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Moody's changes U.S. credit worthiness rating to negative as shutdown looms

The White House on Friday blamed the credit-rating news on Republicans. "Moody's decision to change the U.S. outlook is yet another consequence of Congressional Republican extremism and dysfunction," Biden administration press secretary Karine Jean-Pierre said.

File Photo by Anna Rose Layden/UPI
The White House on Friday blamed the credit-rating news on Republicans. "Moody's decision to change the U.S. outlook is yet another consequence of Congressional Republican extremism and dysfunction," Biden administration press secretary Karine Jean-Pierre said. File Photo by Anna Rose Layden/UPI

Nov. 10 (UPI) -- Moody's Investors Service lowered its outlook of the nation's debt from stable to negative on Friday, saying the risks to the country's fiscal strength have increased with higher interest rates and rising debt costs.

While the United States still maintains its AAA rating, the country is one step closer to losing its perfect credit rating. The change comes as the Congress faces another deadline next week to fund the government and prevent a shutdown.

"In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues, Moody's expects that the [U.S.] fiscal deficits will remain very large, significantly weakening debt affordability," the agency said.

"Continued political polarization within U.S. Congress raises the risk that successive governments will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability," it added.

The White House blamed the change on the GOP.

Government shutdowns and threats of shutdowns long have played a role in U.S. credit rating concerns (such as in 2019, pictured). File Photo by Kevin Dietsch/UPI
Government shutdowns and threats of shutdowns long have played a role in U.S. credit rating concerns (such as in 2019, pictured). File Photo by Kevin Dietsch/UPI

"Moody's decision to change the U.S. outlook is yet another consequence of Congressional Republican extremism and dysfunction," press secretary Karine Jean-Pierre said.

In the past few months, Fitch Ratings and S&P Global -- the two other major ratings agencies -- downgraded U.S. creditworthiness in the wake of threatened government shutdowns.