News Column

2nd U.S. Rating Agency Threatens U.S. With Downgrade Over Budget

June 3, 2011
Capitol with graph and dollars

For the second time in less than two months, a U.S. credit rating agency Thursday threatened to downgrade the top status of the U.S. government's borrowing ability unless it resolves its budget crisis.

Moody's Investors Services said on its website that if there were "no progress" on lifting the current $14.3 trillion debt limit "in coming weeks," it would review the U.S. government's current AAA rating.

The outcome could be a "possible downgrade, due to the very small but rising risk of a short-lived default," Moody's said.

In April, Standard & Poor's rating agency lowered its long-term outlook for U.S. credit to negative but kept in place Washington's high AAA/A-1+ rating for the time being, pending a resolution of the budget crisis.

The U.S. government has already reached its borrowing limit, but Congress has until Aug. 2 to reach an agreement on the matter. In the interim, the Treasury Department is deploying stop-gap measures.

Source: Copyright 2011 dpa Deutsche Presse-Agentur GmbH