Missed Chance to Curtail Ratings Agencies

On Wednesday morning the managing directors of Wall Street’s biggest bond rating agencies lined up in front of the House Financial oversight committee. To the administration and the Treasury, these men currently represent their worst nightmare. In the last two weeks, Moody’s, Standard and Poor’s, and Fitch have all threatened to downgrade America’s triple-A debt rating, a move that would cost the government billions in raised interest rates and spark disastrous macroeconomic consequences for the country. S&P has been the most aggressive of the bunch, warning that there’s a 50 percent chance it will pull the trigger in no more than 90 days, unless the government passes a $4 trillion deal to reduce the deficit. At the hearing, S&P president Deven Sharma hinted that “some of the plans to reduce debt levels” might appease his almighty agency, but then refused to say which one. “What’s interesting is for them to put out a deficit cut number,” Republican congressman Randy Neugebauer, the chairman of the Oversight Subcommittee, told me after the hearing. “That was … political. That was probably inappropriate.”