Moody’s strips U.S. government of top credit rating, citing Washington’s failure to rein in debt

By PAUL WISEMAN Associated Press WASHINGTON AP Moody s Ratings stripped the U S administration of its top credit rating Friday citing successive governments failure to stop a rising tide of debt Moody s lowered the rating from a gold-standard Aaa to Aa but noted the United States retains exceptional credit strengths such as the size resilience and dynamism of its financial system and the role of the U S dollar as global reserve currency Moody s is the last of the three major rating agencies to lower the federal authorities s credit Standard Poor s downgraded federal debt in and Fitch Ratings followed in In a report Moody s noted We expect federal deficits to widen reaching nearly of the U S financial system by up from in driven mainly by increased interest payments on debt rising entitlement spending and relatively low revenue generation Extending President Donald Trump s tax cuts a priority of the Republican-controlled Congress Moody s noted would add trillion over the next decade to the federal primary deficit which does not include interest payments A gridlocked political system has been unable to tackle America s huge deficits Republicans reject tax increases and Democrats are reluctant to cut spending On Friday House Republicans failed to push a big package of tax breaks and spending cuts through the Budget Committee A small group of hard-right Republican lawmakers insisting on steeper cuts to Medicaid and President Joe Biden s green ability tax breaks joined all Democrats in opposing it