In a discussion with CNBC's Erin Burnett on Tuesday's NBC Today, co-host Matt Lauer was skeptical of Standard and Poor's downgrading of the chances of the U.S. addressing its massive debt and worried: "Is this a kind of a delicate line for the folks at the S & P to walk? Are they venturing into politics here when they should be sticking to fiscal policy?"
What Lauer failed to mention was that he was using the exact line put out by the Obama administration on Monday. At the top of the 8:00AM ET hour of the broadcast, news reader Natalie Morales reported: "The White House is minimizing the significance of the credit rating agency Standard & Poor's decision to downgrade its outlook on U.S. government debt. The Obama administration saying it underscores the need for a bipartisan agreement to reduce the deficit and that the S & P's political judgment should not be given too much weight."
After Lauer asked about S & P "venturing into politics," Burnett longed for some "objective third party" to inform the budget debate in Washington: "I sort of wish that we could have an objective third party come in and help with this debate....If we could get a third party that isn't seen as partisan with an opinion....That might really help the American people and take some of the politics out of it."
Here is a full transcript of the April 19 exchange:
7:11AM ET
MATT LAUER: Now to Wall Street and the news that sent stocks plummeting to their lowest levels in over a month. The Dow closed down 140 points on Monday after Standard & Poors downgraded the long-term outlet – or outlook – on the nation's debt from stable to negative. What exactly does that mean? CNBC's Erin Burnett is here to explain. Erin, good morning, nice to see you. What is the immediate impact of that?
[ON-SCREEN HEADLINE: Down on the Dollar; U.S. Debt Rating Lowered After Budget Battle]
ERIN BURNETT: So the immediate impact is, okay, basically nothing. But that doesn't mean it doesn't matter. It does matter. What Standard & Poors is doing is finally putting words to something that a lot of people in the market have known for a long time, which is that the situation in this country, what Savannah was talking about with Donald Trump, with entitlements, is a big issue, we have to deal with it or they're going to downgrade. This is basically the warning that comes before the downgrade.
LAUER: Well, let's put their words to the test here. It says that, 'U.S. or the government risks losing it's AAA credit rating in the next two years if the debt issue isn't resolved.' It says the chances of that happening are about one in three. So what would the impact then be to the average American? And do you believe those odds?
BURNETT: Okay, so the impact to the average American is actually rather significant in this case. If they cut the outlook, if they cut the actual rating, what that means is that the U.S. is a riskier credit. That means our interest rates are going to cost us more to borrow. And if it costs us as a country more to borrow, not only do we pay more in taxes to pay that interest, but your credit card rates, and your mortgage rates, and all the other rates that you pay will go up as well. So it does affect everybody.
LAUER: Alright, so Wall Street didn't like this. Stocks were down on Monday. The Treasury, the U.S. Treasury said this, quote, 'We believe S & P's negative outlook underestimates the ability of America's leaders to come to together to address the difficult fiscal challenges facing the nation.' But if you look at what we just went through with the budget crisis and the almost shut-down of our government, both sides – Democrats and Republicans – have dug in their positions on the debt ceiling and future budgets. Is S & P, is the S & P wrong?
BURNETT: The Treasury, I think, was way too optimistic. I mean right now the proof is in the pudding. And that is that the Left and the Right, Democrats and Republicans, have not been willing to work together. What the S & P is worried about is we're not going to get a deal before the election and that's what they think is so crucial. I also think it's important, Matt, to distinguish that the S & P is assuming that we raise the debt ceiling. That is something that is seen as an absolute must-do. Because if you default on your debt, not only does that have huge repercussions, but that could mean people don't get their Social Security checks and other things as well.
LAUER: Real quickly, is this a kind of a delicate line for the folks at the S & P to walk? Are they venturing into politics here when they should be sticking to fiscal policy?
BURNETT: You know, they are a little bit. But I'd say this, Matt. I sort of wish that we could have an objective third party come in and help with this debate. Because as we all know, the fight right now is do we cut spending or do we raise taxes or do we do some combination of the two things? And that's where the two parties can't seem to agree. If we could get a third party that isn't seen as partisan with an opinion on, 'Well, if we do a little bit of this and a little bit of that, then we'll get a solution. That might really help the American people and take some of the politics out of it. So I'd hope that this is actually a good thing that happened.
LAUER: CNBC's Erin Burnett. Erin, nice to see you. Thanks very much.
BURNETT: Good seeing you.
— Kyle Drennen is a news analyst at the Media Research Center. You can follow him on Twitter here.
