CHICOPEE, Mass. (WWLP) – The U.S. is one week away from the debt ceiling deadline, and what feels like years away from an agreement, and all this political partisanship is now causing trouble for the U.S. credit rating.
Negotiators worked until midnight Wednesday night, with democrat and republican lawmakers wrestling over cuts and spending in the debt ceiling agreement. Although the deadline is only seven days away on June 1, not a lot of progress is being made with the White House warning just yesterday that negotiations had hit a speed bump; And with no bill to vote on, lawmakers are leaving for the memorial day weekend.
Meanwhile, all this political partisanship could cause the U.S. to loose it’s triple a credit rating. Fitch Ratings agency put the United States’ triple A credit on “ratings watch negative,” warning of a possible downgrade.
This is not the first time U.S. credit has faced a downgrade. In fact in 2011, S & P downgraded the credit rating to AA plus under similar circumstances.
St. Germain Investments Senior Vice President Matthew Farkas, telling 22News, “The potential downgrade by fitch, its upsetting, it can be unnerving. At the end of the day this is a political issue, it has nothing to do with the U.S. means or ability to pay the debt. Everyone realizes this is a very wealthy country with the ability to service our debt.”
This political brinkmanship can lead to market volatility, alarming headline, but financial experts like Farkas say don’t let it shake you. “I think the take away for folks is don’t panic, don’t make any short-term brash decisions with your investments that you may regret down the road.”
People here in Springfield are hopeful that cooler heads will prevail in Washington and a default will be avoided. Springfield resident Jeffery Drayton, tells 22News, “I would hate to see it happen because a lot of people could loose quite a bit of life savings, their livelihoods and all of that, you know? I would hope that they could reach an agreement between the president and the house there.”
Friday 22News continues it’s coverage of the debt ceiling crisis, with a closer look at people in our area on limited incomes, who are worried about potential cuts to some of their benefits.