Former Gov. Tim Kaine, who is running for U.S. Senate next year, said he was “deeply disappointed” that Moody’s may downgrade the state’s AAA bond rating after failed deficit talks in Washington.
“It’s deeply disappointing to see that partisan posturing in Washington is now jeopardizing not only our nation’s good standing, but also Virginia’s,’’ Kaine (D) said. “A downgrade in our credit rating would have lasting financial implications by forcing the commonwealth to pay higher interest rates for years to come.”
If the federal debt limit is not raised by Aug. 2, the U.S. government would not have enough money to pay all its obligations and, as a result, payments to federal employees, retirees, service members and retirees could be pared back.
“I urge all those who seek to serve Virginia in the United States Senate to join me in demanding that Washington set aside political gamesmanship and vote to protect the U.S.’s credit rating by raising the debt ceiling and fulfilling our obligations without further delay,” Kaine said.
Moody’s informed five AAA states — Virginia, Maryland, New Mexico, South Carolina and Tennessee — that they could be downgrounded Tuesday.
Sen. Mark Warner (D-Va.), who has been working on a deficit-reduction plan praised by President Obama, told reporters on a conference call Tuesday that the consequences of inaction were far-reaching.
“This shows to me the domino effect that starts to take place if we start to mess with the credit rating of the United States,” Warner said.