Republican Mitt Romney, who is raising funds to run for the White House in 2012, ripped President Barack Obama on Monday over last week's threat by an influential ratings agency to cut the U.S. credit rating, and called on the federal government to reduce spending.
Standard & Poors said on April 18 that it might downgrade the United States' prized AAA credit rating unless the Obama administration and Congress find a way to slash the $1.4 trillion annual federal deficit within two years.
The warning has given Republicans another opening to attack Obama's policies at a time the U.S. economic recovery seems is losing steam.
"S&P's action is a significant marker of our country's deteriorating economic position," Romney, a former Massachusetts governor, wrote in an opinion piece in the New Hampshire Union Leader newspaper. It's "a giant wake-up call," he said.
Romney criticized Austan Goolsbee, one of Obama's top economic advisers, for downplaying S&P's move, and Obama himself for embarking on a "weeklong campaign swing" even as the S&P warning prompted officials in Washington and on Wall Street to discuss the debt problem.
Calling Treasury bond ratings "measurements of the fiscal strength of the country," Romney warned that the United States could be in for slow-motion shock therapy in the form of "reduced growth, chronic high unemployment and a lower standard of living."
The only way to avert a crisis "is to take action that is rooted in the need to reduce spending," he said.
Romney said this month he has formed an exploratory committee to raise money for a challenge to Obama.
An unsuccessful U.S. presidential contender in 2008, Romney opened his campaign as a well-funded early front-runner among Republicans. He ranks highly in some early polls of potential candidates, and is particularly favored in the key early-voting state of New Hampshire.
Romney, 64, was nearly even with Obama in a McClatchy-Marist poll last week that asked U.S. voters who they would support if the two men ran against each other in the 2012 election.
The U.S. federal deficit has ballooned since the financial crisis of 2008. For every dollar that the federal government now spends, it borrows 40 cents.
As Republicans float their own proposals, Obama this month laid out plan to cut the budget deficit by $4 trillion over 12 years in an attempt to show that he is serious about tackling U.S. fiscal problems.
But the president has also warned that if the United States slashes spending too deeply, "using a machete instead of a scalpel," it could face another recession.
The first reading of U.S. first-quarter GDP growth will be released on Thursday. Estimates have slipped recently, to 2 percent from closer to 3 percent at the start of the period, with economists saying bad weather, the Japanese earthquake and tsunami, and higher imports sapped the economic recovery.
(Editing by Philip Barbara)
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