Rep. Tim Huelskamp and others on Capital Hill Monday said the possibility of credit agencies downgrading of the U.S.’s long-term credit rating is a “wak-up call” for a nation that is facing record-breaking debt levels.
This should be a major wake-up call that Washington cannot maintain business-as-usual and that puts Washington leaders on notice that it is time to end the overspending” Congressman Huelskamp said. “In a few weeks, Congress will be asked to consider raising the debt ceiling for the 11th time this decade.  Without any clear plan to reverse the trend of adding to, instead of erasing, the country’s red ink, it is difficult to conceive how we can even begin to consider increasing the limit on the country’s credit card.  The only way I can endorse another increase is if it is alongside a balanced budget amendment -- a serious and constitutional commitment to ending overspending.”
On Monday, Standard & Poor’s lowered its long-term outlook for the nation’s fiscal year from “stable” to “negative” and warned that it and other credit agencies could consider lowering its rating from AAA in the next two years if Washington fails to reduce the country’s debt load.
A loss of a AAA rating would have serious implications on the country’s economy, making it more difficult and expensive to obtain loans.
After battling until the 11th hour to finalize a budget for the current fiscal year, law makers now face an even tougher battle of writing the fiscal year 2012 budget and dealing with the debt load that is nearly a record $1.5 trillion. This is the third consecutive year the deficit has exceeded $1 trilion.
Standard & Poor’s said in its report that is sees little chance of the White House and Congress agreeing on a deficit-reduction plan before the November 2012 election.
Huelskamp, who has voted against recent continuing resolutions in favor of more permenant spending solutions, said the country needs to substantially decrease is borrowing and get its spending back on track.
“The culture of overspending in Washington has made America a risky bet for lenders. The S&P evaluation affirms what many other conservatives and I have been saying for years: the nation’s debt and deficits pose a serious threat to America’s economic security.  Fortunately, Washington has an option to put an end to this problem: stop the overspending and stop the borrowing.”