President Barack Obama’s administration privately attempted to dissuade Standard and Poor’s from downgrading the United States’ debt outlook in recent weeks, according to a report from The Washington Post.
However, the financial agency went ahead and changed America’s status from “stable” to “negative” on April 18, which is an indication that the U.S. may lose its AAA credit rating in the coming years. Officials who are familiar with the matter told the media outlet that Treasury Department officials attempted to convince S&P analysts that they were underestimating Federal lawmakers’ abilities to curb deficits.
The “negative” outlook puts renewed pressure on Obama and legislators to tackle the government’s current $1.5 trillion budget deficit, which is equivalent to about 9.8 percent of U.S. economic output, according to The Huffington Post. Furthermore, the Treasury estimates that the nation will surpass its $14.3 trillion debt ceiling by May 16.
Last week, the President proposed a plan that would eliminate $4 trillion from the budget deficit over the next 12 years through spending cuts and tax increases on wealthy Americans. On April 15, the GOP-led House of Representatives approved a measure that would trim $4 trillion over the next decade.
The Republican-backed plan includes a repeal of Obama’s healthcare law and an extension of former President George W. Bush’s tax cuts for all Americans.