Market’s fall opens door to more partisan sniping
President tries measured tone
WASHINGTON - As stock prices plummeted yesterday, partisan finger-pointing and rancor rose, even as President Obama sought to calm the nation’s jittery investors and voters.
Republicans seized on the 634-point loss in the Dow Jones industrial average - the first market day after Standard & Poor’s downgraded the nation’s credit rating - as further evidence of the administration’s inability to revive the economy.
Democrats in turn renewed their criticisms of conservatives.
“How many wake-up calls do House Republicans need? Their overheated ideology is hurting our economy . . . It’s about real people’s economic well-being now,’’ said Senator John F. Kerry, a Massachusetts Democrat. “We’ve got to summon some adult leadership and get serious fast.’’
The House’s majority leader, Eric Cantor of Virginia, sent a letter to his fellow Republicans accusing the administration of an “antibusiness, hyper-regulatory, pro-tax-increase agenda’’ and urging them to stand firm in their opposition to raising taxes.
“There will be tremendous pressure on Congress to prove that S&P’s analysis of the inability of the political parties to bridge our differences is wrong. In short, there will be pressure to compromise on tax increases. We will be told that there is no other way forward. I respectfully disagree,’’ he wrote.
US Representative Debbie Wasserman Schultz, a Democrat from Florida, called Tea Party Republicans “tyrants.’’
Senator John Cornyn, Republican of Texas, said the administration needed to “pull its collective head out of the sand.’’
It was precisely such partisan sniping and a perception that the parties can no longer work together that prompted Standard & Poor’s to drop the federal government’s AAA credit rating Friday to AA+ for the first time.
After key indexes shed hundreds of points in early trading yesterday, Obama quickly convened an address to assuage Americans. In words and a tone in striking contrast to the strident attacks from both parties, Obama said Washington had both the tools and bipartisan ideas to solve the nation’s budget woes. What’s lacking, he said, is political willpower.
The president said some of the factors, such as problems in overseas markets, are beyond Washington’s control.
“How we respond to those tests, that’s entirely up to us. Markets will rise and fall, but this is the United States of America. No matter what some agency may say, we have always been and always will be a triple-A country,’’ he said.
Senator Scott P. Brown also refrained from partisan jabs. It’s time, the Massachusetts Republican said, to end the accusations, because they were not helping resolve the problems.
“The truth is, over many years both political parties had a hand in the spending decisions that have given us a $14 trillion debt. Now we need to come together constructively to fix the problem,’’ he said in an e-mail.
On the campaign trail, however, the tumbling stock market provided an opportunity for GOP presidential contenders to attack Obama on the economy.
At a forum in New Hampshire, Mitt Romney chalked up the S&P downgrade to a “failure of leadership’’ by Obama.
“Our national balance sheet is not right. That’s what Standard & Poor’s recognized, and we should take appropriate action to correct that,’’ the former Massachusetts governor said at a Greater Concord Chamber of Commerce business round-table.
Romney also used the occasion to tout his own credentials, telling the group that while he was governor of Massachusetts, S&P raised the state’s rating, and he later released a statement detailing the 2005 upgrade.
GOP contender Michele Bachmann, campaigning in Iowa, accused Obama of “hiding out at Camp David, pretending that the Standard & Poor’s ratings do not matter and hoping the markets wouldn’t notice.
“The president says our nation’s economic problems are ‘eminently solvable,’ but it is painfully obvious that President Obama does not have the leadership capacity to put our country back on the right track,’’ she said.
Representative Barney Frank, the top Democrat on the House Financial Services Committee, said he was less interested in allocating blame than in finding a solution to the debt problem, which he believes lies in more cuts to military spending.
The Newton Democrat, however, could not resist a shot at the ratings firm itself. He said he had hoped the downgrade would be ignored, based on the firm’s role in pumping up mortgage securities whose failure played a key role in the 2008 financial meltdown. Instead, he said, “once again our economy is being victimized by S&P’s bad judgment.
“What last week showed, frankly, is that the likelihood of default is even less than we thought, because even with all these terrible political debates, a deal was worked out, and this deal is going to hold in terms of any default,’’ Frank said.
“So I would hope that no one would pay attention.’’
Globe correspondent Shira Schoenberg contributed to this article. Theo Emery can be reached at email@example.com.