Debt: Obama Praises Gang of Six Plan; Five States May Face Credit Downgrade

The Takeaway’s Washington correspondent, Todd Zwillich, called it correctly on yesterday’s show, saying that the Gang of Six –  a bipartisan group of senators who have been trying to formulate a deficit-reduction plan for months –  would make a comeback. President Obama praised praised the group’s proposal yesterday, calling it a “very significant step”  toward a budget negotiation. Meanwhile, it’s old news that if Congress fails to raise the debt ceiling by August 2, the government’s  credit rating will sink. But here’s a lesser-known fact: the downgrade would have a trickle-down effect, resulting in five states  losing their top ratings  from Moody’s along with the U.S. The states are” Maryland, South Carolina, New Mexico, Tennessee and Virginia. Louise Story, finance and Wall Street reporter for our partner, The New York Times, explains why these states are at risk.