WASHINGTON — The White House and Biden campaign are pointing fingers at the GOP over Tuesday’s Fitch credit downgrade, the first time in over a decade that the U.S. has faced a downgrade.
Fitch Ratings Agency downgraded the U.S. debt rating from AAA to AA+ after a congressional standoff earlier this year threatened a debt default. Fitch also pointed to Jan. 6 as a reason for the downgrade, a White House official said.
In a statement, press secretary Karine Jean-Pierre said the White House “strongly” disagreed with the decision, saying that it “defies reality to downgrade the United States at a moment when President Biden has delivered the strongest recovery of any major economy in the world.”
“And it’s clear that extremism by Republican officials — from cheerleading default, to undermining governance and democracy, to seeking to extend deficit-busting tax giveaways for the wealthy and corporations — is a continued threat to our economy,” Jean-Pierre said.
Reached for comment, the White House also pointed to NBC to tweets from economic experts expressing criticism of the decision to downgrade.
Lawrence Summers, who served as Treasury Secretary in the Clinton administration, called the decision to downgrade “bizarre and inept,” while Jason Furman, former economic adviser to Barack Obama, denounced the move as “completely absurd.”
Treasury Secretary Janet Yellen said in a statement that the change was “arbitrary and based on outdated data.”
The Biden 2024 campaign took aim directly at former president Donald Trump, referring to the downgrade in a statement as a “Trump downgrade” twice.
“This Trump downgrade is a direct result of an extreme MAGA Republican agenda defined by chaos, callousness, and recklessness that Americans continue to reject,” Kevin Munoz, a spokesperson for the Biden campaign, said in a statement. “Donald Trump oversaw the loss of millions of American jobs, and ballooned the deficit with the disastrous tax cuts for the wealthy and big corporations.”
Munoz also noted that Trump had urged Republicans to let the U.S. default on its debt amid an impasse with Democrats earlier this year over spending cuts.
“I say to the Republicans out there — congressmen, senators — if they don’t give you massive cuts, you’re going to have to do a default,” Trump said in May. “And I don’t believe they’re going to do a default because I think the Democrats will absolutely cave, will absolutely cave because you don’t want to have that happen.”
The downgrade comes at a time when Biden and senior administration officials have traveled across the country to tout “Bidenomics,” the term adopted by the administration to refer to the president’s economic agenda.
Biden plans to travel to Arizona, New Mexico and Utah next week to highlight the impact of the Inflation Reduction Act, a signature part of his economic agenda, according to an administration official.
The last time the U.S.’s credit was downgraded was in 2011, when Standard and Poor’s lowered the AAA rating to AA+. That move came shortly after Congress resolved a debt-ceiling standoff.
This time, the downgrade comes about two months after Congress passed a debt ceiling agreement.
Shortly after the agreement, Fitch said it was keeping the U.S. AAA rating on negative watch “as we consider the full implications of the most recent brinkmanship episode and the outlook for medium-term fiscal and debt trajectories.”
Tuesday’s announcement reflected the aftermath of those considerations, with Fitch saying that “repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management.”
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