Senator slams Fitch US downgrade as 'historic failure of leadership'
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This comes as rating agency Fitch Ratings announced that it downgraded the credit rating of the US from AAA to AA.
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This photo shows signage for Fitch Ratings, Sunday, Oct. 9, 2011, in New York. (AP)
US Senator Joe Manchin on Thursday described the downgrade of the US credit rating by Fitch Ratings as a "historic failure" of leadership, highlighting the fact that all the reasons cited by the agency for the downgrade "are a stark warning" and "cannot be ignored."
"The downgrading of America’s credit rating by Fitch represents a historic failure of leadership by both political parties and the Executive branch," Manchin said in a statement, noting that the agency specifically cited the decline in governance, erosion of cooperation in the federal government, and ballooning national debt as reasons for its decision to downgrade the US credit rating.
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Senator Joe Manchin releases statement on Fitch Ratings' decision to downgrade the U.S. credit rating from AAA to AA+, saying, "[it] represents a historic failure of leadership by both political parties and the Executive branch." pic.twitter.com/4R7CFYNpcu
Yesterday, rating agency Fitch Ratings announced that it downgraded the credit rating of the US from AAA to AA.
The reason, the agency said, is owed to fiscal deterioration over the next three years.
It also cited governance "erosion" that saw the political standoff over the debt ceiling a few months ago.
Manchin warned that unless action is taken to fund the government and address the national debt, the US may lose its superpower status and the confidence of its allies.
September, he predicts, will be a crucial month for solving the issue as the deadline to fund the federal government is approaching.
He further called on lawmakers to take the necessary steps to restore the US credit rating.
Read more: Ex-CIA advisor predicts date when US dollar hegemony will collapse
In May, Fitch had placed the country's credit on "rating watch negative," reflecting increased political partisanship that hampered a resolution to raise or suspend the debt limit ahead of a looming deadline.
Fitch placed the US on "rating watch negative" last May when the country was witnessing a partisan political crisis over the debt ceiling.
Despite reaching an agreement to suspend the borrowing limit for the next two years, the agency maintained its outlook.
"In Fitch's view, there has been a steady deterioration in governance standards over the last 20 years, including on fiscal and debt matters," the agency said Tuesday.
"The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management."
The rating institution added that the United States government "lacks a medium-term fiscal framework" and has seen only "limited progress" in addressing challenges, including rising social security and Medicare costs.
