Chinese Agency Downgrades U. S. Rating

Harry Reid and Mitch McConnell

A little-known Chinese ratings agency has downgraded the rating of the United States from A+ to A. The move is unlikely to affect U.S. borrowing rates but reflects the pessimism Washington's debt battle has generated worldwide.

President Barack Obama signed emergency legislation to boost the debt ceiling ahead of a deadline to avoid an unprecedented national default. Still, China's Dagong Global Credit Rating Co. said Wednesday that the deal doesn't change the fact that U.S. debt growth has outpaced its economy and fiscal revenue. Dagong is little-known outside China but hopes to compete with global ratings agencies Moody's, Standard & Poor's and Fitch. Moody's has said the U.S. will retain its highest bond rating but with a "negative" outlook.

"The squabbling between the two political parties on raising the U.S. debt ceiling reflected an irreversible trend on the United States' declining ability to repay its debts," Dagong Chairman Guan Jianzhong told CNN.

"The two parties acted in a very irresponsible way and their actions greatly exposed the negative impact of the U.S. political system on its economic fundamentals," he said.

Ironically, Dagong's move could hurt not just the United States but also China, the largest foreign owner of U.S. debt with holdings worth almost $1.2 trillion.

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