In his roughly 10 a.m. report this morning (HT to an NB emailer), the Associated Press's Steven R. Hurst opened by saying that "The top Republican in the Senate said Congress and the White House were very close to a deal on raising the limit on U.S. borrowing that would avert an unprecedented default on America's debt, ending one of the nastiest partisan fights in recent memory."
In his second sentence, he wrote, based on a statement from Republican Senate Majority Leader Mitch McConnell, that an agreement would "likely extend U.S. borrowing authority, which expires on Tuesday, beyond the 2012 presidential and congressional elections," giving casual readers the impression that default will occur if the borrowing authority ends.
That simply isn't so. Who says so? Moody's says so, as carried in a live blog item at the Wall Street Journal on Tuesday (HT Verum Serum):
“What would Moody’s consider a default? We do not consider delayed payments for obligations other than debt service to be a default.” In other words, President Barack Obama could make good on his warnings that Social Security checks wouldn’t go out, and that wouldn’t constitute a “default.”
Of course not. Default only occurs when you're late making debt payments or fail to make them, just as being late with the gas bill doesn't place a homeowner in default on his or her mortgage.
Oh, and did I say that the Obama administration has also said that default won't happen, just not openly? Yes they have, as Fox Business reported on Monday:
While officials from the Obama Administration raised their rhetoric over the weekend about the possibility of a debt default if the debt ceiling isn't raised, they privately have been telling top executives at major U.S. banks that such an event won’t happen, FOX Business has learned.
While we're in the neighborhood, if the Social Security "checks" (really mostly electronic transfers) don't go out, it will be because President Barack Obama chooses not to let them go out.
Hurst also threw in this whopper at the end of this report:
Obama needs Congress to approve an increase in the government's borrowing authority, in the past increases have been routine, but Republicans, citing the giant U.S. deficit, have demanded huge spending cuts as a condition for approving the increase.
Uh, dude, just four years ago, in mid-March 2006, the Senate vote to increase the debt limit was 52-48. Every Democrat, including Barack Obama and Harry Reid, and three Republicans (Burns, Coburn, and Ensign) voted "No." Vice President Dick Cheney was on hand in case he was needed to break a tie. Hardly routine, Mr. Hurst, and your "increases have been routine" statement allowed for no exceptions. What's really "routine" is watching the AP miscast current events while rewriting history, which seems to be the wire service's two primary missions these days.
Cross-posted at BizzyBlog.com.
