Malloy minimizes effect of U.S. credit downgrade on Connecticut

The market tanked today, a drop that many analysts attributed to the downgrade of the U.S. credit rating. But Gov. Dannel P. Malloy took a more bullish view with a statement issued this afternoon:

“While Standard & Poor’s downgrade of our country’s debt is clearly not good news, we in Connecticut have a few things working in our favor. There is not much of a direct, immediate impact on our state since our rating has been recently affirmed by S&P and we do not have federally backed debt that will be downgraded based directly on the S&P action. We have balanced our budget without cutting pension contributions or borrowing, which are strong credit positives, and while Washington refuses to work together and address our long-term problems, the agreement I reached with state employee union leaders does – in terms of the sustainability of both health care and pension obligations on behalf of state employees.

“We are concerned, however, about the longer term impacts of large-scale cuts to discretionary spending, including transportation, defense, health, and environment, and to entitlement programs, which could mean more difficult decisions in Hartford in the coming years. My administration will deal with those decisions directly and honestly, just as we have dealt with the fiscal crisis we inherited on January 5.”