Republican lawmakers are blaming President Biden for the decision by Fitch to downgrade the U.S. credit rating on Tuesday.
Fitch, one of the "Big Three" credit rating agencies, issued a shock decision to downgrade the country’s debt rating from the top level, AAA, to AA+. The company blamed "expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance," which it said led to "repeated debt limit standoffs and last-minute resolutions."
Biden’s GOP critics said it was Biden’s weeks-long refusal to negotiate with Republicans on the debt limit earlier this year, as well as his expensive progressive policies, that led to the downgrade.
"When Fitch specifically cited the problem of ‘last minute’ resolutions they may as well have noted Biden’s refusal to negotiate with Republicans for months, while insisting on even more wasteful spending," House Ways and Means Committee Chair Jason Smith, R-Mo., said on Tuesday.
FITCH DOWNGRADES TOP-TIER US CREDIT RATING CITING 'FISCAL DETERIORATION'
"President Biden’s brinksmanship – not to mention the $10 trillion in new spending he and Washington Democrats passed over the past two years – pushed America’s credit rating off the ledge," Smith said.
"Now families and small businesses already dealing with soaring interest rates and lost wages from Biden’s inflation crisis will also have to face the consequences of a reduced confidence in America’s sovereign debt."
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House Budget Committee Chair Jodey Arrington, R-Texas, said the downgrade was a "wake-up call" to rein in "unsustainable" spending levels.
"You can’t burn through an unprecedented $11 trillion igniting an inflationary firestorm without setting off the fiscal fire alarm," Arrington said.
"With annual deficits projected to double and interest costs expected to triple in just 10 years, our nation’s financial health is rapidly deteriorating and our debt trajectory is completely unsustainable. This is a wake-up call to get our fiscal house in order before it’s too late."
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An administration official countered these arguments by telling Fox News Digital that among the factors cited to Biden officials for the downgrade were the events of Jan. 6, 2021.
That official said Fitch repeatedly highlighted Jan. 6 as a significant concern about U.S. governance as part of the downgrade. They highlighted comments from Fitch senior director Richard Francis, who said Fitch made its decision to downgrade the U.S. credit rating due to fiscal concerns and a deterioration in U.S. governance as well as polarization, which was also reflected by the Jan. 6 insurrection.
The official also pointed out to Fox News Digital that Fitch's governance analysis shows instability spiked under former President Trump but started trending in the right direction when Biden took office.
Stocks fell on Wednesday morning as financial markets digested Fitch’s announcement.
Meanwhile, Treasury Secretary Janet Yellen made clear she did not support the agency’s downgrade. "I strongly disagree with Fitch Ratings’ decision. The change by Fitch Ratings announced today is arbitrary and based on outdated data," she said.
"President Biden and I are committed to fiscal sustainability. The most recent debt limit legislation included over $1 trillion in deficit reduction and improved our fiscal trajectory," Yellen’s statement read. "Looking forward, President Biden has put forward a budget that would reduce the deficit by $2.6 trillion over the next decade through a balanced approach that would support investments for the long-term."
