Friday’s announcement by Moody’s and the House Budget Committee vote could have been a turning point.
by Eric Boehm
Reason.com
In a world where federal policymakers were treating America’s national debt with the seriousness it deserves, Friday might have been a crucial turning point in Washington.
First, the House Budget Committee voted down President Donald Trump’s tax proposal when four Republican members of the committee broke ranks over concerns about how the bill is projected to increase the budget deficit and the debt. “This bill falls profoundly short,” said Rep. Chip Roy (R–Texas), one of those four GOP members, during the committee’s debate on the bill. “It does not do what we say it does with respect to deficits.”
Hours later, Moody’s Ratings seemingly agreed with those objections when the credit rating agency downgraded the federal government’s debt—a signal to investors that buying Treasury bonds is a riskier bet than it used to be. In a statement, Moody’s said that the downgrade reflected the fact that Congress and the president “have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs,” and noted that “current fiscal proposals under consideration” would not do anything to reduce spending and deficits.