A Chinese credit agency has downgraded the United States's credit rating from A- to BBB+, citing increased reliance on debt, Reuters reported Tuesday.
Dagong Global Credit Rating Co., one of China's largest firms, said in a statement Tuesday that it had also given the U.S. sovereign ratings a negative outlook, specifically citing the GOP's recently-passed tax-reform plan as a reason why.
"The perennial negative impact of the superstructure on the economic base has continued to deteriorate the debt repayment sources of the federal government, and this trend will be further exacerbated by the government's massive tax cuts," the firm said in a statement.
In the statement, Dagong also hits the U.S. for "political deficiencies," as well as the U.S.'s reliance on debt-driven economics, which it says are hindering further economic development.
"The government did not discover from the financial crises that it is the debt-driven mode of economic development that has hindered the country from making ends meet," Dagong said.
“Deficiencies in the current U.S. political ecology make it difficult for the efficient administration of the federal government, so the national economic development derails from the right track,” Dagong added.
This policy, Dagong predicts, will lead to the federal government being forced to raise the debt ceiling with more frequency.
The Treasury Department said in November that "extraordinary measures" would allow the government to run through January, but warned that the government would be forced to raise the debt ceiling again sometime this month.
"Extraordinary measures will allow the government to continue to meet its obligations through January 2018. It is currently too early to provide a more precise forecast as to how long the extraordinary measures will last," said a report from the department in November.