President Obama says “America cannot afford another debate” over the debt limit. In one respect he’s right, the debate is over – we need to cut spending. Fitch Ratings made it clear today that America’s national debt is undermining our economy, and that raising the debt limit without making serious spending cuts and reforms could result in another credit downgrade for the United States:

  • “The United States risks losing its AAA credit rating from Fitch if any deal to raise the legal borrowing limit does not include a plan to put public finances on a more sustainable footing.” (CNN Money)
  • “The agency said that even if a deal on the debt ceiling was agreed, if the government did not implement a credible plan to cut its deficit, it was likely to downgrade US debt later this year in any case.” (BBC)
  • “Fitch also warned that fundamental strengths in the US economy were being undermined by the weight of debt and associated strains.” (AFP)

Ratings agency S&P made a similar warning in 2011 when it downgraded the U.S., noting that reforming and preserving our entitlement programs is the “key to long-term fiscal sustainability.”

“The American people do not support raising the debt ceiling without reducing government spending at the same time,” said Speaker John Boehner. “The House will do its job and pass responsible legislation that controls spending, meets our nation’s obligations and keeps the government running, and we will insist that the Democratic majority in Washington do the same.”