Gov. Bill Haslam called the U.S. debt negotiations “an incredibly serious game of chicken” Monday and urged Washington to reach an agreement “for the economic health of the country.”
“We have a country that’s literally waiting to see what will happen,” Haslam told reporters. “Until Washington shows that we can live within our means and come to a political agreement about how to solve that, you’re not going to see banks willing to loan money, you’re not going to see people willing to invest their own capital, and so we won’t have any job growth until that happens.”
Moody’s Investors Services told Tennessee and four other states last week that they face downgrades in their AAA credit ratings because of their heavy dependence on federal revenue.
“Should the U.S. government’s rating be downgraded to Aa1 or lower, these five states’ ratings would likely be downgraded as well,” the bond-rating agency said.
Haslam said: “It’s an incredibly serious game of chicken that we’re playing in Washington, quite frankly. If you talk to any governor, they would say, we really need you to solve this for the economic health of the country, No. 1. No. 2, for us as states — I mean, you’ve seen where some of the credit ratings agencies have said, the fact that they don’t have a deal puts Tennessee’s credit rating in peril. That speaks volumes.”
But Haslam repeated his belief that state government could weather higher borrowing costs.
“We have the second- or third-lowest debt load of any state out there, and that’s really helpful in times like this,” he said.