Fitch puts US credit rating on watch

The U.S. may default on its debt next week without congressional action
Credit firms would dock the U.S.'s rating, making borrowing more expensive
A deal is not expected before Memorial Day

Updated: May 25, 2023 / 06:29 AM CDT

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(NewsNation) — One consequence of a potential U.S. default on its debt became a little more real Wednesday night.

Ratings agency Fitch put America’s AAA credit rating on watch. If Congress doesn’t raise the debt ceiling before the Treasury Department runs out of money to pay its bills, it could go down. That could happen next week.

This could make it more expensive for America to borrow money, similar to a bank charging a higher interest rate to someone with a low credit score.

A White House spokesperson says, “This is one more piece of evidence that default is not an option and all responsible lawmakers understand that. It reinforces the need for Congress to quickly pass a reasonable, bipartisan agreement to prevent default.”

And a spokesperson for the Treasury Department added, “[This] warning underscores the need for swift bipartisan action by Congress to raise or suspend the debt limit and avoid a manufactured crisis for our economy.”

The government may no longer be able to pay its military or Social Security recipients without raising the debt limit.

House Speaker Kevin McCarthy is set to send the House home for Memorial Day weekend without a deal despite another hourslong meeting at the White House Wednesday between White House and Republican negotiators.

McCarthy and his negotiators said Wednesday the sides are still apart, specifically on the major issue of federal spending and spending cuts.

Even though the House is expected to break for Memorial Day, its members will need to be ready to cut their vacations short. House Republicans were told they will receive 24 hours notice to get back to Washington for votes.