Republicans split on US credit downgrade as party's tax bill lingers | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Saturday
July 12, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
SATURDAY, JULY 12, 2025
Republicans split on US credit downgrade as party's tax bill lingers

USA

Reuters
18 May, 2025, 12:00 pm
Last modified: 18 May, 2025, 12:03 pm

Related News

  • Moody's downgrade intensifies investor worry about US fiscal path
  • Moody's cuts America's pristine credit rating, citing rising debt
  • US tariffs: Banks in Bangladesh to be among worst hit in Asia, says Moody's
  • Moody’s downgrades Bangladesh banking sector outlook to negative
  • India's tax relief may not be enough to boost economic growth, Moody's says

Republicans split on US credit downgrade as party's tax bill lingers

The downgrade, announced on Friday evening, came only hours after a handful of Republicans on the US House of Representatives' budget committee blocked progress of President Donald Trump's tax and spending legislation due to their concerns of its potential to balloon the federal deficit

Reuters
18 May, 2025, 12:00 pm
Last modified: 18 May, 2025, 12:03 pm
A view from the US Senate side shows the US Capitol Dome (L) in Washington, US, October 4, 2013/ Reuters
A view from the US Senate side shows the US Capitol Dome (L) in Washington, US, October 4, 2013/ Reuters

Highlights:

  • Some Republicans blame rating change on politics
  • Others see downgrade as need of spending cuts
  • Party's tax bill stalled after Friday failed vote

Moody's downgrade of the US sovereign credit rating has elicited mixed responses among Republicans in Congress, with some questioning the motive behind the change and others depicting it as a warning that lawmakers should heed as they wrestle with a sweeping tax and budget bill.

The downgrade, announced on Friday evening, came only hours after a handful of Republicans on the US House of Representatives' budget committee blocked progress of President Donald Trump's tax and spending legislation due to their concerns of its potential to balloon the federal deficit.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

The credit rater is the last of the major ratings agencies to strip the US of the highest rating of AAA. Moody's, which cut the rating one notch to "Aa1", said it was making the change because successive US administrations of both parties and Congress have failed to reverse annual fiscal deficits and growing interest costs.

Moody's argued that "current fiscal proposals under consideration" offered insufficient spending cuts.

Nonpartisan analysts estimate the proposed legislation, which in part would extend Trump's 2017 signature tax cuts, could add trillions to the federal government's $36.2 trillion in debt.

Representative Jason Smith, the Republican tax committee chairman shepherding the bill, said that Moody's downgrade was "a cover-up of President Biden's economic failures."

"It's hardly a surprise that the greatest economic cheerleader of Biden's economic disasters refuses to recognize that Republicans have delivered $1.6 trillion in savings as part of the one, big, beautiful bill," Smith, from Missouri, said in a statement, referencing the tax and budget legislation.

"This Moody's downgrade is nonsense," said Representative Jimmy Patronis, a Florida Republican. "Using credit ratings to hop in a news cycle is irresponsible of them."

Moody's did not immediately respond to a request for comment.

The criticism of the rating agency's move echoes the response to Fitch's credit downgrade in August 2023, when Biden administration officials argued decisions in Trump's first term were the cause of the credit hit.

Other Republicans -- including key tax bill holdouts -- depict the downgrade as proof that their fiscal concerns on the proposed legislation are valid.

Representative Andy Harris, a Maryland Republican who leads the fiscal hardliners in the House Freedom Caucus, said in a social media post that the downgrade was a "signal that we can wait no longer to address the debt crisis" and that his support for the tax bill hinges on more spending cuts.

Moody's estimated the nation's debt burden could reach 134% of gross domestic product by 2035, compared with 98% in 2024.

TAX BILL ON THE LINE

House Speaker Mike Johnson has been locked in a multi-front negotiation within his conference as the party-line approach of Republicans - which enjoy a slim 220-213 majority in the lower chamber - means a small faction of lawmakers could sink the bill.

Despite a range of specific concerns from Republican lawmakers on aspects of the tax and budget bill, the legislation moved successfully through committee debates this week until Friday's House budget meeting, where five Republicans joined Democrats to put the skids on the tax bill progress.

Republicans set a redo vote for late Sunday evening and said they were working through the weekend in the hope of reaching consensus.

"We have to deliver in extending the tax cuts but also getting the spending cuts necessary to get deficits down," Representative Chip Roy, a Texas Republican, said after his Friday vote against moving the budget bill ahead.

Roy and other deficit hawks are pushing for more stringent work requirements for Medicaid, the low-income healthcare program, to kick in sooner to increase saving opportunities.

Such savings are a political high-wire act for Republicans, as more reductions to Medicaid and cuts to food assistance risk inflaming dissent from other Republicans concerned about the impact to their constituents.

"We need serious, responsible budgeting - not another reckless scheme that robs working families to reward the ultra-wealthy," said Representative Brendan Boyle, the Pennsylvanian who is the top Democrat on the budget committee. "House Democrats are ready to govern. The question is whether Republicans are ready to wake up to the damage they're causing."

Top News / World+Biz

Moody's / Republican Party

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Representational image
    In addition to 35% tariff, US demands 40% local value addition for 'Made in Bangladesh' goods
  • Bangladesh and US hold tariff talks on 11 July 2025. Photo: CA Press Wing
    Dhaka, Washington to continue inter-ministerial dialogue as tariff talks end without full consensus
  • After indias visa restriction, China's Kunming is drawing bangladeshi patients
    After indias visa restriction, China's Kunming is drawing bangladeshi patients

MOST VIEWED

  • In terms of stream of education, girls maintained their excellence as well. Photo: TBS
    SSC 2025: Girls dominate boys by over 5%
  • Photo: Mohammad Minhaj Uddin/TBS
    SSC, equivalent results: Pass rate drops to 68.45%, GPA-5 also declines
  • The overall pass rate across all boards this year, 68.45%, is significantly lower than last year's. Photo: Focus Bangla
    SSC 2025: Rajshahi board records highest pass rate, Barishal lowest
  • How S Alam’s Global Islami Bank cooked Tk2,259cr loss into Tk128cr profit
    How S Alam’s Global Islami Bank cooked Tk2,259cr loss into Tk128cr profit
  • Representational image. Photo: TBS
    SSC 2025: 73.63% pass rate among technical students, 68.09% at Madrasahs
  • Economist Abul Barkat; Photo: Courtesy
    Economist Abul Barkat arrested in graft case

Related News

  • Moody's downgrade intensifies investor worry about US fiscal path
  • Moody's cuts America's pristine credit rating, citing rising debt
  • US tariffs: Banks in Bangladesh to be among worst hit in Asia, says Moody's
  • Moody’s downgrades Bangladesh banking sector outlook to negative
  • India's tax relief may not be enough to boost economic growth, Moody's says

Features

After indias visa restriction, China's Kunming is drawing bangladeshi patients

After indias visa restriction, China's Kunming is drawing bangladeshi patients

13h | Panorama
Photo: Collected/BBC

What Hitler’s tariff policy misfire can teach the modern world

1d | The Big Picture
Illustration: TBS

Behind closed doors: Why women in Bangladesh stay in abusive marriages

1d | Panorama
Purbachl’s 144-acre Sal forest is an essential part of the area’s biodiversity. Within it, 128 species of plants and 74 species of animals — many of them endangered — have been identified. Photo: Syed Zakir Hossain/TBS

A forest saved: Inside the restoration of Purbachal's last Sal grove

1d | Panorama

More Videos from TBS

Renowned economist Abul Barkat imprisoned

Renowned economist Abul Barkat imprisoned

11h | TBS Today
All of Iran's uranium still intact, Israel claims

All of Iran's uranium still intact, Israel claims

11h | TBS World
Trump-Netanyahu in new strategy on Gaza issue

Trump-Netanyahu in new strategy on Gaza issue

12h | TBS World
Shocking science: why birds stay safe on electricity lines

Shocking science: why birds stay safe on electricity lines

13h | TBS Stories
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net