US rating same despite supercommittee failure: S&P
Standard & Poor's maintained its AA+ credit rating for the United States on Monday despite the failure of a special congressional panel to agree huge deficit cuts due to deep political differences.world Updated: Nov 22, 2011 10:11 IST
Standard & Poor's maintained its AA+ credit rating for the United States on Monday despite the failure of a special congressional panel to agree huge deficit cuts due to deep political differences.
"The Fiscal Committee's inability to agree on fiscal measures that would stabilize US government debt as a share of GDP is consistent with our August 5 decision to lower our rating to AA+," S&P said,
"However, we expect the caps on discretionary spending as laid out in the Budget Control Act of 2011 to remain in force. If these limits are eased, downward pressure on the ratings could build."
S&P delivered Washington its first-ever ratings cut, from the vaunted AAA top level, on August 5 citing both medium-term projections of still-expanding levels of debt and deficit levels, and its expectation that rival Democrat and Republican politicians would not be able to reach any major deal on deficit-cutting measures before the November 2012 presidential election.
The committee announced on Monday that it was deadlocked and would not be able to achieve its mission to cut US deficits by $1.2 trillion over 10 years, amid partisan feuds over tax hikes for the rich and cuts to social spending.
Under the August law that begat the committee, the deadlock results in draconian automatic cuts to domestic programs and the military beginning in January 2013, though lawmakers have plenty of time to repeal those cutbacks.