House Speaker John Boehner (R-Ohio) said Thursday that a new report by the Moody’s credit rating agency backs up House Republicans’ position that any deficit-reduction package negotiated by the White House and congressional leaders must include significant spending cuts.
Moody’s warned Thursday that it is considering downgrading the United States’ AAA credit rating as the odds increase that the government will default on its debt, The Washington Post’s Zachary Goldfarb reported. The agency said that even if Congress agrees to raise the $14.3 trillion debt ceiling, the country could face a downgrade if lawmakers don’t include a comprehensive package that meaningfully reduces the annual budget deficit.
“This report reinforces the point Republicans have been making all year: An increase in the debt limit without major spending cuts will hurt our economy and destroy jobs,” Boehner (R-Ohio) said in a statement. He said the report “makes clear that if we let this opportunity pass without real deficit reduction, America’s financial standing will be at risk. A credible agreement means the spending cuts must exceed the debt limit increase.”
Congressional Democrats did not immediately respond to the Moody’s report.
Treasury Secretary Timothy F. Geithner has said that if Congress does not vote to raise the debt limit by Aug. 2, the government will begin defaulting on its obligations.
Moody’s released the report shortly before Geithner was to visit Capitol Hill for a closed-door briefing with House freshmen. The debt ceiling debate and the August deadline for avoiding default were expected to be the main focus.