• With: Rep. Joe Walsh, R-Ill.

    NEIL CAVUTO, HOST OF “YOUR WORLD”: Again, I want to step back and explain this. I know this gets to be weighty material.

    These CDOs, these collateralized debt obligations, were essentially the money, a lot of the bad mortgages and everything packaged, sold to investors and given the top grade. And in retrospect of course we realize they didn’t deserve that top grade, but it then led to the financial house of cards we knew as the great meltdown of 2008.

    That was then and fears that it could repeat itself now, but a little bit late to start grading and penalizing now, especially when you only cite one big name. Regardless, regardless, this is not the first time we’ve seen the White House using what some are calling some very strong-arm tactics.

    Do any of you remember when the CBO director was summoned to the White House then and only then after he released what seemed to be a prohibitive, indeed critical report of the cost of the president’s health care plan, comes out of the White House and the next day comes out with a report that is favorable to the math on the health plan, or when the president called out greedy investment firms for not going along with the terms of his Chrysler bailout, or -- or when he blasted members of the Supreme Court during his State of the Union speech?

    Are we seeing Chicago politics at work here with and beyond the S&P? Now, Democrats of course have been saying nonsense.

    Illinois Republican Congressman Joe Walsh says all this makes perfect sense and fits a pattern of behavior that he doesn’t like.

    Well, it is weird, Congressman. It is weird.

    REP. JOE WALSH, R-ILL.: Here I am in Chicago, Neil. Good to talk to you.

    It’s odd. There is something almost Chicago-style about this. And it’s so heavy-handed. I mean to--As your previous guest said, the timing here, a month or so after the downgrade, S&P is singled out. Clearly, the Obama administration is trying to show how tough they are on Wall Street, go after the big banks. Now they’re going to go after the credit agencies. But the timing here is suspect and it is odd that clearly they are retaliating against the S&P. And the other thing, Neil, I walk away with is, it fits this pattern of the Obama administration where it’s everybody else’s fault but theirs.

    I went through that in the debt ceiling fight. It wasn’t the debt crisis that was to blame; it was all of those House Republicans. Washington’s so dysfunctional. They continue to blame the Bush administration, hurricanes, earthquakes, and now it’s the credit agencies’ fault. You get tired of this.

    CAVUTO: Congressman, having covered it back then, certainly these credit ratings agencies -- the S&P not alone, by the way. Everyone was playing the same game and awarding very generous grades to entities and institutions that didn’t deserve them.

    But there were plenty others doing it. So all I’m saying is if you’re going to go after one, you should go after all. And now we tried to reach out to S&P to get those folks to comment on this and they declined. That’s their want. But I’m wondering now, what next?

    WALSH: Well, again, it appears to be some sort of payback.

    To single out S&P – you know, I sit on Oversight and Reform and I think this is something Congress ought to look at. You rightly acknowledge, Neil, there’s politics involved in the whole rating agency business to begin with.

    But you know look, the Obama administration could be a little bit more subtle than this, waiting a month-and-a-half and then you specifically target S&P? I think Congress ought to look at it. The administration, Neil, has a pattern of rewarding friends. I think we will see that with Solyndra and some of these green job companies where government funds were...

    (CROSSTALK)

    CAVUTO: But are you saying, Congressman, that this wouldn’t have happened to S&P had it not downgraded U.S. debt? Whether you are for or against that decision, you are saying that had S&P not decided it, it wouldn’t have seen this day today?

    WALSH: I don’t know how you couldn’t say that, Neil; how you could not say a month-and-a-half after the downgrade they have been singled out and targeted. I don’t how you couldn’t come to a different conclusion.

    CAVUTO: Weird.

    All right, Congressman, good seeing you again. Thank you very much, Joe Walsh, in Chicago.

    WALSH: Thanks, Neil.

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