Treasurer Loftis' statement on Moody's Credit Agency Warning
Tuesday, July 19, 2011
(Columbia, SC) – State Treasurer Curtis Loftis today issued the following statement regarding Moody’s Investors Service putting five states on review for possible credit downgrade, which includes South Carolina. This action is a consequence of Moody’s threat to downgrade the federal government’s credit rating. In other words, what happens in Washington could have an effect on South Carolina.
“I urge the Congress to conclude its current debate involving the debt ceiling and federal budget,” Treasurer Loftis said. “A permanent solution must be found to balance the budget and eliminate Washington’s habitually spending beyond its means.”
The statement issued by Moody’s points to several factors which would make South Carolina vulnerable to a possible credit downgrade, including South Carolina’s above average reliance on federal Medicaid payments due to its high poverty levels, coupled with insufficient state funds to cover them if they were reduced.
Maintaining South Carolina’s AAA credit rating means it costs less to borrow for things taxpayers depend on like good schools, quality roads and bridges.