US risks losing triple-A sovereign credit rating over shutdown, Fitch warns
The ongoing government shutdown in the United States could soon start to negatively impact the country’s debt ceiling, ratings agency Fitch said. The US runs a record deficit and pushes overall borrowing past $22 trillion.
A shutdown of about a quarter of the US government entered its 19th day on Wednesday, with lawmakers and the White House divided over President Donald Trump’s demand for $5.7 billion in funds to build a wall along the US border with Mexico.Also on rt.com As US debt spirals to $22 trillion, former Fed chair Janet Yellen is suddenly concerned
“If this shutdown continues to March 1 and the debt ceiling becomes a problem several months later, we may need to start thinking about the policy framework, the inability to pass a budget... and whether all of that is consistent with triple-A,” Fitch’s global head of sovereign ratings, James McCormack, told Reuters.
He added that “From a rating point of view it is the debt ceiling that is problematic.”
READ MORE: US kleptocrats & multinationals rip off taxpayers by parking billions offshore – economist to RT
Another global credit ratings agency from the ‘Big Three’, Standard & Poor’s, cut the US federal government’s triple-A credit rating for the first time ever during a similar budget and debt ceiling spat in 2011.
“I think people are looking at the CBO (Congressional Budget Office) numbers. If people take the time to look at that you can see debt levels moving higher, you can see the interest burden in the US government moving decidedly higher over the next decade,” McCormack said in an interview with CNBC.Also on rt.com National emergency coming? Trump announces border trip amid talk of using authority to build wall
“There needs to be some kind of fiscal adjustment to offset that or the deficit itself moves higher and you’re essentially borrowing money to pay interest on the debt. So there is a meaningful fiscal deterioration there, going on the United States.”
The US debt ceiling is set to be reinstated on March 2 at a record high of $22 trillion. It is only slightly higher than the current actual debt of some $21 trillion. Democrat lawmakers in Congress are hoping to pass the ‘Gephardt Rule’, which would allow the House to suspend it in parallel with the passage of a budget spending bill.
However, Republicans in the Senate are unlikely to agree to such a measure, setting up the prospect of the US Treasury being unable to make debt payments to domestic and foreign creditors in the event of an extended government shutdown.
For more stories on economy & finance visit RT's business section