Joe Manchin calls US credit downgrade ‘a stark warning’ as spending fight looms
Sen. Joe Manchin savaged both political parties Thursday, blaming Republicans and Democrats alike for financial splurging that paved the way for this week’s US credit downgrade by Fitch Ratings.
“The downgrading of America’s credit rating by Fitch represents a historic failure of leadership by both political parties and the Executive branch,” Manchin (D-WV) said in a statement.
“This is a stark warning that cannot be ignored. We must act now to fully fund the government and address our national debt before we wake up to a future where America’s superpower status is in jeopardy and we have lost the confidence of our allies around the world.”
On Tuesday, Fitch announced it had bumped down the US’ long-term foreign currency issuer default rating from its highest mark of AAA to AA+, which is still considered excellent credit.
Fitch cited the “steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025.”
Manchin, a centrist Democrat who has often been a linchpin vote in his party’s Senate caucus, warned that Congress faces “a crucial month” as it returns from its August recess with a Sept. 30 deadline to avoid a partial government shutdown.
“Now, more than ever, it is time for elected leaders from both parties to work together and send a clear message to the world that we will take the necessary fiscal and budgetary steps to restore our credit rating and keep America’s economy strong for this generation and the next.”
A who’s who of financial titans, including Berkshire Hathaway chairman and CEO Warren Buffett, JP Morgan Chase CEO Jamie Dimon, and former Treasury Secretary Larry Summers, ripped the Fitch downgrade and stressed that it ultimately won’t likely have much of an impact on the US economy.
The downgrade was reminiscent of Standard & Poor’s 2011 US credit demotion from AAA to AA+ shortly after the Obama-era debt ceiling flap.
On Thursday morning, Manchin recalled a recent phone call he had with Fitch CEO Paul Taylor.
“He said, ‘Listen, it’s been 12 years since Standard & Poor’s downgrade … nothing’s gonna happen,'” the senator recounted on CNBC’s “Squawk Box.”
Back in June, Congress raised the nation’s borrowing limit days before the so-called “X” date, at which point the government would have been at risk of lacking the cash needed to fulfill all its obligations.
“The only thing that’s keeping us working in a bipartisan way is if we can spend more money,” Manchin lamented.
Manchin, 75, has been coy about whether he intends on running for re-election in 2024, even keeping a presidential bid on the table.
He is a rare Democrat who hails from a ruby-red state. Former President Donald Trump won West Virginia by nearly 40 percentage points in 2020.
