UPDATE 1-White House: Moody's underscores need to act on debt

Fri Jun 3, 2011 11:30am EDT

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ON BOARD AIR FORCE ONE, June 3 (Reuters) - A warning of a possible credit rating cut by Moody's underscores the need for a bipartisan deal on the U.S. debt ceiling, a White House spokesman said on Friday.

The Thursday report from the ratings agency made clear that Congress needs to act for the United States to meet its financial obligations, White House spokesman Josh Earnest told reporters on Air Force One.

"It also demonstrates that we need to act in a bipartisan fashion to engage in long-term deficit reform," he said on the way to Toledo, Ohio, where U.S. President Barack Obama was to visit a Chrysler plant.

Moody's said it would consider cutting the United States' top-notch credit rating if the White House and Congress do not make progress by mid-July in talks to raise the debt limit, which constrains the amount the government can borrow. [ID:nN01214888]

Earnest said there was "a lot of cause for optimism" on the U.S. economy and said a debt deal could give a further boost.

"The president believes that long-term deficit reduction is something that is good for the economy," Earnest said.

(Reporting by Alister Bull, Writing by Laura MacInnis, Editing by Sandra Maler)

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Comments (7)
blitz2020 wrote:
Debt = Slavery

When will We the People ever learn.

Jun 03, 2011 12:09pm EDT  --  Report as abuse
drewsands1 wrote:
Moody’s AAA ratings for garbage from a Garbage useless Company. Who care what Moody’s thinks. I don’t that is why there is no comments.

Jun 03, 2011 12:15pm EDT  --  Report as abuse
psoreilly wrote:
The US can’t possibly pay off or even service this debt burden without additional borrowing which is spiraling out of control. The game is up. Only through additional intervention by the Federal Reserve will the debt be serviceable as there is not enough private and foreign capital to invest in US treasuries at the rate of $125 billion dollars per month for the next few years. Raising the debt ceiling is a sideshow and could be unnecessary if the Federal Reserve takes the necessary action to buy up and forgive US debt as part of a debt restructuring plan. The other elements of this plan must include much reduced budgets and a balanced budget amendment that will put in real controls on deficit spending based on hard numbers not on estimations which are subject to unauditable manipulations.

Jun 03, 2011 12:36pm EDT  --  Report as abuse
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