Throughout negotiations over whether to raise the debt ceiling, Republicans have maintained that it would be worse to raise the limit without significant spending cuts than to not raise the limit and risk the country’s first-ever default. This is, of course, not true.
Sen. Roy Blunt (R-MO) made the rounds of local media outlets today to push the GOP message, but ran into some trouble with the facts when he claimed that credit rating agencies like Standard & Poor agree with Republicans during a radio interview with KTRS in St. Louis:
BLUNT: If you read any of the rating agencies — Standard & Poor and the other agencies — they don’t say we’re in trouble because of the debt ceiling or that we might default, they say we’re in trouble and we could be downgraded as an economy to invest in, in our bonds and everything, because we’re spending way too much money relative to our abilities to produce goods and resources.
In fact, the exact opposite is true:
Standard & Poor’s would cut the U.S. credit rating to its lowest level and Moody’s Investors Service said it will probably reduce its ranking if the government fails to increase the debt limit, leading to a default.
S&P would lower its sovereign top-level AAA ranking to D, the last rung on its scale if the U.S. can’t pay its debt, John Chambers, chairman of the company’s sovereign rating committee, said today. Moody’s said it would probably assign a position in the Aa range, or within three steps of its highest level.
An executive for the third major rating agency, Fitch, told Rueters, “If we reach the second of August without a lifting of the debt ceiling, Fitch would assign a rating watch negative to the U.S. sovereign ratings.”
When facts get in the way of the narrative, Blunt just changes the facts. Meanwhile, several Republican lawmakers, including House Budget Committee Chairman Paul Ryan (R-WI), have suggested that default would actually be good for the U.S., despite the credit rating agencies’ dire warnings.