S&P cuts US outlook to negative
Ratings agency Standard & Poor's on Monday revised its outlook on US sovereign debt to "negative" from "stable", citing Washington's looming debt and fiscal deficits.
"Because the US has, relative to its 'AAA' peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us, we have revised our outlook on the long-term rating to negative from stable," S&P said in a statement.
But S&P said the US had until 2013 to come up with a credible plan for addressing its financial problems.
"We believe there is a material risk that US policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013," it said.
"If an agreement is not reached and meaningful implementation is not begun by then, this would in our view render the US fiscal profile meaningfully weaker than that of peer 'AAA' sovereigns."
Ratings agency S&P's decision to downgrade its credit outlook for the United States was a political judgment, White House economic adviser Austan Goolsbee said on Monday.
Speaking on MSNBC and CNBC television, Goolsbee said the White House did not agree with the S&P decision. He said the United States would achieve a long-term agreement on reducing the US budget deficit.
Follow Emirates 24|7 on Google News.