Sarah Babbage

Sarah Babbage is a fall 2010 intern at the Prospect.

Recent Articles

S&P Continues to Discredit Itself

This week Standard & Poor’s provoked what amounted to a non-event when it lowered its outlook on the U.S. debt from “stable” to “negative,” based on its expectation that Congress isn’t going to reach a meaningful compromise on deficit reduction in the near future. The downgrade came just days after the Senate subcommittee on Investigations released its massive report on the causes and villains of the financial crisis. The report indicted S&P, along with Moody’s, for keeping the credit ratings of mortgage-backed securities and collateralized-debt obligations artificially high, then sharply lowering them when the foreclosure rate began to skyrocket in 2007. It explains: It was not in the short term economic interest of either Moody’s or S&P, however, to provide accurate credit ratings for high risk RMBS and CDO securities, because doing so would have hurt their own revenues… In the end, Moody’s and S&P provided AAA ratings to tens of thousands of high risk RMBS and CDO...

Cutting Medicaid Will Hurt at the Polls, Eventually

It is widely believed that Paul Ryan chose to exact his most severe spending cuts on Medicaid because its low-income beneficiaries vote Democrat if they even turn out for elections, so cutting a program that benefits them won’t hurt the GOP too much at the polls. Unfortunately, eliminating $207 billion in spending, the amount Ryan’s plan will cut, kills jobs and hurts the economy, no matter what program it comes from. According to newly released numbers from the Economic Policy Institute, the plan will eliminate 2.1 million jobs within five years. That’s almost as many as Ryan projected his plan would create in 10 years, based on a study from the Heritage Foundation that it has since admitted was a bit too optimistic. These job losses won’t be the cushy public-sector jobs Republicans deride, with their generous pensions and high wages (which, in reality, are 6 percent lower than the private sector). Because Medicaid doesn’t have a lot of administrative costs or overhead, 96 percent of...

When Deficit Hawks Attack (Each Other)

Erskine Bowles and Alan Simpson , chairs of the president’s fiscal commission, have been largely out of the spotlight since the report they produced this fall failed to garner support even within their own group. The plan offered some dramatic and imbalanced suggestions on reducing the deficit, deriving almost 78 percent of its savings from cuts to government spending. Its entitlement-program reforms spared the poorest Americans, but enacted disproportionate cuts on lower-income earners, decreasing Social Security benefits while increasing the retirement age, and also cutting Medicare and Medicaid.

A Party of Unpopular Ideas

Writing on Commentary’s blog, Peter Wehner says Wisconsin Rep. Paul Ryan’s 2012 budget will allow the GOP to reprise their title as the “party of ideas”: . . .Ryan’s 2012 budget, released today and accompanied by an op-ed in the Wall Street Journal , is a document of tremendous ambition and integrity, unlike any we have seen in our lifetime. What it does is to restore the GOP’s reputation for intellectual vitality. This cannot be achieved through incantations or the recitation of shallow talking points; it can only be done by offering a comprehensive governing agenda along with carefully argued and compellingly articulated programs of reform.

Another Late-Night Attack on State Workers

Late last night, long after normal business hours, the New Hampshire House became the latest state government to pass legislation balancing the budget on the backs of the poor and vulnerable. The most contentious part of the legislation gets rid of negotiation rights for the state’s 70,000 public employees if their contracts expire before a new agreement has been reached. The Republican House members pushing the legislation can’t even get their story straight on why the budget needs to be balanced this way. One member cited the $50 million the government will save cutting health benefits from employees when their contracts expire. The bill’s sponsor, Rep. Neal Kurk , explained, “Nobody likes to change these kinds of relationships. Nobody likes to do any of the other things that we have to do, but it is the sensible part of a coherent plan to make the budget work.” He and other Republicans are fully aware of how unpopular the provision is: The Speaker pushed the bill up for debate last...