Influence Explored: Credit ratings agencies score the U.S. government, and lobby it, too


The ongoing negotiations in Congress over raising the U.S. debt ceiling have prompted Moody’s Corp, a bond rating agency, to bring the rating of U.S. Treasury bonds up for review, according to an article from Bloomberg News.

U.S. Treasury bonds are currently rated “AAA”, the highest possible rating, and are considered some of the safest investments available. If congress fails to raise the debt ceiling, the U.S. government would run the risk of defaulting on its debt for the first time in history, and bond rating agencies would likely lower the bond rating, making them less attractive investments and reducing the government’s ability to borrow money.

Representative Peter Welch said in an interview with Bloomberg that Moody’s is “sending a signal” to lawmakers with its warning on the bond rating. Moody’s, along with the other companies mentioned in the article, have other methods of “sending signals” to congress as well. Below is a look at the influence profiles of the entities mentioned in the piece:

According to the Bloomberg article, Moody’s would downgrade U.S. bonds to AA, the rating just below AAA. Other ratings agencies are prepared to take more drastic measures, such as Standard & Poors, who warned the government on June 30th that it would drop its rating from AAA to D, the lowest possible rating.

Credit ratings agencies became the subject of regulation following the financial crisis in 2008, because credit ratings agencies like Moody’s and Standard & Poor’s rated financial instruments based on bad home loans as AAA, and many of them turned out to be much riskier than the rating implied.

‘Influence Explored’ takes an article from the day’s headlines and exposes the influential ways of entities mentioned in the article. Names and corporations are run through Sunlight’s influence tracking tools such as Influence Explorer and Transparency Data to remind readers of the money that powers Washington.