Standard and poor's rating agency downgraded the U.S. score on Friday, marking the first downgrade of U.S. credit in our nation's history. U.S. rating has fallen one point, from AAA to AA-plus, issued together with a negative outlook to warn investors of a possible downgrade within the next two years. S & P said a further downgrade to AA would occur if less reduction in expenditure incurred than the President and Congress agreed to implement, interest rates are rising, or new fiscal pressures present themselves.
Credit rating agency's decision resulted from Tuesday's deficit reduction plan. S & P feels it has been unable to stabilize the United States's debt circumstances. Treasury Secretary Tim Geithner urged Congress, first and foremost to raise debt ceiling to avert default. The Democrats wanted to have a "clean" bill, free of any financial plan, while Republicans withheld votes in an attempt to bring about a drastic expenditure cut agreement. But when an S & P warning Washington of a possible downgrading in April, former AAA rating was dependent on two conditions. Congress would need a) presents a long-term plan to tackle the deficit, and b) avoid U.S. standard. United States's new rating reflects a failure to complete the former.
S and P said in a statement that his perspective on "the difficulties in bridging the gap between the political parties" in the case of an effective budget reduction plan had changed. Now, the S & P says that it is "pessimistic about the Congress and administration to exploit their contracts this week in a broader fiscal consolidation and plan that stabilize Government debt dynamics anytime soon."
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