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Aug. 2 (UPI) -- U.S. Treasury Secretary Janet Yellen on Wednesday blasted the "unwarranted" decision by the company Fitch to downgrade the United States' credit rating. Yellen made her remarks at a live-streamed news conference with Danny Werfel, commissioner of the Internal Revenue Service, to tout the achievements of the IRS.
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"Over the past few years, the American economy has seen a historic recovery from the depths of the pandemic downturn. Over 13 million new jobs have been created since January 2021. Our unemployment rate stands at 3.6 % near historic lows. Overall annual inflation has declined every month the past year and our economy continues to grow," Yellen said.
"In the longer term, the United States remains the largest, most dynamic, and most innovative economy with the strongest financial system in the world. Fitch's decision is puzzling in light of the economic strength we see in the United States."
Fitch Ratings is one of the three major credit rating companies recognized by the U.S. Securities and Exchange Commission. Along with Moody's and Standard & Poor's, and among other business products, the company assigns credit ratings to sovereign nations to describe their ability to meet debt obligations.
The company lowered the United States' credit rating Tuesday from its top-ranked AAA to AA+. after issuing a warning in May that the nation's top-tier rating could be downgraded as the political battle over the debt ceiling waged on.
"The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management," Fitch said as the agency pointed to "expected fiscal deterioration over the next three years."
In May, Fitch placed the United States' AAA rating on a "negative watch" as lawmakers argued over how to keep the federal government from running out of money by June 5. President Joe Biden signed the debt ceiling bill on June 2.
"I believe it is entirely unwarranted. Its flawed assessment is based on outdated data and fails to reflect improvements across a range of indicators including those related to governance we've seen over the past two-and-a-half years," Yellen said.
"Despite the gridlock, we've seen both parties come together to pass legislation to resolve the debt limit as well as to make historic investments in our infrastructure and American competitiveness."
Yellen added that fiscal responsibility is a priority for the administration of President Joe Biden who, earlier this year, signed debt limit legislation that included over a trillion dollars in deficit reduction.
"His budget would also improve the fiscal outlet by reducing the federal deficit by $2.6 trillion over the next ten years," Yellen said.
"Today, we are here to speak about an IRS modernization project launched this time last year that will reduce our deficit by hundreds of billions of dollars over the next decade by ensuring the IRS has the resources it needs to enforce against wealthy taxpayers and large corporations that have not paid the taxes they owe.
"At the end of the day, Fitch's decision does not change what all of us already know -- the Treasury securities remain the world's preeminent, safe and liquid asset and that the American economy is fundamentally strong."
