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28th District of Texas – America has been handed a new challenge. This time it does not have to do with deficit reduction or raising the debt ceiling, instead it has to do with the United States long-term credit. A major credit rating agency, Standard and Poor’s (S&P) lowered the United States top-notch AAA credit rating to AA+ last week – a first in U.S. history. I would like to take this opportunity to inform you on what this downgrade means for the nation and your wallet.

 

After months of debt talks in Congress to reduce the deficit and avoid a default, a debt deal was reached to cut over $2 trillion in spending over the next decade and raise the debt limit. Credit rating agencies, including S&P, had warned that failure to raise the debt ceiling would lead to a credit downgrade. As it turns out, deal or no deal – the U.S. credit was downgraded. According to S&P, there were numerous factors that contributed to this decision, including political uncertainty within the fiscal policy debate and negative outlooks of long-term debt stability. I remain extremely concerned that this U.S. downgrade not only has a dim global perspective for investors, but Americans will be negatively affected.

 

            You can compare our national credit downgrade to your personal credit score. Once your score gets downgraded, your ability to borrow decreases–the same is true for the nation. Economists have estimated that this downgrade would raise the nation’s borrowing costs by $100 billion a year. Now that the United States is considered a financially riskier country, as a result we may have to pay higher interest rates. If the government pays more, then you will pay more. Everyone from homeowners to college students to those purchasing a new car may encounter higher loan rates. Additionally, the downgrade may also accelerate the depreciation of the dollar, which could lead to increasing costs on everyday purchases for Americans. The credit downgrade equates to less money in your wallet, less consumer spending, and slower economic growth. 

 

House Republicans irresponsible handling of debt negotiations has had a direct affect on the economic uncertainty the United States is experiencing today. It is no coincidence that soon after the Tea Party and ideological Republicans took over the House of Representatives Majority, the U.S. is stripped of its top credit rating. At a time of mounting debt, mostly accumulated from the past decade, the lack of leadership from the House Majority weakened our already struggling economy and caused the S&P downgrade. Putting ideological politics over sound governing is no way to run the government.

           

The U.S. has become a mismanaged country that needs a readjustment to reinstate economic stability. The downgrade is urgent in nature, but does not change my priorities on fiscal responsibility. Reducing the deficit and ultimately creating a surplus in the United States federal budget, as the Clinton administration was able to accomplish, has always been one of my priorities. The nation and lawmakers have new hurdles to overcome since the downgrade. Now is the time to roll up our sleeves balance the budget and get Americans back to work, which is why earlier this week, I sent a letter to House Speaker John Boehner and House Democratic Leader Nancy Pelosi urging the two to bring lawmakers back to Washington – we cannot afford to wait until September to start working on these vital issues.