On his radio show today, Rush Limbaugh expounded a theory that Moody's Investors Service is beholden to “Democrat Party” interests due to the Dodd-Frank financial regulatory bill, suggesting that its warning of a downgrade in the U.S. credit rating if the debt ceiling is not raised by August 2 is a result of Moody's knowing “which side of the bread their butter is on.” Limbaugh offered no specific evidence to back up his theory:

LIMBAUGH: By the way, lest we forget on this Moody's business. Congress tightened its regulation of credit ratings companies last year with the so-called Dodd-Frank Wall Street Reform Consumer Protection Act. Yes, that Wall Street -- that financial regulatory reform bill included in it regulation of credit rating companies like Moody's. So these companies, like Moody's, know which side of the bread their butter is on. They realize that they now have to toe the line and advance the interests of the Democrat Party. Bill Hemmer today on Fox asked Stuart Varney, look, Stuart, are these guys totally objective? Stuart Varney said, they say they are. They say they are and we have to take them at their word.

It was clear to me that to Stuart Varney, Moody's is the gold standard, they're God. They're the absolute truth, they don't lie, they don't make it up. But all I know is that they are now regulated under the Financial Regulatory Reform Act, and that tells me they know what they have to do to stay safe, and that's advance the interest of the Democrat Party. But still, let's think about it: Obama is elected president, a mere two and half years later Moody's is talking about possibility of the United States defaulting on our debt. Aside from the fact that it's really a coincidence, does anybody really -- I mean, how in the world does anybody even talk about this guy seriously getting re-elected? [Premiere Radio Networks, The Rush Limbaugh Show, 7/14/11]

But Moody's -- which has stated that it would review the country's credit rating for a downgrade if progress on increasing the debt limit hadn't been made by mid-July and has now begun this process -- is not alone in warning about such a downgrade. Fellow rating service Standard & Poor's reportedly laid out a scenario to Democratic leaders in which the U.S. credit rating could be downgraded if it paid interest on its debt but failed to meet other obligations.

Limbaugh has long pushed the fallacious idea that there would be no adverse consequences to not raising the debt ceiling because the government takes in enough money to make interest payments on the debt.