WASHINGTON (AP) — Fitch Ratings has downgraded the U.S. credit rating, citing an expected increase in government debt over the next three years and a “steady deterioration in standards of governance” over the past two decades.
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The rating was cut one notch to to AA+ from AAA, the highest possible rating. The new rating is still well into investment grade.
Fitch cited the worsening political polarization around spending and tax policy as a key reason for the downgrade. It said U.S. governance has declined relative to other highly rated countries and it noted “repeated debt limit standoffs and last-minute resolutions.”
In 2011, the ratings agency Standard & Poors stripped the U.S. of its prize AAA rating and also pointed to partisan divisions that made it difficult for the world’s biggest economy to control spending or raise taxes enough to reduce its debt.
Reduced credit ratings could lead the U.S. to pay higher interest rates on its notes, bills, and bonds.