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Junk grade for Washington over debt mess

Business Times - 02 Aug 2011


Junk grade for Washington over debt mess

The immature way Congress and the White House handled the process shows them both in a most unflattering light

By LEON HADAR
WASHINGTON CORRESPONDENT

THE credit-rating agencies in New York had put the US government on notice that it might lose its 'AAA' debt grade unless Congress approved the extension of the debt ceiling by today. Now that the White House and the Republican congressional leadership have been able to reach a deal over the debt ceiling coupled with an agreement on a framework for cutting the federal budget deficit, US Treasury bonds will probably not lose their triple-A grade. The holders of these bonds including the Chinese central bank can breathe a sigh of relief - at least until the next political crisis in Washington.

But you don't have to be an analyst in a credit-rating agency to figure out the grade (based on the way they have been handling the budget mess in Washington) that Congress …