GOP Candidates Seize on Downgrade Ahead of Debate, Straw Poll

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As President Obama tries to downplay the country's first-ever credit rating downgrade in the face of a Wall Street freefall, the decision by Standard & Poor's has offered no shortage of fodder for 2012 presidential candidates ahead of a debate Thursday in Iowa.

The candidates slammed the president over the weekend when S&P first announced it was lowering the U.S. rating from AAA to AA+. After the agency expanded its downgrade Monday to include Fannie Mae and Freddie Mac, and after stocks plummeted on Wall Street amid widespread economic fears, the candidates made clear that the news of the past few days will not soon be forgotten on the campaign trail.

"Mr. President, the American people have spoken and now a credit ratings agency has echoed their message -- your economic policies have failed," Rep. Michele Bachmann, R-Minn., said Monday.

The fresh criticism came as the Dow Jones Industrial Average closed down more than 600 points -- the Dow is down nearly 2,000 points since mid-July.

Bachmann, who has centered her campaign on concerns over the debt, is one of several candidates angling for conservative support and appealing to fiscal anxiety ahead of a key Iowa straw poll Saturday. The candidates will have one last opportunity to hit their economic message on the national stage Thursday at the Republican debate -- sponsored by Fox News, the Washington Examiner and the Iowa Republican Party.

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For the candidates, the downgrade folds into their argument that the president has not done enough to tackle overspending in Washington. Former Massachusetts Gov. Mitt Romney told a New Hampshire crowd Monday that the S&P decision shows the nation's finances are out of balance, calling on Obama to exert the leadership necessary to restore credibility.

"President Obama and his administration have been a failure," former Pennsylvania Sen. Rick Santorum said in the wake of the downgrade.

The candidates are virtually unified in their criticism of the administration's spending habits, though how they distinguish their respective approaches for reversing the trend presumably will be on display Thursday.

John Tate, campaign manager for candidate Rep. Ron Paul, R-Texas, offered one approach, without getting too far into specifics. He said in a written statement that the congressman would veto "any spending bill that contributed to an unbalanced budget" and, further, "balance the budget in the first year of his term."

Obama and his aides have tried to downplay the S&P decision and its implications. The president on Monday said "gridlock" contributed to the change, since S&P cited the toxic political atmosphere as well as the U.S. fiscal trajectory in its decision. But Obama expressed confidence that Congress could move beyond that gridlock and said the markets continue to view the United States as a AAA nation anyway.

"We very clearly are a AAA country with a AAA economy, and we are the safest of safe harbors, globally, in terms of investments," White House Press Secretary Jay Carney said Monday. "And that is the same today as it was last week."

Though Carney would not use the same term, Obama campaign adviser David Axelrod also said over the weekend that the S&P decision amounted to a "Tea Party downgrade."

Republicans are not taking the downgrade decision lightly. Several are now calling for Treasury Secretary Timothy Geithner to step down or be fired, though the administration says Geithner is staying on.

Republican National Committee Chairman Reince Priebus, the latest to call for Geithner's ouster, said Monday the downgrade was a "direct result of Obama and Geithner's failure to cut the debt."

"For two and half years, Republicans warned of the dangers of Obama's reckless spending. All the while, he and Geithner proposed record deficits and absolutely no plan to cut spending. And just four months before this embarrassing downgrade, Geithner vowed it would never happen. The Treasury Department is no place for such irresponsible stewardship," Priebus said.