WASHINGTON -- As Moody’s Investors Service threatened to downgrade the United States’ top debt rating, House Speaker John A. Boehner said Tuesday he doubted Congress could reach a bipartisan budget deal to avoid that potentially dangerous outcome.
“I’m not confident at all,” Boehner told reporters.
Boehner’s office later clarified that the speaker had not yet learned of the Moody’s outlook before commenting, and he released a statement saying the new report “underscores the point we have been making all year: the threat to American jobs comes not from action on our debt, but from inaction on our debt.”
The sober assessment from the Republican leader brought swift rebuke from Democrats.
“With our nation inching closer to the ‘fiscal cliff,’ Speaker Boehner’s lack of determination to reach an agreement is due to his party’s intransigence and partisan obstructionism,” said Rep. Nancy Pelosi of San Francisco, the minority leader.
Boehner has long said his biggest regret as speaker was being unable to forge a ‘grand bargain’ with President Obama that would cut spending and bring in more revenue to rein in the nation’s unsustainable debt load. Debt hit $16 trillion last week.
The speaker and the White House have blamed each other for having dashed the debt deal last summer.
“People in both parties know what needs to be done to free our economy from the destructive debt that is blocking robust growth: we need to fundamentally reform our tax code, reduce spending, save Medicare, and reform other critical programs that are heading toward bankruptcy,” Boehner said in the statement. “Americans deserve a president who will get Washington moving on the solutions we know are needed.”
But they will have another chance after the November election, when Congress faces the so-called fiscal cliff -- the December expiration of lower income tax rates that had been established during the George W. Bush administration, which would raise taxes across most income levels; and steep federal budget cuts agreed to by Congress that both sides now want to prevent.
The disagreement may not be resolved in the lame-duck session, and many expect tax and spending issues to be dominant in Congress in 2013.
Moody’s on Tuesday said the nation’s AAA debt rating was threatened unless Washington devised a debt-reduction agreement.
The ratings agency did not downgrade the U.S. rating after last summer’s debt negotiations failed, as Standard & Poor’s did. But it did issued a negative outlook.
Yet the political dynamic remains the same now as it did then: Republicans refuse to raise taxes by allowing current tax rates on wealthier Americans to expire, as the president wants; Democrats resist cuts to Medicare or other domestic programs unless the GOP agrees to new revenue.
[For the Record, 6:08 a.m. PDT Sept. 12: This post has been updated to include clarifications from Boehner’s office.]