WASHINGTON (AP) — House Speaker John Boehner said Tuesday that he’s not confident Congress can reach a budget deal and avoid a downgrading of the U.S. debt rating.
Moody’s Investors Service said Tuesday that it would likely cut its “Aaa” rating on U.S. government debt, probably by one notch, if budget negotiations fail.
Boehner was asked at a Capitol Hill news conference how confident he was that negotiations would prevent the government from hitting the so-called fiscal cliff — an economy rattling set of across-the-board spending cuts and higher taxes caused by the expiration of Bush-era tax cuts that are set to hit in January.
“I’m not confident at all,” Boehner said.
The Ohio Republican reminded reporters that the House has passed legislation to both avoid the automatic, across-the-board cuts next year and to renew the Bush era tax cuts for one year as well. Republicans warned of the impact of the impending cuts on the military and implored Senate Democrats to act to avoid them.
The Senate, however, has deadlocked over taxes and failed to address the across-the-board cuts, known as a sequester in Washington parlance.
“Listen, the House has done its job, both on the sequester and the looming debt fights that’ll cost our economy some 700,000 jobs,” Boehner said. “On both of these, where’s the president, where’s the leadership.”
Obama has called for replacing the sequester with a combination of tax hikes and cuts elsewhere in the budget. But his call for higher taxes on upper bracket earners has been repeatedly rejected by Republicans.
Any real negotiations on avoiding the combination of fiscal austerity are not expected until after the November elections — and the outcome is sure to play a huge role in how the issue plays out in a post-election lame duck congressional session.