It was troubling when credit agency Standard & Poor’s recently said its long-term expectations of the federal government’s financial health had fallen from “stable” to “negative” – mainly because Washington won’t get its spending and debt under control.
But as a secondary result, the Tennessee Valley Authority, a wholly owned “corporation” of the U.S. government, has also seen its S&P outlook drop from stable to negative. A TVA spokesman pointed out that the warning is related to the federal government’s financial problems, not to something TVA itself had done wrong.
But the downgraded outlook could mean higher interest rates for TVA when it issues new debt.
That could lead to higher rates for TVA’s energy customers.
Congress’ unwillingness to stop spending money it doesn’t have is obviously causing serious unintended effects.