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WASHINGTON (AP) — Moody’s Ratings stripped the U.S. government of its
top credit rating Friday, citing successive governments’ failure to stop
a rising tide of debt.
Moody’s lowered the rating from a gold-standard Aaa to Aa1 but said the United States “retains exceptional credit strengths such as the size, resilience and dynamism of its economy and the role of the U.S. dollar
as global reserve currency.’'
Moody’s is the last of the three major rating agencies to lower the
federal government’s credit. Standard & Poor’s downgraded federal debt
in 2011 and Fitch Ratings followed in 2023.
In a statement, Moody’s said: “We expect federal deficits to widen, reaching nearly 9% of (the U.S. economy) by 2035, up from 6.4% in 2024,
driven mainly by increased interest payments on debt, rising entitlement spending, and relatively low revenue generation.’'
Extending President Donald Trump’s 2017 tax cuts, a priority of the Republican-controlled Congress, Moody’s said, would add $4 trillion over
the next decade to the federal primary deficit (which does not include
interest payments).
A gridlocked political system has been unable to tackle America’s huge deficits. Republicans reject tax increases, and Democrats are reluctant
to cut spending.
On Friday, House Republicans failed to push a big package of tax breaks
and spending cuts through the Budget Committee. A small group of
hard-right Republican lawmakers, insisting on steeper cuts to Medicaid
and President Joe Biden’s green energy tax breaks, joined all Democrats
in opposing it.
https://apnews.com/article/moodys-debt-government-us-rating-credit-e2c803 cade9b1552b68c7e722eac3b78
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Date: Sat, 17 May 2025 09:30:15 +0000
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