Fight Over Debt Ceiling Risks Credit Rating, Moody’s Warns

The warning, from one of the agencies whose assessments of creditworthiness help determine interest rates, amounted to a stern reminder from Wall Street to Washington that global financial markets are watching the budget battle closely and that a standoff or brinksmanship could have economic consequences.

Both sides seized on Moody’s statement to reinforce their bargaining positions, with Republicans demanding that President Obama get more serious about deep spending cuts and Democrats saying that Republicans are risking a financial crisis in pursuit of an ideological agenda.

Moody’s said a review of the credit rating was “likely” in July, given that “the risk of continuing stalemate has grown.” Its warning followed a similar one from another major ratings firm six weeks ago, and it came as the administration met Thursday with both House Republicans and Democrats in search of a deal.

The treasury secretary, Timothy F. Geithner, met on Capitol Hill with House freshmen, including Republicans who have suggested that they see little or no risk in a showdown over the debt limit. Citing the Moody’s statement, Mr. Geithner urged them to support raising it or risk an economic crisis.

“We didn’t create this mess,” one Republican told Mr. Geithner, according to a person in the room.

Independent analyses have shown than more than half of the $14.3 trillion debt is from policies enacted during the past decade when Republicans controlled both the White House and Congress, and much of the rest from lost revenues and stimulus spending and tax cuts since Mr. Obama took office at the height of the financial crisis and recession.

Mr. Geithner, as he left the Capitol, told reporters: “I’m confident two things are going to happen this summer. One is we are going to avoid a default crisis. And we are going to reach agreement on a long-term fiscal plan.”

Representative Austin Scott, the Georgia Republican who is the leader of the freshman class, said after the meeting that House Republicans had a “fundamental” difference with Democrats on taxes: instead of new tax revenues, the Republicans want additional tax cuts to increase economic growth. Still, he said, “I think we are all hopeful we will get to a resolution.”

Earlier, Mr. Obama and Mr. Geithner met privately with House Democrats at the White House about debt-reduction matters, following a similar session on Wednesday with House Republicans.

“Just as he discussed with the Republican caucus, the president highlighted the need for both parties to work together to take a balanced approach to deficit reduction, one that allows us to live within our means without hurting our ability to invest in the future or burdening our middle class or seniors,” an administration official said. 

House Democrats said they would support Mr. Obama if he reached a compromise with Republicans that included long-term spending cuts, but not to Medicare benefits, as well as higher tax revenues, according to those briefed on the meeting.

The House speaker, John A. Boehner, said in a statement, “The White House needs to get serious right now about dealing with our deficit and debt.” He interpreted the Moody’s report as bolstering his contention that “a credible agreement means the spending cuts must exceed the debt-limit increase.”

Moody’s, however, made no mention of how a deficit-reduction agreement should be structured.

The Moody’s report was unexpected. In April, Standard & Poor’s lowered its outlook for the AAA rating on United States debt — but not the rating itself — to negative from stable. Moody’s cautionary note was more pointed in that it was pegged to the current political maneuvering over the debt limit and it urged a resolution weeks sooner than the White House and Congressional leaders were aiming for.

Its warning was two-pronged. First, Moody’s said, if Congress does not increase the Treasury’s borrowing authority in coming weeks, the nation’s credit rating may be lowered “due to the very small but rising risk of a short-lived default.” That is likely to translate into higher interest rates at a time when the recovery shows signs of slowing again.

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Couple Sentenced to Prison in 18-Year Kidnapping Case

Phillip Garrido, 60, received a term of 431 years in prison. His wife, Nancy, 55, was sentenced to 36 years to life. They waived the right to appeal as part of their sentences.

Ms. Dugard, who was kidnapped at age 11 and held for 18 years, was not in the courtroom. But her mother, Terry Probyn, read a statement from Ms. Dugard, who is now 31.

“There is no God in the universe who would condone your actions,” Ms. Dugard wrote. “You stole my life and that of my family.”

But, Ms. Dugard told the Garridos, “You do not matter anymore.”

Ms. Probyn also spoke of her own suffering as she wondered what had happened to her blond, blue-eyed daughter after the abduction. “I thought I was going insane,” she said, adding, “My baby was gone.”

Hands shaking, her voice rose. “It was you, Nancy Garrido, and it was you, Phillip Garrido, that broke my heart,” she said, adding: “I hate you both.”

The judge, Douglas C. Phimister of El Dorado County Superior Court, was stern and scolding in a lengthy dissection of Mr. Garrido’s life as an experienced and manipulative criminal who snatched Ms. Dugard off a South Lake Tahoe street and then raped and imprisoned her. “You took a human being and turned them into chattel,” Judge Phimister said. “You reinvented slavery.”

The Garridos sat placidly in court, hands in the pockets of their orange jumpsuits.

The couple had confessed to their crimes and pleaded guilty in April to kidnapping Ms. Dugard in South Lake Tahoe, about 50 miles east of Placerville, and then holding her at their home outside Antioch, Calif., a Bay Area suburb.

Mr. Garrido, a convicted sex offender, raped Ms. Dugard, eventually fathering two girls by her. Ms. Dugard became pregnant with her first child at 13, and for a second time when she was 16.

In court on Thursday, Stephen Tapson, a lawyer for Ms. Garrido, read a statement on her behalf, saying that while “being sorry is not enough,” she loved both Ms. Dugard and her two children. Of her sentence, Ms. Garrido said, “I deserve every moment of it.”

In August 2009, the authorities discovered Ms. Dugard after the campus police at the University of California, Berkeley, alerted the parole authorities to Mr. Garrido’s suspicious activities and statements made on campus. It was soon discovered that Mr. Garrido, who had served 11 years in prison for the rape of a Nevada casino worker in 1976, had been holding Ms. Dugard at his home and in a secret backyard compound behind it.

Mr. Tapson had long maintained that Ms. Garrido did not rape Ms. Dugard but that she was aware that the sexual abuse was going on, saying that both she and Mr. Garrido had become addicted to methamphetamine, and that the drug had fueled their actions. But Ms. Garrido pleaded guilty to both kidnapping and forcible rape.

Mr. Garrido was sentenced on a larger array of crimes, which Judge Phimister outlined in exhaustive fashion on Thursday, adding that he believed that Mr. Garrido had tried to hide his crimes and play up any mental illness to avoid punishment.

Ms. Dugard, who plans to publish a memoir next month about her experience, now lives with her two children in a secret location. In July 2010, the State of California settled a claim with her and her children that state parole agents had not adequately monitored Mr. Garrido.

Susan Gellman, a lawyer for Mr. Garrido, said in court that he was also remorseful, and that he agreed with the scathing depiction of his life of depravity, violence and crime. But, Ms. Gellman said that Mr. Garrido was suffering “mental health issues,” including a desire to “tell his story,” something he gave up by pleading guilty.

In his final statement, Judge Phimister said Mr. Garrido would not feel the same desire while incarcerated, suggesting that other prisoners would not want to hear “what a wonderful story this was.”

“What you did to this child is beyond horrible,” the judge said. “May you think long and hard about what you did.”

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The Bay Citizen: In Bay Area, Youngsters Are More Prone to Bicycle Accidents

“Now, I would love to get up every couple of minutes to get him,” said his father, Kurt Sorensen, a Southwest Airlines employee.

Brandon was riding his bicycle through an Alameda intersection on a rainy Monday afternoon last month when he was struck by an S.U.V. By chance, his mother, Tammy, came upon him lying in the street as she drove past. She held her son one last time; he died at a nearby hospital.

A Bay Citizen analysis of bicycle accident data from the California Highway Patrol found that young cyclists like Brandon are at the highest risk. The analysis shows that in the Bay Area cyclists ages 10 to 19 were involved in more traffic collisions — more than 3,200 from 2005 to 2009 — than any other age group.

Nearly half of those accidents involved boys ages 12 to 16.

In a region filled with thousands of adult cyclists, including daredevils who barrel through congested cities at high speeds, data showing that youngsters are most prone to accidents surprised even bicycle advocates. They said it showed the need for early education about traffic laws and safety.

The highway patrol compiles information about bicycle accidents from local police reports. According to the data, San Jose had 434 collisions involving teenagers, the most of any Bay Area city. Oakland was second with 193. (The Bay Citizen’s Bike Accident Tracker is at baycitizen.org/data/bike-accidents/.)

“I would have thought it would be males in their 20s” who would have the highest accident rates, said Renee Rivera, head of the East Bay Bike Coalition. “Anecdotally, I see mostly young adults cycling.”

In fact, cyclists in their 20s had the second-most collisions with motorists — about 3,100 from 2005 to 2009.

The data showed that teenagers were judged by the police to be at fault 63 percent of the time. By contrast, cyclists in their 20s were faulted in 46 percent of accidents.

The police are still investigating Brandon Sorensen’s accident, and the cause is unknown. The driver is cooperating, and no charges have been filed, according to the Alameda Police Department.

The police and experts in bicycle safety said adolescents, as inexperienced riders, often put themselves in danger because they are unfamiliar with traffic laws. The California Vehicle Code requires cyclists to ride on the right side of the road and follow all traffic rules, including stop signs, traffic lights and signaling.

“Bicyclists don’t think they’re vehicles on the roadway,” Sgt. Steve Paich of the Oakland Police said. “They feel like they should be treated like pedestrians.”

Sergeant Paich said many teenagers think it is legal to ride their bicycles in the crosswalk, for example. “Riding in the crosswalk,” he said, “means you’re riding on the wrong side of the road,” which is the ticketing category for riding in a crosswalk.

Adolescent cyclists were cited for being on the wrong side of the road two and a half times more than for any other individual violation, the data showed. Adolescents were found to be on the wrong side of the road more than any other riders.

A sampling of police reports shows how youngsters’ ignoring traffic laws can put them in harm’s way.

In one accident, a woman was driving along Eighth Avenue in Oakland when a 15-year-old cyclist ran a stop sign and entered the intersection. Trying to avoid him, the driver lurched onto the sidewalk, but the cyclist was thrown onto the hood of the car before rolling off into the street.

The teenager was lucky. He escaped with a few stitches on his head and some scrapes on his leg. His name and the driver’s were redacted from the police report.

In another instance, a 12-year-old boy ran a red light at the intersection of Hegenberger Road and Edgewater Drive in Oakland and was struck by a car. The driver was accelerating after the light turned green, according to the police report. The boy was not injured, but was cited for not having brakes or wearing a helmet.

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