibility, and it would just reduce your flexibility in a crisis.