On Friday, the Standard & Poor's credit rating agency downgraded the U.S. rating for the first time in history; from AAA to AA+. And the agency’s managing director, John Chambers, told ABC News that there is a 1 in 3 chance that the U.S. credit rating could be downgraded another notch if conditions erode over the next six to 24 months.
On Saturday, Sen. Rand Paul issued a statement calling for the resignation of U.S. Treasury Secretary Timothy Geithner from his cabinet post, effective immediately, for his gross mismanagement of federal economic policy and for his role in the first-ever downgrade of United States debt.
“Secretary Geithner assured everyone that raising the debt ceiling without a plan to balance the budget would not result in a downgrade to our debt,” Sen. Paul said. “He was clearly wrong. Our debt has been downgraded for the first time in history, and now American taxpayers will have to suffer the consequences”
Sen Paul suggested that this is not the first time Secretary Geithner and his team have failed to correctly diagnose or manage an economic problem. During his tenure at the Federal Reserve and as Treasury Secretary, Secretary Geithner has had a direct role in the failure of the Fed to diagnose and act on the housing crisis, and he presided over bank bailouts, auto bailouts and failed trillion-dollar stimulus plans.
Last year, Geithner announced to the American people “welcome to the recovery,” when in fact the our economic crisis has continued. He has contributed not only to the first-ever debt downgrade, but is on the record as clearly disputing it could ever happen (see video below).
“There is plenty of blame to go around. Both parties have contributed to our $14 trillion debt. But it is hard to say this crisis wasn’t predictable, because it was. House and Senate conservatives clearly predicted this, and also offered the only solution that could have prevented our downgrade with our Cut Cap and Balance plan,” Sen. Paul continued. “We must rescue our finances through a Balanced Budget Amendment, and we must do it soon. We must cut spending immediately. And we must get new leadership, and put in place people who have seen problems coming and offered credible solutions, rather than those who continue to misdiagnose and mismanage our economy.”
When he was nominated to the Treasury post by President Obama, it was revealed that Geithner had not paid $35,000 in self-employment taxes for the years 2001–2004. This failure to pay was noted during a 2006 audit by the Internal Revenue Service (IRS), in which Geithner was assessed additional taxes of $14,847 for the 2003 and 2004 tax years. The statute of limitations had expired for 2001 and 2002, and Geithner did not file amended returns or pay the additional amounts due for those years until after he was nominated to be Secretary of the Treasury. He also deducted the cost of his children's sleep-away camp as a dependent care expense, when only expenses for day care are eligible for the deduction.
Watch the video: Tim Geithner said "no risk" of AAA credit downgrade