A sign for financial firm Fitch Ratings on a building in the Canary Wharf business and shopping district in London, UK, on Thursday, March 1, 2012.
Matt Loyd | Bloomberg | Getty Images
WASHINGTON — A stark new warning from the credit rating agency Fitch about U.S. debt on Thursday added new urgency to the ongoing debt ceiling negotiations between the White House and Congressional Republicans, with just seven days left before the United States threatens to default on their debts.
Fitch Ratings, one of the three major rating agencies, announced Wednesday evening that it had set the United States’ triple-A status to ‘rating watch negative’.
“The debt ceiling failure, the failure of US authorities to meaningfully address the medium-term budgetary challenges that will lead to rising budget deficits and a growing debt burden point to downside risks to US creditworthiness,” Fitch said in a statement. the decision.
The agency also strongly suggested that if Congress could not reach a deal before the Treasury Department’s June 1 deadline to raise or suspend the debt limit, Fitch would downgrade America’s credit rating.
Such a failure “would send a negative signal from broader governance and the willingness of the US to meet its commitments in a timely manner, which Fitch said would likely be inconsistent with an ‘AAA’ rating.”
The warning came just hours after House Speaker Kevin McCarthy tried to calm jittery financial markets.
“I wouldn’t scare the markets in any way,” the California Republican told Fox Business Wednesday. “We will come to an agreement… and there should be no fear.”
On Thursday, negotiators appeared to have made little discernible progress in more than a week of nearly round-the-clock talks.
Adding to the deadline concerns was the House leadership’s decision to send members home for a week-long break, albeit with instructions to be ready to return to D.C. if their votes were needed to pass a compromise law.
“I don’t know if we have a deal today,” McCarthy said Thursday morning as he entered the Capitol.
“We’ve already talked to the White House today, we’ll continue to work,” he said as he stepped outside after the day’s only voice sequence. “They work on numbers, we work on numbers and we will work together.”
Still, another Republican negotiator was optimistic about reaching a deal before the holiday weekend. Rep. Oklahoma’s Kevin Hern told Reuters he believes it is “likely” that a deal will be reached Friday afternoon.
“We’re getting closer to a deal. I think it’s some of the finer points they’re working on right now,” said Hern, who heads the major Republican Study Committee. “You’ll probably see a deal tomorrow afternoon.”
This is an evolving story. Check back later for updates.