Trump’s Spending Under Fire After U.S. Credit Downgrade

(AURN News) — President Donald Trump’s fiscal policies are under renewed scrutiny after Moody’s downgraded the U.S. credit rating from Aaa to Aa1, citing the nation’s rising debt, widening deficits and mounting interest costs. While Moody’s did not name Trump in its downgrade announcement, the agency pointed to long-term trends that have intensified under his administration. Federal spending has increased sharply, and Trump has called for extending the 2017 Tax Cuts and Jobs Act — moves that analysts say are worsening the country’s fiscal outlook. “Over more than a decade, US federal debt has risen sharply due to continuous fiscal deficits. During that time, federal spending has increased while tax cuts have reduced government revenues,” Moody’s said in a statement. The agency projected that without changes to taxation or spending, the government’s budget flexibility will remain limited. It expects mandatory spending — including interest payments — to rise from 73% of total federal outlays in 2024 to 78% by 2035. Moody’s also warned that extending the 2017 tax law would add about $4 trillion to the federal primary deficit over the next decade. Deficits are projected to reach nearly 9% of GDP by 2035 — up from 6.4% this year — with debt rising to 134% of GDP, up from 98% in 2024. According to CBS News, federal spending under Trump is now higher on a day-to-day basis than in nine of the past 10 years. In the first 100 days of his presidency, spending was $200 billion higher than during the same period the year before. The Committee for a Responsible Federal Budget, a nonpartisan watchdog group, called the downgrade a warning sign that policymakers are heading in the wrong direction. “Can you hear that? It’s the sound of not one, not two, but all three major credit rating agencies now saying the same thing: the US fiscal situation is unsustainable,” said Maya MacGuineas, the group’s president. “At the very least, we should not be considering adding more than $3 trillion to the debt — or $5.2 trillion if temporary provisions are made permanent — after we were just told our credit worthiness is inferior to what it was,” she added.Trump has touted cost-cutting efforts through the Department of Government Efficiency, but so far, overall federal expenditures have continued to grow. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.