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

Friday
July 11, 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
FRIDAY, JULY 11, 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

  • Bangladesh's delegation, led by Commerce Adviser Sk Bashir Uddin, began high-level negotiations with USTR Ambassador Jamieson Greer at 9pm Bangladesh time on Thursday (10 July). Photo: Collected from the Facebook handle of Golam Mortoza, Press Minister at the Bangladesh Embassy in the US
    No need to worry as US tariff talks ongoing: Fouzul tells biz leaders
  • Economist Abul Barkat; Photo: Courtesy
    Economist Abul Barkat arrested in graft case
  • Representational image. Photo: Syed Zakir Hossain/TBS
    Explainer: Why SSC pass rate hit a 17-year low

MOST VIEWED

  • Graphics: TBS
    BB raises startup fund limit, drops upper age barrier
  • Workers pack undergarments at the packing section of a garment factory in Ashulia, on the outskirts of Dhaka, Bangladesh, April 19, 2025. Photo: REUTERS/Fatima Tuj Johora
    After US tariffs, jobs hang by a thread in Bangladesh's garments sector
  • Photo: Mohammad Minhaj Uddin/TBS
    SSC, equivalent results: Pass rate drops to 68.45%, GPA-5 also declines
  • File photo of containers at Chattogram port/TBS
    US buyers push Bangladeshi exporters to share extra tariff costs
  • Govt vehicle purchase, foreign trip, new building construction banned: Finance ministry
    Govt vehicle purchase, foreign trip, new building construction banned: Finance ministry
  • Students sit for SSC exam at Motijheel Girls' High School on 10 April 2025. Photo: Mehedi Hasan/TBS
    SSC exam results out: Here's how you can check online and via SMS

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

Photo: Collected/BBC

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

6h | The Big Picture
Illustration: TBS

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

9h | 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

9h | Panorama
Photo: Rajib Dhar/TBS

11 July 2024: Riot vehicles, water cannons hit the streets as police crack down on protesters

2h | Panorama

More Videos from TBS

'Hypocrisy' will not continue, Iran tells IAEA

'Hypocrisy' will not continue, Iran tells IAEA

5h | TBS World
OpenAI to release web browser in challenge to Google Chrome

OpenAI to release web browser in challenge to Google Chrome

5h | TBS World
Will the title 'Honorable and Excellency' be abolished?

Will the title 'Honorable and Excellency' be abolished?

6h | TBS Today
July Declaration must be constitutionally recognized: Akhtar Hossain

July Declaration must be constitutionally recognized: Akhtar Hossain

5h | TBS Today
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