The remarks, made by Richard Francis on CNBC, came one day after Fitch downgraded the United States’ top-tier AAA rating to AA+, sparking a strong response from the White House and Treasury Department.
In its decision to downgrade the US rating, which marks only the second-ever downgrade by a major ratings agency, Fitch cited a mounting government debt burden and an “erosion of governance” evident in repeated debt limit impasses.
“We have observed a consistent decline in governance over the past few decades,” Francis stated on CNBC.
He highlighted January 6 as one of the contributing factors, referring to the date in 2021 when supporters of Donald Trump stormed Congress in an attempt to hinder the certification of Joe Biden’s election victory.
Francis also mentioned “constant brinksmanship surrounding the debt ceiling,” as well as the inability of Republicans and Democrats to generate “meaningful, long-term solutions” to address fiscal issues related to programs like social security and Medicare.
However, the White House and Treasury Secretary Janet Yellen emphasized the strength of the US economy, which has defied predictions of an imminent recession thus far, as they expressed disagreement with Fitch. Francis noted on Wednesday that entering or avoiding a recession does not significantly impact the key factors Fitch focuses on, nor does it address the issues of debt stabilization or governance.
In a separate interview, Jared Bernstein, Chair of the Council of Economic Advisers, stated that the timing of the downgrade “doesn’t make sense” and pointed out improvements made under Biden’s leadership.