Another Perspective on the Sequester
The President has been treating the cuts from the sequester as some sort of budget Armageddon; blaming Republicans and talking up how much they’ll hurt. Here’s another perspective on these cuts from people who look more closely at our financial situation.
Credit rating agencies are shrugging off sequestration, saying the U.S. government will need to do more to reduce the deficit if it wants to prevent a downgrade of the nation’s credit rating.
While the agencies say the $85 billion in automatic spending cuts represent at least a step towards deficit reduction, they argue much more is needed to prevent the United States from losing its “AAA” rating.
“It’s not the most ideal outcome,” said David Riley, Fitch Rating’s global managing director for sovereign ratings, on CNBC Europe. “You’d rather have intelligent cuts and some revenue measures as well … but we don’t live in an ideal world, and it’s better to have some deficit reduction than none at all.”
The agencies view it as a positive sign that Congress did not simply scrap the unpopular sequester. Erasing the cuts without coming up with an alternative, something pushed by some liberal lawmakers, would have added to the deficit and debt and further pressured agencies to downgrade the nation’s credit rating.
They are glad Congress didn’t scrap it, but the year’s still young. In any event, when you hear Democrats freak out about these cuts, just remember that the credit agencies are yawning.
Like this post? Subscribe to my RSS feed and get loads more!