Biden officials protest ‘bizarre’ Fitch downgrade, cite Trump-era woes
- Fitch dropped the rating to AA+, citing an expected fiscal deterioration over the next three years as well as a high and growing government debt burden
- US Treasury Secretary Janet Yellen said she disagreed with the downgrade, calling it ‘arbitrary and based on outdated data’
Biden administration officials complained on Tuesday about ratings agency Fitch’s downgrade of the top US government credit rating, saying the group used flawed methodology and ignored a resilient economy.
Leading the charge was US Treasury Secretary Janet Yellen, who said she disagreed with Fitch’s downgrade to AA+ from AAA, in a statement that called it “arbitrary and based on outdated data”.
Fitch’s report cited “a steady deterioration in standards of governance over the last 20 years” and said “repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management”.
The move comes two months after a bruising partisan fight over the federal debt ceiling, which was ultimately raised. It echoes a US downgrade in 2011 by rival ratings agency Standard and Poor’s, days after a similar debt ceiling fight also threatened a US default.
Biden administration officials told reporters governance issues cited by Fitch occurred during the administration of then-President Donald Trump, Joe Biden’s predecessor. Still, the agency kept the rating at AAA during those years, they said.
“This is a bizarre and baseless decision for Fitch to make now,” a senior Biden administration official said, adding that US governance, by Fitch’s measures, had improved during the Biden presidency.
