White House press secretary Karine Jean-Pierre said Tuesday that a credit agency’s decision to downgrade the United States’ credit rating “defies reality.”
Fitch Ratings downgraded the United States from AAA to AA+ Tuesday, citing a history of debt-limit standoffs over the last 20 years. Fitch also cited the growth of the national debt in its release announcing the downgrade, but noted the United States of America retains a AAA rating as a country. (RELATED: ‘Hard Truths’: Nikki Haley Slams Republicans For Role In Economic Decline)
WASHINGTON, DC – JULY 28: U.S. President Joe Biden gestures toward visitors watching the departure as he walks to Marine One on the South Lawn of the White House July 28, 2023 in Washington, DC. President Biden is traveling to Auburn, Maine to discuss manufacturing and his “Bidenomics” economic plan. (Photo by Drew Angerer/Getty Images)
“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,” Jean-Pierre said in a statement.
“Cuts to non-defense discretionary spending (15% of total federal spending) as agreed in the Fiscal Responsibility Act offer only a modest improvement to the medium-term fiscal outlook, with cumulative savings of USD1.5 trillion (3.9% of GDP) by 2033 according to the Congressional Budget Office,” Fitch said in the release.
The Republican-controlled House of Representatives passed the Fiscal Responsibility Act by May 31 in a 314-117 vote, which followed tense negotiations between House Speaker Kevin McCarthy and President Joe Biden that brought the U.S. within days of its projected default date. The law freezes discretionary spending on non-defense budgetary items at fiscal year 2022 levels, adds reforms to permitting for energy projects and places new work requirements for some welfare programs.
Some conservatives, like Republican Gov. Ron DeSantis of Florida, criticized the deal for failing to secure enough spending cuts, while others, like former Trump administration official Larry Kudlow, praised the deal as a win.
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