Fitch Threatens Downgrade If Debt Deal Is Too Weak

Meanwhile, Pat Toomey introduces backup bill

By Kevin Spak,  Newser Staff

Posted Jan 15, 2013 7:33 AM CST

(Newser) – The US credit rating is once again in danger thanks to a debt ceiling showdown. Fitch today announced that it may downgrade the US even if lawmakers manage to strike a deal, CNN Money reports. Fitch already has a negative outlook on the US' AAA rating, and said that would turn into a downgrade "in the absence of an agreed and credible medium-term deficit reduction plan that would be consistent with sustaining the economic recovery."

Ben Bernanke urged Congress to lift the debt ceiling yesterday, saying that refusing to do so would be like a household trying to improve its credit by defaulting on its credit card debt, the Wall Street Journal reports. Pat Toomey, meanwhile, introduced a just-in-case bill that would prioritize the order the Treasury paid its bills, ensuring it paid its debt interest, Social Security benefits, and military pay, and authorizing it to borrow enough to pay those expenses if it fell short.

In this Sept. 23, 2008 file photo, the amount of U.S. national debt on Sept. 23 is shown on the National Debt Clock in New York.
In this Sept. 23, 2008 file photo, the amount of U.S. national debt on Sept. 23 is shown on the National Debt Clock in New York.   (AP Photos/Bebeto Matthews, file)
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