Congressional tantrums may result in real and lasting consequences for Salt Lake County residents.
In 1787 John Adams wrote to Thomas Jefferson that, "All the perplexities, confusion and distress in America rise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation."
Present day fiscal policy in Washington still seems to struggle with these basic concepts.
Standard & Poors recently downgraded the long-term sovereign credit rating of the United States from AAA to AA+, assigned a negative outlook and warned that additional downgrades may be imminent if foundational issues are not satisfactorily addressed by those elected to lead and manage our country.
Standard & Poors further observed that "the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges." They also cite concerns over the nation's rising debt burden and the likelihood it will continue to increase.
How does this affect the average Salt Lake County resident?
Moody's has advised county leaders that they intend to review our bond rating along with other counties. Their action is a direct result of emerging concerns over the potential impact that federal employment and funding may have on the local economy.
These concerns and the resulting review of Salt Lake County's bond rating are a direct consequence of the failure of Congress to lead our nation and establish responsible and well-reasoned fiscal policy. If the county's bond rating is downgraded, residents will be left bearing the burden of increased interest costs, which translates to increased taxes, decreased services, or both.
Salt Lake County has the highest possible bond rating of AAA from all three rating agencies. There are over 3,000 counties in the United States and only 30 have a triple-A rating from all three rating agencies. That's less than 1 percent of all counties in the nation that have achieved this notable benchmark.
The triple-A ratings demonstrate that Salt Lake County is fiscally well managed, diverse in its tax base and economy, conservative in its use of debt and ready to withstand most disruptions in revenue or unexpected expenses.
More importantly, the county's exemplary bond rating saves taxpayers money by reducing interest costs on general obligation bonds issued by the county. If these bonds had been issued with a downgrade from AAA to AA+, the additional interest expense to taxpayers would be approximately $17.6 million over the life of the bonds.
Congress failed to demonstrate this same level of fiscal leadership. This is simply one more example of congressional foolishness. Congress is a direct reflection of "we the people."
Shame on us for continued nonsense from the Congress.
Gregory P. Hawkins is the Salt Lake County auditor.