US House Republicans eye plan to avert government shutdown as Moody's warns
By David Morgan
WASHINGTON (Reuters) -U.S. House of Representatives Republicans are due to unveil a stopgap measure on Saturday aimed at averting a government shutdown, the latest in a series of standoffs that contributed to Moody's (NYSE:MCO) lowering its outlook on the nation's credit.
The move to change its outlook to «negative» from «stable» by the last major credit ratings agency to maintain a top «AAA» rating on the U.S. government came six months after Congress brought the nation to the brink of default on $31.4 trillion in debt, and just a week before federal agencies will run out of money without congressional action.
Newly installed House Speaker Mike Johnson, the top Republican in Congress, has spent the past several days discussing options with his slim 221-212 House majority, including how long to extend stopgap funding while lawmakers negotiate spending legislation for the 2024 fiscal year that runs through Sept. 30.
«Continued political polarization within US Congress raises the risk that successive governments will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability,» Moody's said in a statement.
The move's immediate effect was renewed finger-pointing between President Joe Biden's White House and Republicans, as each sought to blame the other.
«Moody's decision to change the U.S. outlook is yet another consequence of congressional Republican extremism and dysfunction,» White House spokesperson Karine Jean-Pierre said.
Johnson cited the outlook change as «the latest example of the failure of President Biden and Democrats' reckless spending agenda.» In a statement, he vowed to «fight to get our finances in order.»
Moody's announced its decision after the federal
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