McClintock: Market loss linked to deficit spending
GRASS VALLEY, Calif. andamp;#8212; Monday’s continued market decline is ultimately a consequence of longterm deficit spending at the national level, Rep. Tom McClintock, R-Elk Grove, said Monday.The Dow Jones industrial Average fell 634.76 points, the first trading day since Standard andamp; Poor’s downgraded American debt on Friday. It was the sixth-worst point decline for the Dow in the last 112 years and the worst drop since December 2008, the Associated Press reported.andamp;#8220;The stock market is reacting to a number of different signals,andamp;#8221; McClintock told The Union in Grass Valley. andamp;#8220;The downgrade is a direct result of deficit spending that has gotten out of control.andamp;#8221;The downgrade andamp;#8220;shouldn’t be surprising,andamp;#8221; McClintock said. andamp;#8220;Standard andamp; Poor’s has been clear and explicit, over the last two months,andamp;#8221; that the U.S. must reduce the federal budget deficit projected over the next 10 years by at least $4 trillion to retain its AAA credit rating, the congressman said.andamp;#8220;The plan adopted by Congress didn’t come close,andamp;#8221; he added.During recent debt ceiling talks, McClintock met with David Beers, head of Standard andamp; Poor’s sovereign rating group, the congressman added.andamp;#8220;He was very explicit about what it would take to keep a AAA-rating,andamp;#8221; McClintock said. andamp;#8220;When I asked him, andamp;#8216;What about $3 trillion?’ (in budget cuts), he was emphatic: andamp;#8216;No.’ … Congress adopted a budget of $2.4 trillion (in budget cuts).andamp;#8221;McClintock voted against The 2011 Budget Control Act because it did not meet the requirement to retain Standard andamp; Poor’s AAA rating, he added.andamp;#8220;Government has grown beyond our ability to support it,andamp;#8221; McClintock said andamp;#8212; and he warned of a andamp;#8220;sovereign debt crisisandamp;#8221; without a change in course.Both Republican budget plans that passed the House of Representatives earlier this year would have made the cuts necessary to preserve the Standard andamp; Poor’s rating, but were defeated in the Senate, McClintock said.McClintock has posted a detailed critique of the 2011 Budget Control Act at http://tommcclintock.com
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