Axelrod: This is a "Tea Party downgrade"

Former White House adviser David Axelrod on CBS' "Face the Nation," August 7, 2011.

Former White House adviser David Axelrod on Sunday pinned responsibility for the recent U.S. economic downgrade on the Tea Party movement, arguing that the group's political "brinkmanship" during debt ceiling negotiations "brought us to the brink of a default"  -- and that, subsequently, "this is essentially a Tea Party downgrade."

In an appearance on CBS' "Face the Nation," Axelrod, currently a top campaign strategist for President Obama, said the U.S. economic downgrade was "largely a political analysis" and that "there's a broad consensus that [the U.S.] is still the safest place to invest your money."

Nevertheless, he argued, the Tea Party was responsible for blocking a comprehensive deal that could have prevented such a downgrade.

"We can debate the strength of the analysis that they did, the history of S&P and so on," Axelrod told CBS' Bob Schieffer, of Standard & Poor's, the credit rating agency that downgraded the U.S. market from AAA to AA+ on Friday. "They made an egregious analytical error here but theirs was largely a political analysis... They want to see the kind of solution that the president has been fighting for... that will be balanced, that will include revenues, that will deal with some of our long-term issues."

"For months, the president was saying, let's get together, let's compromise," Axelrod continued. "We thought we had such an arrangement with the Speaker of the House... then he went back to his caucus; he had to yield to the most strident voices in his party. They played brinkmanship with the full faith and credit of the United States. This was the result in that."

"The fact of the matter is that this is essentially a Tea Party downgrade," he declared. "That clearly is on the backs of those who were willing to see the country default."

Standard & Poor's downgraded the United States' credit rating Friday night for the first time in the history of the ratings. The agency said it was making the move because the deficit reduction plan recently passed by Congress did not go far enough to stabilize the country's debt situation and that the policymaking is not stable or effective as needed to address the current economic challenge.

Stocks fell across the Middle East on Sunday as most regional markets reopened in the aftermath of the downgrade.

David Beers, global head of sovereign ratings for Standard and Poor's, told CBS News' Anthony Mason that the downgrade was a reflection of the increasingly "unpredictable" nature of the debate surrounding U.S. economic decisions.

The contentious Washington debate over raising the debt limit, he said, "highlighted for us something that we've been observing for a number of months now, which is simply the extraordinary difficulty of getting a political consensus about fiscal policy and fiscal policy choices now and in the future."

When asked whether or not U.S. economic instability would result in a one-term presidency for Mr. Obama, Axelrod noted that "at the end of the day, Bob, this election isn't just going to be about the President."

"It's going to be about what direction we want to take as a country, and this debate we just had, Bob, this debate we've just had is kind of a microcosm of that larger discussion we're about to have." Axelrod added.

Former presidential candidate Howard Dean, speaking on "Face the Nation," conceded that Mr. Obama would inevitably have to share responsibility for the downgrade, because he "is going to get the blame and the credit" regardless of what happens -- or "whether he deserves it or not."

"That's what presidents do," he said. But, Dean argued, it was "right wing splinter groups" and the "radical right" that stopped Republicans from voting for a deal that might have prevented a downgrade.

"If you look at the Standard & Poor's report, three times they mentioned that our unwillingness to raise revenues was going to make it impossible for us to regain our credit rating," Dean said. "That's a pretty clear signal. The American people are there, the Democrats are there, a lot of reasonable Republicans are there, but they are terrified of these right wing splinter groups, the radical right, because they are so powerful in the primaries."

Dean argued the downgrade was the Tea Party's "problem."

"They're totally unreasonable," he said. "I think they've been smoking some of that, not just drinking it."

Sen. Lindsey Graham, R-S.C., also appearing on "Face the Nation," disputed the notion that the Tea Party was responsible for the debt limit stalemate and recent economic dip.

"The Tea Party is not the problem here," he told Schieffer. "You can't be $14 trillion in debt unless both parties were working together to get you there."

"Thank God they're here," Graham added, of the movement. "The Tea Party hasn't destroyed Washington; Washington was destroyed before the Tea Party got there."

Axelrod pointed to a series of steps the nation could take to improve its economic standing -- but said the real issue was whether or not Congress had the political will to implement those steps. "The question is whether we have the will ... and whether we can lay the politics aside to work together, Republicans and Democrats, to do it."

"You know we're mourning the loss of these 30 splendid young Americans who died over the weekend in Afghanistan, and it struck me: these guys were probably Democrats and Republicans and came from all kinds of backgrounds, but they were united in their love of their country. And they were willing to give their life for their country," Axelrod said, of 30 Americans who died Saturday after insurgents shot down a U.S. military helicopter during fighting in eastern Afghanistan. "We should honor their memory by doing our duty as well, and taking the steps that are necessary to move this country forward."