<p>One of the &#8220;Big Three&#8221; credit agencies lowered the United States&#8217;s rating by a tick on Tuesday, eliciting swift condemnation from Biden administration officials who said they &#8220;strongly disagree&#8221; with the change.</p>
<p>Fitch Ratings <a href="https://www.fitchratings.com/research/sovereigns/fitch-downgrades-united-states-long-term-ratings-to-aa-from-aaa-outlook-stable-01-08-2023">downgraded</a> the country&#8217;s Long-Term Foreign-Currency Issuer Default Rating from top-rated &#8220;AAA&#8221; to &#8220;AA+&#8221; in a move that could lead to higher interest rates and borrowing costs. It follows the federal government <a href="https://www.dailywire.com/news/biden-signs-bill-to-increase-debt-ceiling-avoid-federal-default">narrowly avoiding</a> a default on its debt earlier this summer and several weeks ahead of <a href="https://www.dailywire.com/news/gop-congressman-makes-case-for-why-we-should-not-fear-a-government-shutdown">a possible shutdown</a> if a politically-divided Congress fails to come to an agreement on spending for the next fiscal year.</p>
<p>&#8220;The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to &#8216;AA&#8217; and &#8216;AAA&#8217; rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions,&#8221; Fitch said in a <a href="https://www.fitchratings.com/research/sovereigns/fitch-downgrades-united-states-long-term-ratings-to-aa-from-aaa-outlook-stable-01-08-2023">release</a>.</p>
<p>Fitch indicated the change was a long time coming, noting &#8220;there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025.&#8221;</p>
<p>The credit agency, which had placed the U.S. government&#8217;s &#8220;AAA&#8221; rating on a <a href="https://www.fitchratings.com/research/sovereigns/fitch-places-united-states-aaa-on-rating-watch-negative-24-05-2023">&#8220;negative&#8221; watch this past May</a>, also cited other factors in announcing the change on Tuesday, including projections that show &#8220;tighter credit conditions, weakening business investment, and a slowdown in consumption will push the U.S. economy into a mild recession.&#8221;</p>
<p>Treasury Secretary Janet Yellen and the White House issued separate statements that each said they &#8220;strongly disagree&#8221; with the change. While Yellen <a href="https://home.treasury.gov/news/press-releases/jy1665">called the decision</a> &#8220;arbitrary and based on outdated data,&#8221; White House Press Secretary Karine Jean-Pierre waded into politics.</p>
<p>&#8220;The ratings model used by Fitch declined under President Trump and then improved under President Biden, and it defies reality to downgrade the United States at a moment when President Biden has delivered the strongest recovery of any major economy in the world,&#8221; Jean-Pierre said. &#8220;And it’s clear that extremism by Republican officials — from cheerleading default, to undermining governance and democracy, to seeking to extend deficit-busting tax giveaways for the wealthy and corporations — is a continued threat to our economy.&#8221;</p>
<p>It&#8217;s been more than a decade since the first and last time the U.S. faced such a downgrade. In 2011, S&amp;P bumped the U.S. long-term rating from its &#8220;AAA&#8221; perch to &#8220;AA+&#8221; — where it stands today — citing &#8220;<a href="https://www.washingtonpost.com/wp-srv/politics/documents/spratingreport_080611.pdf?itid=lk_inline_manual_3">political brinkmanship</a>&#8221; and the debt burden just days after then-President Barack Obama <a href="http://www.cnn.com/2011/POLITICS/08/02/debt.talks/index.html">signed legislation</a> to lift the debt ceiling just days before it was estimated the U.S. could have defaulted on its financial obligations.</p>
<p>After Fitch announced its downgrade on Tuesday, following years of rising U.S. government budget numbers and the debt doubling since 2011 <a href="https://www.usdebtclock.org/">to more than $32 trillion</a>, Republicans argued the change was an indicator of too much spending and borrowing.</p>
<p>&#8220;Today’s decision by Fitch Ratings to downgrade U.S. sovereign debt to ‘AA+’ is yet another sign that incessant and irresponsible borrowing to fund bigger government is not without real repercussions,&#8221; Rep. David Schweikert (R-AZ) <a href="https://twitter.com/RepDavid/status/1686519353997467648">said</a> in a post to X. &#8220;I’ve been outspoken in my belief that we need to get America’s fiscal house in order before it’s too late. Fitch’s downgrade should be seen as exactly what it is — a warning that continuing down the path of out-of-control borrowing will and does have serious consequences.&#8221;</p>

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Fitch Downgrades US Credit Rating; Biden Officials ‘Strongly Disagree’