If the U.S. wants to save its coveted triple-A credit rating, Congress better listen up.
That was the message delivered on Wednesday by a Standard & Poor’s (NYSE:MHP) ratings company official, who told Dow Jones Newswires that lawmakers will need to “very carefully” consider the recommendations from President Barack Obama’s commission on fiscal responsibility.
John Chambers, the sovereign-ratings committee chief of S&P, told the wire service in an interview that how Congress responds to the commission’s proposals on soaring U.S. deficits will significantly influence the ratings company’s outlook on the U.S. credit rating.
“It is very important for the credit standing of the United States that the Congress considers very carefully what the fiscal commission proposes," Chambers said.
After decades of being all but taken for granted, the U.S. credit rating has come into question amid massive government borrowing to fund emergency spending on the economy, two wars and countless social programs. To add to that, the U.S. economy is struggling to recover from the Great Recession, putting further pressure on tax revenues.
“The U.S. economy has enough resilience to post 2% growth this year and next, and the world economy will chug along at a lackluster pace but still a positive pace," Chambers said in the Dow Jones interview.
Pointing to the success of similar commissions in the past, Chambers said the onus will be on lawmakers to act even as the looming mid-term elections and risk of political uncertainty could cast doubt on the efforts to cut the deficit.
S&P currently has a stable outlook on the U.S.’s credit rating, meaning there isn’t a significant chance of a downgrade in the near future.