Deficits

Investors have grown more wary of lending to the US government for such a long time, and have demanded higher yields as a result, increasing a cushion known as the term premium.

Moody's announced Friday evening it was downgrading the US to Aa1 from Aaa, reinforcing Wall Street's growing worries over the nation's fiscal outlook as Capitol Hill debates even more unfunded tax cuts.

A rise in U.S. Treasury yields from very low levels in 2020, has resulted in diminished debt affordability, with interest payments-to-revenue hitting about 30% by 2035.

Rubin, who oversaw a shift to budget surpluses as Treasury chief under Democrat Bill Clinton in the 1990s after serving as co-chairman of Goldman Sachs Group Inc., said that while some federal spending can be cut, "as a practical matter" there's insufficient scope for that to rein in deficits.