As President Obama 'Digs In Heels' Against A Plan To Reduce The Deficit, A Key Ratings Agency Warns Of Another 'Downgrade' Without One

Downgrade Threat: In The Absence Of Deficit Reduction Plan

FITCH RATINGS: "In the absence of an agreed and credible medium-term deficit reduction plan that would be consistent with sustaining the economic recovery and restoring confidence in the long-run sustainability of U.S. public finances, the current Negative Outlook on the 'AAA' rating is likely to be resolved with a downgrade later this year even if another debt ceiling crisis is averted." ("Fitch: Debt Ceiling Delay Would Prompt Formal U.S. Rating Review," Fitch Ratings, 1/15/13)

• "Fitch threatens downgrade over debt ceiling… Even if the debt ceiling is raised, the agency warned it would 'likely' downgrade U.S. credit unless lawmakers passed a 'credible medium-term deficit reduction plan that would be consistent with sustaining the economic recovery.'" ("Fitch Threatens Downgrade Over Debt Ceiling," Politico, 1/15/13)

• "The United States risks losing its AAA credit rating from Fitch if any deal to raise the legal borrowing limit does not include a plan to put public finances on a more sustainable footing, the ratings agency said Tuesday." ("Weak Debt Deal Would Risk U.S. Rating – Fitch," CNN Money, 1/15/13)

WH Won't Even Negotiate: 'Obama Escalates Debt Fight,' 'Will Not Engage'

PRESIDENT OBAMA: "What I will not do is to have that negotiation… That is not how historically this has been done." (President Obama, Press Conference, 1/15/13)

• "Obama escalates debt fight. … Mr. Obama's tone suggested that battle lines already have hardened ahead of the next budget fight." ("Obama Escalates Debt Fight," The Wall Street Journal, 1/14/13)

• "Obama digs in heels… rejected any negotiations with Republicans…" ("Obama Digs In Heels, Refuses To Negotiate Debt Ceiling," Reuters, 1/15/13)

• "President Barack Obama says he absolutely won't forfeit anything..." ("Debt Debate: No Easy Path To Avoid Chaos," Politico, 1/15/13)

• "President Barack Obama vowed he won't negotiate over raising the government's debt ceiling…" ("Obama Vows No Negotiations On Debt As Deficit Talks Loom," Bloomberg, 1/15/13)

• "President Obama forcefully reiterated Monday that he considers raising the nation's legal borrowing limit to simply be a congressional responsibility and again insisted he will not engage..." ("Will Obama, Congress Negotiate Over Debt Ceiling? It's Not Clear," The Washington Post, 1/14/13)

 HISTORY: 'Congress Has Always Placed Restrictions On Federal Debt'

CONGRESSIONAL RESEARCH SERVICE: "Congress has always placed restrictions on federal debt. Limitations on federal debt have helped Congress assert its constitutional powers of the purse, of taxation, and the initiation of war." ("The Debt Limit: History And Recent Increases," Congressional Research Service, P.7, 1/10/13)

43 U.S. SENATORS: "The 1985 Gramm-Rudman-Hollings Act, which helped reduce the deficit, was attached to a debt limit bill. The three largest deficit reductions bills in the 1990s – in 1990, 1993, and 1997 – were each linked to debt limit legislation, as was the Statutory Pay-As-You-Go Act of 2010. Finally, the debt limit was the impetus for the 2011 Budget Control Act, estimated to save $2.1 trillion over the decade. In short, nearly every significant deficit reduction law of the past 27 years has been linked to a debt limit debate." (Sen. Portman, Letter To President Obama, 12/5/12)