Cozen lawyers discuss S&P downgrade

Say what you will about the messy debate over raising the debt limit, concluded last Friday, but the down to the wire negotiations signaled some hard new realities

The culture is changing from one that favored spending to one where the bias is toward cutting costs.

The clients of lobbyists and law firms, just like everyone else, can't seem to get enough information about the S&P downgrade and what that likely means for not only the budget debate but the economy.

Three lawyers in the Washington office of Cozen O'Connor gave their assessments of the still evolving budget debate in a conference call earlier today with clients. Howard Schweitzer, a former Treasury official, Mark Alderman, the head of Cozen's public affairs practice in Washington, and Robert Freeman a former senior staffer with the Senate Committee on Commerce, Science & Technology, generally had a favorable take on the negotiations.

That is because the final result was a commitment to start to rein in federal spending. Both Schweitzer and Freeman voiced skepticism about the downgrade, and suggested that the S&P is attempting to "claw back" credibility it lost when it, along with other rating agencies, failed to flag the Lehman collapse or to give a heads up on the toxic securitized mortgage portfolios that later created havoc in financial markets.

Law firms are looking for ways to set themselves apart from competitors and offering actionable intelligence to clients is deemed to be a way to do that. Yet the budget debate in Washington remains such a muddle that creating clarity might be too much to ask. Alderman said as much toward the end of the conference call when he noted that the tug of war between fiscal conservatives who believe that Washington is wrecking the economy by spending beyond its means, and liberals who are urging even more stimulus. will continue through the 2012 elections.

Yet it does appear as if the bias has shifted. There does now appear to be consensus that Washington's pockets, while deep, are not limitless.