Joseph Biden current president of the United States. - Photo via VOA -
Published on Thursday, May 25, 2023
By the A.M. Costa Rica wire services
Fitch Ratings has put the U.S. credit rating at risk of a downgrade because of the potential that the U.S. government will not be able to come to an agreement to raise its debt limit and be able to pay its bills, reported Voice of America Journal (VOA).
Fitch said Wednesday it “still expects a resolution” but that there is an increased risk the debt limit will not be raised in time.
U.S. Treasury Secretary Janet Yellen has said the government could run out of money to meet its obligations, such as interest on government bonds, salaries for federal workers and government contractors and stipends to pensioners, as early as June 1.
A Treasury Department statement late Wednesday said the Fitch warning “underscores the need for swift bipartisan action by Congress to raise or suspend the debt limit and avoid a manufactured crisis for our economy.”
A White House statement said the move by Fitch “reinforces the need for Congress to quickly pass a reasonable, bipartisan agreement to prevent default.”
White House budget officials and House Republican negotiators have been meeting this week as they try to resolve the impasse. Discussions have involved both increasing the debt limit and trimming future federal spending.
Republican House Speaker Kevin McCarthy told reporters Wednesday that the negotiations were still productive, but days of talks have yet to produce an agreement that both sides believe could win a majority vote in both houses of Congress.
“I firmly believe we will solve this problem,” McCarthy said. “We’re not going to default.”
It remained unclear, however, exactly how President Joe Biden and Democrats pushing for only relatively modest cuts in government spending and Republicans pushing for steeper ones could get to an agreement, and to what extent the debt ceiling would be increased beyond its current $31.4 trillion level.
“I will not
raise taxes,” McCarthy said, rejecting a
White House proposal to increase taxes
on the wealthiest U.S. taxpayers and
large corporations. Nor, he said, would
he allow a House vote on a measure to
raise the debt ceiling without
accompanying it with spending cuts.
Professional's services and business
U.S. Income Tax & Accounting