Moody’s Ratings downgraded the United States’ credit rating Friday as the country’s debt soars and a Republican budget bill is projected to add trillions of dollars to the balance. Moody’s blamed the downgrade on more than a decade of increasing government debt and interest payment ratios, and the failure of U.S. administrations and Congress “to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs.”

The downgrade, from the highest rating to one notch below, comes as the president’s budget bill suffered a blow in Congress. Republican budget hawks joined Democrats earlier Friday to block the package — known as the One Big Beautiful Bill Act.

“While we recognize the U.S.’ significant economic and financial strengths, we believe these no longer fully counterbalance the decline in fiscal metrics,” Moody’s said in a statement explaining the downgrade.

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The country’s credit rating had already been downgraded in previous years by Fitch Ratings and S&P Global Ratings, the other major credit agencies.

All major stock indexes appeared to be trending down in premarket trading.

The White House pointed the finger at Democrats in a statement Friday night.

“The Trump administration and Republicans are focused on fixing Biden’s mess by slashing the waste, fraud, and abuse in government and passing The One, Big, Beautiful Bill to get our house back in order,” spokesman Kush Desai said in an emailed statement. “If Moody’s had any credibility, they would not have stayed silent as the fiscal disaster of the past four years unfolded.”

The U.S. is facing a massive debt balance, which continues to grow as interest builds and the country keeps borrowing. The downgrade from Moody’s comes as it became clear that the Republican tax proposal emerging in the House would add more than $2.5 trillion to the federal deficit over the next decade, according to nonpartisan estimates and budget experts.

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While the legislation is expected to change substantially before final passage, the House Ways and Means Committee’s draft plan calls for roughly $3.8 trillion in tax cuts over the next decade, according to the Joint Committee on Taxation, a nonpartisan congressional body. Other parts of the legislation would cut federal spending and bring in new revenue. Including those plans, the official cost of the bill is likely to amount to more than $2.5 trillion — and as much as $3.3 trillion, counting the interest owed on new debt, according to Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget, a Washington-based think tank.

Moody’s said it expects federal deficits will grow to 9 percent of the country’s gross domestic product by 2035, from 6.4 percent last year. Interest payments coupled with relatively low revenue will add to the debt, along with government spending on programs such as Social Security and Medicare.

The Trump administration has said it’s endeavoring to lower spending by cutting programs and reducing the federal workforce — work done in part by the U.S. DOGE Service overseen by billionaire Elon Musk. But the federal debt continues to rise.

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Senate Democratic Leader Charles E. Schumer (New York) said in a statement Friday that the downgraded credit rating “should be a wake-up call to Trump and Congressional Republicans to end their reckless pursuit of their deficit-busting tax giveaway.”

Moody’s ratings can be read as political as well as financial indicators. After newly elected British Prime Minister Liz Truss spooked markets and the public in 2022 with an aggressive economic plan to increase borrowing while cutting taxes, the agency cut her country’s economic outlook from “stable” to “negative.” Truss resigned days later, making her six-week term the shortest in British history.

The Committee for a Responsible Federal Budget drew a comparison to Truss earlier in the day Friday, publishing a piece about the budget bill titled “America’s Truss Moment?”

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The downgraded rating could theoretically contribute to higher borrowing costs if it undermines confidence in the United States’ ability or willingness to repay its debts. But the dollar is still seen as the world’s reserve currency, and investors generally flee to treasuries in times of crisis.

And it wasn’t all bad news from Moody’s: The business gave the government’s creditworthiness a “stable” outlook and said the U.S. “retains exceptional credit strengths such as the size, resilience and dynamism of its economy and the continued role of the U.S. dollar as global reserve currency.”