"Thank you for contacting me about federal spending and the importance of fiscal responsibility. Getting America's fiscal house in order is one of my top priorities in the new Congress.
As you may know, when President Obama took office, the federal deficit was $1.3 trillion. Since then, the deficit has significantly increased due in large part to the enactment of the American Recovery and Reinvestment Act, which appropriated nearly $800 billion in emergency spending to stimulate the ailing economy and avert an economic disaster not seen since the Great Depression.
It is clear that the level of federal spending and debt has now reached a crisis stage and that Congress and the President must act to bring it under control. The report released by the National Commission on Fiscal Responsibility and Reform is a critical step in focusing national attention on the deficit and recognizing that all aspects of government spending must be carefully examined. While I believe everything must be on the table – from defense spending, to entitlement spending, to tax loopholes, to line item appropriations – these cuts must not disproportionately affect seniors or low and middle income Americans."
"Two leading credit rating agencies on Thursday cautioned the U.S. on its credit rating, expressing concern over a deteriorating fiscal situation that they say needs correction.Moody's Investors Service said in a report Thursday that the U.S. will need to reverse an upward trajectory in the debt ratios to support its triple-A rating."We have become increasingly clear about the fact that if there are not offsetting measures to reverse the deterioration in negative fundamentals in the U.S., the likelihood of a negative outlook over the next two years will increase," said Sarah Carlson, senior analyst at Moody's.View Full ImageBloomberg NewsA Wall Street sign stands outside the New York Stock Exchange. S&P and Moody's warned the U.S. about its credit rating and urged the government to do more to arrest a deteriorating fiscal situation.
"The view of markets is that the U.S. will continue to benefit from the exorbitant privilege linked to the U.S. dollar" to fund its deficits, Carol Sirou, head of S&P France, said at a Paris conference Thursday. "But that may change. We can't rule out changing the outlook" on the U.S. sovereign debt rating in the future, she warned. She added the jobless nature of the U.S. recovery was one of the biggest threats to the U.S. economy. "No triple-A rating is forever," she said.Standard & Poor's Corp. on Thursday also didn't rule out changing the outlook for its U.S. sovereign-debt rating because of the recent deterioration of the country's fiscal situation. The U.S. currently has a triple-A rating with a stable outlook at both agencies.