Debt Limit: ‘Weak Deal Would Risk U.S. Rating’

Debt Limit: ‘Weak Deal Would Risk U.S. Rating’

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As President Obama ‘Digs In Heels’ Against A Plan To Reduce The Deficit, A Key Ratings Agency Warns Of Another ‘Downgrade’ Without One

Downgrade Threat: In The Absence Of Deficit Reduction Plan

FITCH RATINGS: “In the absence of an agreed and credible medium-term deficit reduction plan that would be consistent with sustaining the economic recovery and restoring confidence in the long-run sustainability of U.S. public finances, the current Negative Outlook on the ‘AAA’ rating is likely to be resolved with a downgrade later this year even if another debt ceiling crisis is averted.” (“Fitch: Debt Ceiling Delay Would Prompt Formal U.S. Rating Review,” Fitch Ratings, 1/15/13)

WH Won’t Even Negotiate: ‘Obama Escalates Debt Fight,’ ‘Will Not Engage’

PRESIDENT OBAMA: “What I will not do is to have that negotiation… That is not how historically this has been done.” (President Obama, Press Conference, 1/15/13)

HISTORY: ‘Congress Has Always Placed Restrictions On Federal Debt’

CONGRESSIONAL RESEARCH SERVICE: “Congress has always placed restrictions on federal debt. Limitations on federal debt have helped Congress assert its constitutional powers of the purse, of taxation, and the initiation of war.” (“The Debt Limit: History And Recent Increases,” Congressional Research Service, P.7, 1/10/13)

43 U.S. SENATORS: “The 1985 Gramm-Rudman-Hollings Act, which helped reduce the deficit, was attached to a debt limit bill. The three largest deficit reductions bills in the 1990s – in 1990, 1993, and 1997 – were each linked to debt limit legislation, as was the Statutory Pay-As-You-Go Act of 2010. Finally, the debt limit was the impetus for the 2011 Budget Control Act, estimated to save $2.1 trillion over the decade. In short, nearly every significant deficit reduction law of the past 27 years has been linked to a debt limit debate.” (Sen. Portman, Letter To President Obama, 12/5/12)