House out for 3-day weekend to attend far-right event in Paris as Moody’s lowers U.S. credit outlook, citing political dysfunction
"We are just 8 days away from a devastating government shutdown — and instead of working in a bipartisan way to keep the government open, Speaker Johnson sent Congress home early for the weekend," tweeted Rep. Abigail Spanberger (D-Virginia). "This is completely unacceptable."
Moody’s on Friday offered a sharp rebuke of political dysfunction in the United States, with the credit-rating agency changing its outlook for U.S. sovereign debt to negative from stable.
Fitch downgraded the United States’ long-term credit rating in August, following Standard & Poor’s, which did so in 2011 after a debt ceiling standoff in Congress.
More than a decade ago — in 2011 — Congress was in a very similar position after Republicans retook the House, and Democrats held the White House and the Senate. Then, as now, the GOP was balking on an increase to the debt ceiling unless they got the spending cuts they demanded.
Republicans’ unwillingness to back down on spending cuts almost led the US to intentionally go over the brink for the first time, a near miss that contributed to the country’s credit rating getting downgraded by Standard & Poor’s. Back then, markets plummeted, and the country’s borrowing costs went up by $1.3 billion.
Because the US was so close to default, the stock market had already dipped and the cost of borrowing had increased for the government as well. Higher borrowing costs effectively mean the government has to pay more for loans and has fewer resources to spend on public investments like infrastructure. Additionally, in part due to the Republican brinksmanship involved, the credit rating agency S&P downgraded the country’s credit rating for the first time in US history, signaling to potential buyers that taking on US debt wasn’t as safe as it once was, and undercutting global trust in the country’s economy.
The outcome in 2011 revealed that even getting close to a default was dangerous and had a problematic impact on the economy, experts say. “This is an entirely human-made crisis that adds extra cost to the taxpayer, that can lead to market volatility, and that’s totally avoidable,” said David Vandivier, a former Treasury Department official.
Repeating this doesn’t make sense
That warning may go unheeded, however. While Democrats have argued that the debt ceiling — which covers debts the US government has already incurred — should be separate from negotiations on the budget and spending, Republicans have indicated that they’re eager to use this opportunity to secure possible savings, even if it incurs risks that became apparent in 2011.
“Continued political polarization within U.S. Congress raises the risk that successive governments will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability,” Moody’s said in a statement Friday.
It warned of “downside risks” because of a rising budget deficit with no apparent plan to rein in the deficit at a time of significantly higher interest rates from the Federal Reserve.
Moody’s cited a string of recent red flags, including brinkmanship over the debt limit, the ouster of the House speaker and rising threats of another government shutdown. “In Moody’s view, such political polarization is likely to continue,” the firm said, making it increasingly difficult for lawmakers to “reverse widening federal deficits.”
Long-term U.S. borrowing costs have recently risen because of concerns about the Treasury Department’s ability to address the country’s $1.7 trillion budget deficit. Fears of a possible government shutdown starting next week only add to concerns of a theater of chaos.
“The American economy remains strong, and Treasury securities are the world’s preeminent safe and liquid asset,” Deputy Treasury Secretary Wally Adeyemo said in a statement.
And so, off to the Nazi’s and Racist’s we go.
Even though a potential federal government shutdown is just eight days away, House Speaker Mike Johnson (R-Louisiana) sent lawmakers home early for a long weekend to tend to a different priority: Catching a flight to Paris.
The New Republic reported Friday that Johnson — who still has yet to present a plan to fund the government before the November 18 deadline — gaveled the House of Representatives out of session on Thursday so he can make it to the Worldwide Freedom Initiative's (WFI) upcoming conference in Paris, France, where he's due to speak Friday night.
This weekend's WFI conference features an array of prominent far-right figures. In addition to Johnson, Governor Kristi Noem (R-South Dakota) will also be in attendance, along with her paramour Corey Lewandowski, who was found to have had a years-long affair with Noem earlier this year despite Noem still being legally married to her husband. A spokeswoman for far-right public education activist group Moms for Liberty — an anti-LGBTQ group whose school board candidates suffered multiple staggering losses in five different states Tuesday night — is also speaking. A promotional flyer for the event also teases appearances by Truth Social CEO (and former California Congressman) Devin Nunes, as well as former Trump campaign manager David Bossie.
Johnson will also be joined at the conference by various international far-right activists, including Brexit architect Nigel Farage, French politician Eric Zemmour — who has defended the Nazi Party's French collaborators — and Balázs Orbán, who serves as political director to extremist Hungarian leader Viktor Orbán (no relation).
This weekend isn't Johnson's first introduction to the WFI, with TNR reporting that the newly minted House speaker delivered the keynote speech at the group's launch event earlier on the 4th of July prior to his colleagues giving him the speaker's gavel. Johnson has also been making his rounds with right-wing media since becoming speaker, giving multiple interviews to Fox News, Newsmax and One America News Network.
