Obama budget failed to meet expectations: The Wall Street Journal op-ed page is dubbing yesterday’s S&P outlook change on U.S. Treasury Securities “The Obama Speech Downgrade” and a quick look at the S&P statement, as well as the follow up conference call, seems to back them up. Specifically the S&P statement looked at the Ryan plan and Obama’s subsequent campaign speech and continued: “we see the path to agreement as challenging because the gap between the parties remains wide. We believe there is a significant risk that Congressional negotiations could result in no agreement on a medium-term fiscal strategy until after the fall 2012 Congressional and Presidential elections.” Later on a conference call with reporters analyst John Chambers said that while S&P had been encouraged by the Simpson Bowles plan in December, when Obama declined to embrace those recommendations and put out his own plan, it was “below our expectations.”

Debt ceiling impact: The S&P statement did not mention the debt ceiling fight at all but that didn’t stop Democrats and Republicans from using it to make their cases. Democrats claimed the outlook change sh0wed why a clean debt limit vote was needed. Republicans claimed it showed why real spending cuts are needed to prove to creditors that Congress is serious about deficit reduction. But while the Dow was down 1.14 percent yesterday, and gold did surge, U.S. Treasury security prices actually finished higher on the day.