Nightly News | August 07, 2011
CARL QUINTANILLA, anchor: The US economy is once again in the cross hairs, a downgrade of America 's debt by a ratings agency. Standard Poor 's could well impact stock markets around the world tonight and our own tomorrow morning. Politicians meantime are debating how the downgrade may affect your pocketbook and whether the US truly deserved it. We have complete coverage tonight. CNBC's chief Washington correspondent John Harwood starts us off. John , good evening.
JOHN HARWOOD reporting: Good evening, Carl . Obama administration officials remain furious about S&P 's decision to downgrade US debt , but they also have to worry about minimizing its effects. Hoping to calm markets, Treasury Secretary Tim Geithner ended uncertainty about his future by announcing he'll remain on the job rather than return to New York . In an exclusive interview with NBC News , Geithner said US Treasuries remain safe and sought to reassure Americans worried about interest rates on mortgages and auto loans, while blasting S&P 's decision.
Secretary TIMOTHY GEITHNER: I think S&P 's shown really terrible judgment and they've handled themselves very poorly and they've shown a stunning lack of knowledge about basic US fiscal budget math. And I think they drew exactly the wrong conclusion.
HARWOOD: But the president, who returned from Camp David this afternoon, faces a huge task as a brewing debt crisis in Europe compounds economic jitters around the world. Stocks in Israel , Dubai and Saudi Arabia dropped over the weekend. If the same happens in Asia , that could rattle American investors tomorrow morning.
Dr. ALAN GREENSPAN (Former Federal Reserve Chairman): The initial reaction in my judgment is going to be negative. What I think the S&P thing did was to hit a nerve that there's something basically bad going on. And it's hit the self-esteem of the United States , the psyche.
HARWOOD: S&P officials warned of a one in three chance of another downgrade next year if America 's fiscal position gets worse or political gridlock becomes more entrenched. So far there's no sign that either Republicans or Democrats are turning down the heat.
Senator JOHN KERRY (Democrat, Massachusetts): This is the tea party downgrade because a minority of people in the House of Representatives countered even the will of many Republicans in the United States Senate who were prepared to do a bigger deal.
Senator JOHN McCAIN (Republican, Arizona): Well, I agree that there is dysfunction in our system and a lot of it has to do with the failure of the president of the United States to lead.
HARWOOD: For many Americans the big question is when the economy will start growing faster and adding more jobs. Secretary Geithner expressed confidence that the US at least can avoid a double-dip recession.
Sec. GEITHNER: Our country is much stronger than Washington . We have a very resilient economy . We're a very strong country. And I have enormous confidence in the basic regenerative capacity of the American economy and the American people .
HARWOOD: And, Carl , even as Republicans criticize the White House over the downgrade, Secretary Geithner turned it right back on Congress , saying they own our credit rating because they have the power of the purse .
QUINTANILLA: John Harwood at the White House tonight. John , thanks.