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Conservatives have been holding out against the major tax and spending cut package to implement President Trump’s agenda, arguing it will swell federal deficits. The Moody’s downgrade underscored their concerns.
May 19, 2025Updated 7:16 p.m. ET
When the United States lost its last triple-A credit rating last week, the ratings firm that downgraded the nation’s debt pointed to ongoing gridlock in Congress and the potential enactment of a Republican fiscal plan that is projected to add trillions of dollars to the federal deficit.
In calling out Congress’s persistent political paralysis, Moody’s may have prolonged it, giving fresh ammunition to a group of fiscally conservative Republicans who had already stalled their party’s efforts to push through a tax and spending cut package that would implement President Trump’s domestic agenda.
Those lawmakers, ideologically opposed to growing the federal debt, have demanded major changes to the bill, even as they allowed it to advance past a critical hurdle on Sunday night. As written, the Republican plan would add roughly $3.3 trillion to the deficit over the next decade, according to the Committee for a Responsible Federal Budget, a nonpartisan group that calls for lower deficits.
The fiscal hawks have been demanding deeper cuts to federal programs, including Medicaid and food assistance, and further deficit reduction to gain their support. And as they continue to negotiate with Speaker Mike Johnson, who wants to bring the bill to a vote by Friday, they can now point to a debt downgrade as proof that their position is right.
Representative Thomas Massie of Kentucky, who has been vocally opposed to his party’s budget plan, used the Moody’s rating change to reinforce his position. The bill, he wrote on social media, would only serve to make “bond buyers realize we aren’t fiscally responsible.”
Still, whether the debt downgrade might have material effects on the progress of the bill is unclear. Though the debt downgrade might bolster the fiscal hawks’ arguments, it will do little to change them.
Anti-deficit conservatives were already pushing for more substantial cuts to federal programs. At the same time, Republican leaders are also haggling with a faction of moderate Republicans in battleground districts who are worried that slashing social programs might open them up to political attacks and cost the party its congressional majority.
Michael Gold covers Congress for The Times, with a focus on immigration policy and congressional oversight.
