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Fitch US Bond Downgrade Risks Bigger Ag, Other Spending Fights

The recent downgrade of U.S. debt by Fitch rating service risks a bigger spending fight over USDA and other spending bills in September.

Fitch was the second bond rating agency after Standard and Poors to strip the U.S. of its triple-A status, citing fiscal deterioration and 20 years of repeated debt ceiling fights and shutdowns.

Ag Senator Chuck Grassley (R-IA) says it’s a message to Congress about this year’s debt reduction deal. He says, “The McCarthy agreement with Biden is not enough, and it’s not going to be changed for the next 12 months, because I think the die is cast. And I think it’s just…I think Fitch is trying to wake Congress up.”

And that has House GOP conservatives ready to take a tougher stand on spending cuts for USDA and possibly authorized spending for SNAP in the farm bill. Grassley says, “They are digging in more, but I think, if you went that route, and the Democrats are going to be against it, you’re never going to get 218 Republicans to be for it.”

Leaving conservatives unable to get a majority to prevail, but also risking further mayhem as the September 30 fiscal year deadline draws near. But Grassley’s targeting his own cuts in the farm bill, starting with the Commodity Credit Corporation.

Grassley says, “Of course, $8 billion through CCC is nothing to be afraid of, but I don’t have a figure from CBO on my ‘payment limits,’ but that usually comes in at several hundred million. Then, I think the rest of it’s going to come from food stamps. And I think that’s going to be a very major battle between Republicans and Democrats on the committee.”

Especially on House Ag, where all Democrats signed a letter to Speaker McCarthy warning there won’t be a farm bill if the GOP insists on more cuts to SNAP.

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