The White House and congressional Republicans on Tuesday signaled a new willingness to work jointly to reach a long-term budget deal.After deriding President Obama’s suggestion for debt negotiations to be led by Vice President Joe Biden, congressional Republicans announced they would send House Majority Leader Eric Cantor (Va.) and Senate Minority Whip Jon Kyl (Ariz.) as their representatives for the May 5 talks.
Separately, Obama expressed hopefulness that a deal could be reached. “There will be those who say that we’re too alienated, that the partisanship is too stark,” Obama said at a town-hall event in Virginia. “But I’m optimistic. I’m hopeful. Both sides have come jointly before. I believe we can do it again.”
Signs of cooperation and hopefulness came one day after a sharp warning from the Standard & Poor’s credit rating agency, which downgraded its outlook for U.S. debt from stable to negative.
The Monday report was the first overt indication from Wall Street of worry that Washington would fail to reach a budget deal before the 2012 election. If S&P downgraded the AAA rating on U.S. bonds, it could lift interest rates and make it that much more difficult to lower the national debt.
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