The RP’s Budget Crisis Update- August 11

Following Senate Majority Leader Harry Reid’s selection of his delegates to the Joint Select Committee on Deficit Reduction, both Senate Minority Leader Mitch McConnell and Speaker of the House John Boehner have named their choices for the committee. From the Senate are Pat Toomey of Pennsylvania, Jon Kyl of Arizona, and Rob Portman of Ohio. The selection of Toomey, a one-time president of the Club for Growth, is likely a nod to his broad Tea Party support, and while Portman previously served as Director of the Office of Management and Budget under President George W. Bush, Kyl is notorious for walking out of budget talks with Vice President Joe Biden. On the House side are Jeb Hensarling of Texas, Dave Camp, and Fred Upton, both of Michigan. Hensarling, chairman of the House Republican Conference, will serve alongside Senator Patty Murray (D-WA) as co-chair of the committee. Camp served on the Simpson-Bowles Commission, although he voted against all his recommendations, and Upton serves as chairman on the Committee on Energy and Commerce. All six appointees have signed Americans for Tax Reform’s Taxpayer Protection Pledge. [National Journal]

Senator Olympia Snowe (R-ME) has come out strongly against the hyperpartisan environment that led to the debt ceiling debacle, saying she was embarrassed by lawmakers’ behavior and calling the current Congress “the worst” she’s ever seen in her political life. Snowe, a moderate Republican, is being targeted by multiple Tea Party challengers for the 2012 primary. [Huffington Post]

A group of moderate to conservative Democrats in the Blue Dog Caucus, including Jim Cooper of Tennessee, Henry Cuellar of Texas, Michael Michaud of Maine, and Mike McIntyre of North Carolina, have signed a letter urging Speaker Boehner to cancel the House of Representatives’s August recess so as to address the fiscal crisis currently facing the country. [The Hill]

For the third time in the last week, the Dow Jones Industrial Average plunged by more than 500 points Wednesday, falling 4.63% to 10,718 points, a drop of 520 from the previous day. This brings the total decline in the index to more than 2,000 points in the last three weeks. Other American indices performed similarly Wednesday, with the NASDAQ and S&P 500 both dropping by around 4%. [Huffington Post]

Standard & Poor’s has released some of its specific reasons for downgrading the United States to a AA+ bond rating, and it is more political than fiscal. Citing the political gridlock in Washington, and in particular the Republicans’ unwillingness to compromise on raising revenues, the report sends the message that S&P does not believe that any sort of meaningful debt-reduction compromise can come out of the current political environment in Washington. [Reuters]