Federal Debt

WASHINGTON — Moody's Investor Services warned that it probably would downgrade the Aaa credit rating of the U.S. if government officials don't deal with the nation's debt problems. The credit rating firm said negotiations between Congress and the White House on the nation's 2013 budget and a decision on reducing the high ratio of debt to gross domestic product will be key to acting on its top credit rating. "If those negotiations lead to specific policies that produce a stabilization and then downward trend in the ratio of federal debt to GDP over the medium term, the rating will likely be affirmed and the outlook returned to stable," Moody's said.

New budget proposals this week from influential members of the House Republican and Senate Democratic leadership are the stuff of political caricatures. House Budget Committee Chairman Paul D. Ryan (R-Wis.), last year's Republican nominee for vice president, reprised the spending-cut talking points from his failed campaign with little change and no apparent irony. Senate Budget Committee Chairwoman Patty Murray (D-Wash.), meanwhile, offered the outlines of a budget that increases taxes and spending, while doing little more than buying time on the entitlement programs at the heart of Washington's long-term problems.

Now that two months have passed since the 2012 election, what does Rep. Paul Ryan think the voters' message was? It wasn't a rejection of the Romney-Ryan platform or of the "Ryan Budget" that would have turned Medicare into a voucher plan, Ryan told reporters on Wednesday. "I don't see this [election result] as a rejection of our principles," Ryan said at a Wall Street Journal breakfast. Instead, the message Ryan heard was that Republicans need to make it clear that they're not the party of the rich -- that they're as intent on ending poverty and increasing opportunity as Democrats.

Rep. Gabrielle Giffords, critically wounded by a gunman more than a year ago in Tucson, Ariz., announced Sunday that she will resign from Congress this week to focus on her recovery. In a video posted to YouTube, Giffords, dressed in office attire, also provides more insight into her struggles to recover from a massive brain injury. "I don't remember much from that horrible day," she says of the shooting rampage on Jan. 8, 2011, that killed six and wounded 14. ( Watch video below.

CINCINNATI - President Obama and Republican challenger Mitt Romney dueled Thursday from opposite ends of a state vital to their November chances, framing the election as a choice between failure and economic progress - and differing sharply on who was to blame for years of disappointing job growth. The two had been scheduled to speak simultaneously, but Romney pushed up his speech at a Cincinnati manufacturing plant to get a jump on Obama. He said the president had had 31/2 years to spur recovery after the economy tanked in 2008 and had little to show and not much to offer beyond high-flown rhetoric.

Consider now the debt mess. Americans, it is said, have overborrowed. We have hocked ourselves up to our eyelashes. The staggering debt is said to threaten the economy. But if mass retrenchment tips it into recession, then things will only get worse. Higher unemployment and more business bankruptcies will compound the problems of debtors. It's scary, but is it true? Granted, it sounds plausible. Americans love credit, and our economy constantly devises new ways to borrow.

Seniors with big prescription drug bills, health maintenance organizations awaiting lucrative new subsidies, upper-middle-class families anticipating a fat tax refund, and Iraqi cities expecting new schools or hospitals all have reason to be thankful about President Bush's extraordinary success at pushing his agenda through the Republican-controlled Congress this year. There may be less celebration among the young people who will inherit the tab for these initiatives.

Wallace Magnani lived so frugally that he refused to fix the plumbing in his majestic 70-year-old home and wore tattered, grubby clothes. But he was magnanimous in death, leaving $500,000--the bulk of his estate--to help reduce the federal debt. "He felt the federal government saved his life during the Depression when he was in need," said Robert J. Owen, Magnani's executor. "He wanted to give something back." With the national debt already around $4.9 trillion, Magnani's gift won't go far.

Newt Gingrich wanted to show up in the Chicago suburbs Wednesday with two new reasons Republicans should make him their presidential nominee: Alabama and Mississippi. Instead, with two more losses and no momentum boost, he stuck to an old standby: He's the smartest guy in the race. Putting himself in the company of Abraham Lincoln and Ronald Reagan, he argued that he is the only candidate running in the GOP contests who gets science and technology and who knows how to employ it to revolutionize the federal government.