Fitch downgraded the U.S. from a rating of “AAA” to “AA+” after several years of high-risk partisan battles over the debt limit.
Those battles, Fitch said, have led to a spiraling national debt and a lack of faith in the U.S. government to handle it.
“There has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters,” Fitch wrote in the Tuesday release.
“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management.”
Fitch’s downgrade comes roughly three months after President Biden signed a deal to raise the debt limit.The agreement came just days before the U.S. was expected to default on the national debt.
Fitch warned then that the growing debt — now well over $32 trillion — and Congress’s inability to manage it in a productive and responsible way posed threats to the country’s creditworthiness.
Fitch also cited “increased political polarization and partisanship as witnessed by the contested 2020 election” in its June warning.
The downgrade came within moments of former President Trump’s indictment for his conduct on and leading up to Jan. 6, 2021.
Welcome to The Hill’s Business & Economy newsletter, we’re Aris Folley,Taylor Giorno, and Sylvan Lane — covering the intersection of Wall Street and Pennsylvania Avenue.
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